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Urban Outfitters Inc (NASDAQ:URBN) climbed more than 8% following the report.
The retailer reported earnings of 56 cents on revenue of $1.11 billion, compared with estimates for 36 cents on revenue of $1.09 billion.
The beat on the bottom line was helped by a 260 basis points improvement in gross profit rate, driven by higher markups and a decrease in inventory levels.
“We increase in gross profit rate was primarily due to higher initial merchandise markups at all three brands primarily driven by lower inbound transportation costs. Additionally, the gross profit rate benefited from lower merchandise markdowns at the Anthropologie Group and Free People Group brands,” the company said.
Inventory decreased by $39.6M, or 6.3%, on a year-over-year basis.
