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Urban Outfitters Q4 Earnings up 120%
PHILADELPHIA--(BUSINESS WIRE)--March 11, 2004--Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle consumer products company operating under the Anthropologie, Urban Outfitters and Free People brands, today announced record earnings of $18.4 million for the fourth quarter ended January 31, 2004, a 120% increase over the comparable quarter last year. Fourth quarter diluted earnings per share rose to $0.45 this year versus $0.21 in the prior year.
As previously stated, net sales for the fourth quarter increased by 50% to a record $176.1 million. Fueling this increase over the prior year was:
- A 23% increase in the number of stores in operation
- A 21% increase in total Company comparable store sales
- A 110% increase in direct-to-consumer sales
- A 29% increase in wholesale sales
Comparable store sales at Urban Outfitters and Anthropologie were up 21% and 22%, respectively, versus 5% and (3)% for the same quarter last year. New and non-comparable store sales increases for the quarter totaled $26.3 million.
"I am pleased that all of our Brands performed exceptionally well this past year," said Richard A. Hayne, Chairman and President. "We produced strong double-digit 'comp' store sales gains across all regions while significantly improving margins and leveraging SG&A expenses. In addition, we opened twenty-one new stores and produced explosive growth in our direct-to-consumer business. All of these factors contributed to record profits including a year over year operating margin increase of 398 basis points."
"The extremely positive comparable store sales trend established during the fourth quarter has continued into the new year. As such, we are now very optimistic about our spring business and expect all three of our Brands to significantly exceed their first quarter sales plan."
Net sales for the periods were as follows:
Three months ended Twelve months ended
January 31, January 31,
2004 2003 2004 2003
--------- ---------- ----------- ----------
(in thousands) (in thousands)
Urban Outfitters store
sales $83,492 $59,400 $267,641 $213,990
Anthropologie store sales 69,451 46,160 211,144 158,737
Direct-to-consumer sales 19,723 9,373 51,144 31,747
Free People sales 3,457 2,640 18,432 18,280
--------- ---------- ----------- ----------
Total net sales $176,123 $117,573 $548,361 $422,754
========= ========== =========== ==========
For the quarter and twelve months, gross profit margins increased by 433 and 326 basis points, respectively, versus the comparable prior year periods. These gains were primarily due to higher initial merchandise margins, decreased markdowns and the leveraging of occupancy expenses.
As of January 31, 2004, total Company inventories grew by $14.4 million on a year-over-year basis. The acquisition of inventory to stock new retail stores was the primary factor in this increase. On a comparable store basis, inventories grew by 0.3% versus the prior year. The inventory aging was also more current than the prior year.
For the quarter and twelve months, selling, general and administrative expenses, expressed as a percentage of sales, decreased by 175 and 72 basis points, respectively, versus the same periods of the prior year. These improvements were primarily a result of the leveraging of store-related expenses.
During the year ended January 31, 2004, the Company opened 13 new Anthropologie stores and 8 new Urban Outfitters stores, or 21 new stores in total. The Company plans to open 24 to 27 new stores, including 1 to 2 new Free People stores, during the current fiscal year.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 61 Urban Retail stores in the United States, Canada, and Europe; an Urban catalog and web site (www.urbn.com); 52 Anthropologie stores in the United States; an Anthropologie catalog and web site (www.anthropologie.com); and Free People, the Company's wholesale division, which sells its product to approximately 1,100 specialty stores, department stores and catalogs, as well as through one Free People store.
A conference call will be held today to discuss fourth quarter and annual results and will be web cast at 11:00 a.m. EST on: www.corporate-ir.net/ireye/ir_site.zhtml?ticker=URBN&script=1010&item_ id=849553 (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.)
This news release is being made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Certain matters contained in this release may constitute forward-looking statements. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, overall economic and market conditions and the resultant impact on consumer spending patterns, including any effects of terrorist acts or war, availability of suitable retail space for expansion, timing of store openings, seasonal fluctuations in gross sales, the departure of one or more key senior managers, import risks, including potential disruptions and changes in duties, tariffs and quotas and other risks identified in filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.
