Multi-brand marketer Urban Outfitters saw its net sales rise from $454.3 million during second-quarter 2008 to $458.6 million during second quarter 2009.
The increase was spurred by its direct operations, which rose from $60.5 million a year ago to $70.9 million during the quarter ended July 31. Retail sales fell from $365.8 million to $361.8 million.
The changes in sales channels meant that the direct operations, which made up 14.2% of sales a year ago, pulled in 16.4% of sales during the quarter just ended. All three of the company’s brands – Anthropologie, Free People and Urban Outfitters – showed increases in their direct sales, CEO Glen T. Senk said during an earnings conference call.
The increase in direct sales’ contribution, however, couldn’t stave off a drop in net income. During the most recent quarter, Urban Outfitters recorded $49 million in net income, compared with $57 million a year ago. The company’s cost of sales ticked up as well, amounting to 59.2% of net sales, compared with 58.9% of net sales a year ago.
The Historian’s Take: The jump in direct sales, despite a cutback in circulation, is worth noting. Neither the earnings call nor the company’s second quarter results release went into detail about its catalog circulation, other than when. Senk said it had been cut by 2%. A year ago, during second-quarter 2008, the company circulated 7.8 million catalogs – 4.5 million from Anthropologie, 2.4 million from the flagship Urban Outfitters brand, and 900,000 from Free People. At the time, the parent company indicated its desire to cut back circulation among the Anthropologie and Urban Outfitter brands during 2009, while boosting circulation for the Free People brand. Senk noted visits to the company’s Web sites amounted to more than 19 million, or 3.5 million more than during second-quarter 2008.
