Urban Outfitters, Inc. (NASDAQ:URBN) shares are trading higher Wednesday after the company reported third quarter earnings above analyst estimates.

What To Know: Urban Outfitters reported earnings per share of $1.28, beating the consensus estimate of $1.18. In addition, the company reported sales of $1.52 billion, beating the consensus estimate of $1.47 billion.

The company posted record quarterly net income of $116.4 million as total sales rose 12.3% year over year. Retail segment net sales increased 9.6%, driven by an 8% rise in comparable sales fueled by high single-digit gains in both digital and store channels. Comparable sales grew 12.5% at Urban Outfitters, 7.6% at Anthropologie and 4.1% at Free People.

Subscription segment net sales climbed 48.7% on a 42.2% increase in average active subscribers. Wholesale segment net sales rose 7.6%, supported by an 8.4% increase in Free People wholesale sales.

Gross profit dollars increased 13.3% to $563.3 million, and gross profit rate improved by 31 basis points, driven by lower markdowns and leverage in store occupancy costs. Inventory rose 5.9% year over year, in line with higher sales.

Selling, general and administrative expenses increased 13.7% from last year, reflecting higher marketing and store payroll costs. The company repurchased 3.3 million shares during the first nine months of the fiscal year.

Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.

• Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating on Urban Outfitters and raised its price target from $80 to $85.
• Morgan Stanley analyst Alex Straton maintained an Overweight rating on Urban Outfitters and raised its price target from $85 to $91.
• UBS analyst Jay Sole maintained a Neutral rating on Urban Outfitters and raised its price target from $70 to $80.
• Wells Fargo analyst Ike Boruchow maintained an Equal-Weight rating on Urban Outfitters and raised its price target from $75 to $80.
• Barclays analyst Adrienne Yih maintained an Overweight rating on Urban Outfitters and raised its price target from $89 to $98.

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URBN Price Action: At the time of writing, Urban Outfitters stock is trading 13.45% higher at $77.50, according to data from Benzinga Pro.

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