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A Happy Spring: Apparel Stars as Stores’ Profits Soar in Qtr.

Fashion retailing was alive and well in the first quarter, with the likes of Wal-Mart, Target and Kohl’s posting solid earnings on robust apparel sales.

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Dillard’s Inc. said its first-quarter net income rose to $53.8 million, or 64 cents, from $24.3 million, or 29 cents, in the prior year as sales increased to $1.85 billion from $1.81 billion.

Top performers included shoes, innerwear and accessories, while men’s wear was “slightly above trend,” the retailer said in a statement. Women’s wear and juniors’ were in line with expectations.

In the specialty channel, the first quarter bloomed, and offered encouragement for a teen apparel rebound--already foreshadowed by strong results at Abercrombie & Fitch and PacSun.

As expected, Urban Outfitters Inc. thrashed expectations, with sales across all four business segments posting high double-digit gains for the quarter. For the three months ended April 30, earnings sailed 163.9 percent to $16.9 million, or 41 cents a diluted share, on a sales gain of 59.1 percent to $170.3 million. Comparatively, the company reported earnings of $6.4 million, or 16 cents, on sales of $107 million a year ago.

“Apparel sales continued to generate the strongest gains,” said Richard Hayne, chairman and president, during the company conference call. Home goods and accessories performed well, he said.

Warrendale, Pa.-based American Eagle wasn’t left out of the specialty party, recording a 292.1 percent earnings increase to $25.1 million, or 34 cents a diluted share, compared with earnings of $6.4 million, or 9 cents a share, in the year-ago quarter. Sales improved 19.9 percent to $350 million from $291.9 million.

“I believe this quarter marks a turning point for our company,” said James O’Donnell, ceo, during the company’s conference call. “We’ve managed inventories appropriately and curtailed excessive promotions, which depress our profit margins and also were not meaningful to our core customers.” American Eagle added that its markdown rate was its lowest in five years.

— With contributions from Vicki Young, Dan Burrows and Ross Tucker
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