Urban Outfitters (URBN) shares took a sharp 7.06% dive in after-hours trading on Wednesday, despite the company reporting record second-quarter sales and earnings that surpassed analyst expectations. This unexpected downturn highlights potential investor concerns about the retailer's future outlook, even as it posts strong current results.

The company announced Q2 earnings per share of $1.58, with sales reaching $1,504.755 million, comfortably beating the IBES estimate of $1,472 million. Urban Outfitters reported a significant 11% increase in total net sales, driven by an 8% rise in Retail segment sales, a 53% surge in Subscription segment sales, and an 18% increase in Wholesale segment sales. The Retail segment also saw a notable 6% increase in comparable sales.

Despite these impressive figures, including a record net income of $144 million for the quarter, the market's negative reaction suggests that investors may be looking beyond the current results. Factors such as concerns about maintaining this growth trajectory, potential headwinds in the retail sector, or guidance that fell short of heightened market expectations could be contributing to the stock's after-hours plunge. As the market digests this information, it will be crucial to watch for any additional insights or forward-looking statements from Urban Outfitters' management to understand the full context of this paradoxical stock movement.