Apparel retailer Urban Outfitters reported a surprise rise in quarterly comparable sales, driven by higher demand for its namesake brand. The Philadelphia-based retailer reported on Tuesday that comparable sales for its Urban Outfitters line, the company's second-biggest brand by sales, rose 5 percent, beating the 1.10 percent growth analysts had expected.
According to Reuters, Urban Outfitters is attempting to draw back shoppers - who have shifted to online shopping and lower priced fast fashion brands, such as H&M, Inditex's Zara and Forever 21 - by adding bars, restaurants (the Vetri Family restaurants, which the retailer bought this year, added $3.6 million to revenue) and hair salons to its stores. In three of its locations – Brooklyn, Los Angeles, and Austin – the company’s stores feature several bars. In its Brooklyn store, there are two bars, one on the roof and another on the floor of its men’s department. The same location also lays home to an Israeli restaurant.
"A focus on growth categories like the sporting and athleisure aesthetic, which UO has tapped into with its own active line and with brands like Adidas, have also afforded it some traction with consumers," Carter Harrison, analyst at research firm Conlumino, told Reuters. The brand has welcomed exclusive partnerships with adidas, for instance. And as Glossy reported last week, amidst a revived obsession of ’90s fashion, Tommy Jeans returned on Monday with revivals of its past-era Dungaree overalls, short-sleeved cropped sweatshirts, oversized jean jackets and the red, white and blue bandeau, all featuring the iconic brand logo - all of which are being sold exclusively through Urban Outfitters. This collection is the first release of an ongoing partnership with Urban Outfitters that will also include a men’s collection and a spring collection due next year.
Urban Outfitters has also reportedly struck gold with its array of anti-Donald Trump merchandise. According to Forbes, the brand is plastering messages like ‘IDK Not Trump Tho' and ‘Vote Trump 20NEVER’ on t-shirts and coffee mugs, which the company created after a licensing deal with comedian Dave Ross, who came up with the slogan. "While being politically incorrect may not be in the best interest of retailers, it is working quite well for Urban Outfitters. The first run of 300 shirts were sold out in under 24 hours, prompting the store to order thousands more," per Forbes.
The company's gross profit rate increased in the quarter, primarily driven by fewer promotions at the Urban Outfitters and Anthropologie brands. The company's net income rose to $76.9 million, or 66 cents per share, from $66.8 million, or 52 cents per share, a year earlier, and net sales rose 2.7 percent to $890.6 million.