The young fashion retailer’s key markets in the US, Canada and Europe drove a hard bargain for the chain, as like-for-like (LFL) sales fell in its second quarter.

In trading statement published on Monday, the company, which also owns the Anthropologie and Free People brands, detailed total sales increased by ten per cent to USD 609 million in the three months to 31 July, although gross profit margin percentage declined 21 per cent year-on-year.

A tough business climate across Urban’s domestic US along with Canada and Europe compounded struggling sales, while investment in technology, e-commerce and distribution facilities were also a contributing factor to the chain’s fall in profit margins.

Comparable store net sales slipped two per cent as Urban increasingly used promotions to clear slow-moving women’s clothing across its Anthropologie and Urban Outfitter stores. Net income for the quarter totalled USD 57 million, falling around 15 million for the same period last year.

Despite the difficult set of results, group chief executive Glen Senk said he was positive about the second half of the financial year:

“We anticipate gradual improvements in our comparable sales over the balance of the fiscal year and into spring 2012”, adding that,“we remain confident in our strategies and believe we made great executional progress during the quarter.”

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