Urban Outfitters
Apparel retailer Urban Outfitters has been battling a sales slump since last year by overhauling both its flagship brand’s line of merchandise and its stores. Above, people walk by an Urban Outfitters outlet in Pasadena, California, March 6, 2015. Reuters/Mario Anzuoni

Urban Outfitters Inc.’s share price rose more than 7 percent in postmarket trading Wednesday after the Philadelphia-based casual apparel retailer surprised Wall Street on sales in the financial report for its fiscal first quarter. Its equity had fallen over 3 percent in regular trading on concern the company’s results would be hit by weak demand for clothing.

Instead, it appears the efforts the firm began last year to turn around sluggish store traffic have started to pay off, at least a little.

Although Urban Outfitters reported earnings per share of 25 cents in line with analysts’ expectations while beating their sales forecasts with $763 million, versus $739 million in the same quarter last year, its net income continued to decline. The company reported its third consecutive drop in Q1 profit, with $29.6 million this year, $32.8 million last year and $37.5 million two years ago.

However, Urban Outfitters posted 1 percent growth in same-stores sales, an important retail measure that excludes recently opened stores to make comparisons with past performances more accurate. Analysts polled by Bloomberg had expected a 0.5 percent drop in this metric.

“These results were driven by more compelling product assortments, improved inventory management and stronger marketing,” CEO Richard A. Hayne said in a statement announcing the results.

The company reported revenue growth in all three of its main brand categories: Urban Outfitters, Anthropologie Group and Free People.

Urban Outfitters’ stock is up more than 8 percent this year, but it’s down almost 38 percent the past 12 months. Wednesday, it closed the postmarket trading session at $26.35 and the regular trading session at $24.59.

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