Investing.com -- Shares in Urban Outfitters Inc (NASDAQ:URBN) fluctuated wildly in after-hours trading amid uncertainty with the retailer's gross profit margin, even as the company posted record second quarter sales over a three-month period that ended in late-July.
During the Philadelphia-based lifestyle specialty retail company's second quarter, Urban Outfitters reported net sales of $867 million or 0.53 per share, as its wholesale net sales surged 21%. On a year-over-year basis, the company's net sales increased by 7% in comparison with the same quarter in 2014. Analysts expected Urban Outfitters to earn revenues of $882 million or 0.49 per share. The company also reported net profits of $66.8 million for the quarter, down slightly from the second quarter of last year when it posted earnings of $67.5 million.
Urban Outfitters shares initially surged by more than 6% in after-hours trading following the record quarterly earnings. However, the shares crashed soon after when company executives appeared unclear about its quarterly profit margin in a conference call with reporters. The shares in the retailer then quickly declined by more than 4% amid heavy volume, before paring some of the losses.
In the first quarter, Urban Outfitters' profit margin dipped to 33.4% its lowest level since January, 2012. The margin also continued its steep decline from the second quarter of 2013, when it peaked at 39.32% in July, 2013. Urban Outfitters provided little detail on its second quarter margin during the call, beyond telling reporters that it shrunk by a lower amount than expected from analysts' forecasts.
The company's comparable retail segment net sales increased 14% at Free People division, 4% at its namesake Urban Outfitters stores and 2% at the Anthropologie Group.
"We are pleased to announce record sales for the second quarter driven by positive retail segment comp growth at each brand," Urban Outfitters CEO Richard Hayne said in a statement. "Without question, the brands' strong execution of our long-term strategy helped fuel that sales growth and laid the groundwork for future increases, as well."
Shares in Urban Outfitters were down 0.65 or 2.02% to 32.23 in after-hours trading.