Urban Outfitters, Inc. (NASDAQ:URBN) stock rose 5.68% (As on November 22, 12:56:47 AM UTC-4, Source: Google Finance) after the company missed Wall Street’s expectations for earnings but beat the outlook on revenue in the third quarter. As of Oct. 31, total inventory was up $116.5 million, or 18.6%, on a year-over-year basis. Retail segment inventory increased by 17% driven by higher costs, earlier than planned receipts due to improved supply chain speed, and excess slower selling product in certain categories. Net income in the quarter was $37.2 million for the three months ended October 31, 2022.

URBN in the third quarter of FY 22 has reported the adjusted earnings per share of 40 cents, missing the analysts’ estimates for the adjusted earnings per share of 42 cents. The company had reported the adjusted revenue growth of 3.9 percent to $1.18 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $1.16 billion. Total Retail segment net sales increased 2 percent, with comparable Retail segment net sales increasing 4 percent, partially offset by a 2 percent negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by mid-single-digit positive digital channel sales and low single-digit positive retail store sales.

By brand, comparable retail segment net sales increased 13 percent at the Anthropologie Group, 8 percent at the Free People Group and decreased 9 percent at Urban Outfitters. Wholesale segment net sales decreased 3 percent, driven by a 4 percent decrease in Free People Group wholesale sales, partially offset by a 6 percent increase in Urban Outfitters wholesale sales. Nuuly segment net sales increased by $22.6 million driven by a 185 percent increase in our subscribers during the quarter versus the prior year’s comparable quarter.

For the quarter ended October 31, 2022, the gross profit rate decreased by 416 basis points compared to the prior year’s comparable period. Gross profit dollars decreased 8.6 percent to $357.0 million. The decrease in gross profit rate and dollars was primarily due to higher markdowns at all three brands as compared to record low markdown rates in the comparable prior year quarter, with the Urban Outfitters brand having the largest variance.

Additionally, the company has  authorized the repurchase of 20 million common shares under a new share repurchase program. As of October 31, 2022, 19.2 million common shares were remaining under the program.