(Tables follow)
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
January 31, January 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $176,123 $117,573 $548,361 $422,754
Cost of sales,
including certain
buying, distribution
and occupancy costs 103,042 73,883 334,888 271,963
----------- ----------- ----------- -----------
Gross profit 73,081 43,690 213,473 150,791
Selling, general and
administrative
expenses 42,014 30,099 132,767 105,392
----------- ----------- ----------- -----------
Income from
operations 31,067 13,591 80,706 45,399
Other income
(expense), net (94) 489 598 674
----------- ----------- ----------- -----------
Income before
income taxes 30,973 14,080 81,304 46,073
Income tax expense 12,544 5,703 32,928 18,660
----------- ----------- ----------- -----------
Net income $18,429 $8,377 $48,376 $27,413
=========== =========== =========== ===========
Net income per common
share:
Basic $0.46 $0.22 $1.23 $0.73
=========== =========== =========== ===========
Diluted $0.45 $0.21 $1.20 $0.71
=========== =========== =========== ===========
Weighted average
common shares
outstanding:
Basic 39,692,018 38,702,852 39,267,463 37,776,456
=========== =========== =========== ===========
Diluted 41,157,671 39,491,306 40,415,569 38,776,904
=========== =========== =========== ===========
PERCENT OF NET SALES
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales,
including certain
buying, distribution
and occupancy costs 58.5 62.8 61.1 64.3
----------- ----------- ----------- -----------
Gross profit 41.5 37.2 38.9 35.7
Selling, general and
administrative
expenses 23.9 25.6 24.2 25.0
----------- ----------- ----------- -----------
Income from
operations 17.6 11.6 14.7 10.7
Other income
(expense), net - 0.4 0.1 0.2
----------- ----------- ----------- -----------
Income before
income taxes 17.6 12.0 14.8 10.9
Income tax expense 7.1 4.9 6.0 4.4
----------- ----------- ----------- -----------
Net income 10.5% 7.1% 8.8% 6.5%
=========== =========== =========== ===========
URBAN OUTFITTERS, INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
January 31,
-------------------
2004 2003
--------- ---------
Assets
Current assets:
Cash and cash equivalents $67,194 $72,127
Marketable securities 11,082 7,379
Accounts receivable, net of allowance for
doubtful accounts of $651 and $563,
respectively 6,711 3,262
Inventories 63,247 48,825
Prepaid expenses and other current assets 13,872 8,633
Deferred taxes 4,832 4,358
--------- ---------
Total current assets 166,938 144,584
Property and equipment, net 121,919 108,847
Marketable securities 61,212 15,640
Deferred taxes and other assets 9,526 8,925
--------- ---------
$359,595 $277,996
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $27,353 $19,186
Accrued compensation 7,756 5,197
Accrued expenses and other current liabilities 22,653 18,689
--------- ---------
Total current liabilities 57,762 43,072
Deferred rent and other liabilities 11,703 10,539
--------- ---------
Total liabilities 69,465 53,611
--------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred shares; $.0001 par value, 10,000,000
shares authorized, none issued - -
Common shares; $.0001 par value, 100,000,000
shares authorized, 39,888,271 and 38,763,272
issued and outstanding, respectively 4 4
Additional paid-in capital 83,283 67,160
Retained earnings 204,905 156,529
Accumulated other comprehensive income 1,938 692
--------- ---------
Total shareholders' equity 290,130 224,385
--------- ---------
$359,595 $277,996
========= =========
URBAN OUTFITTERS, INC.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Fiscal Year
Ended January 31,
------------------
2004 2003
--------- --------
Cash flows from operating activities:
Net income $48,376 $27,413
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 22,415 18,208
Provision for deferred income taxes (1,132) (3,079)
Tax benefit of stock option exercises 7,581 2,248
Changes in assets and liabilities:
(Increase) decrease in receivables (3,437) 887
Increase in inventories (14,306) (7,554)
Increase in prepaid expenses and other
assets (5,148) (2,718)
Increase in payables, accrued expenses and
other liabilities 15,428 6,386
--------- ---------
Net cash provided by operating activities 69,777 41,791
--------- ---------
Cash flows from investing activities:
Capital expenditures (33,079) (22,247)
Purchases of marketable securities (87,322) (43,585)
Sales and maturities of marketable securities 36,751 20,230
--------- ---------
Net cash used in investing activities (83,650) (45,602)
--------- ---------
Cash flows from financing activities:
Exercise of stock options 8,542 5,496
Issuance of common shares, net of issuance
costs - 41,546
--------- ---------
Net cash provided by financing activities 8,542 47,042
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents 398 645
--------- ---------
(Decrease) increase in cash and cash equivalents (4,933) 43,876
Cash and cash equivalents at beginning of period 72,127 28,251
--------- ---------
Cash and cash equivalents at end of period $67,194 $72,127
--------- ---------
CONTACT: Urban Outfitters, Inc.
John E. Kyees, 215-564-2313
SOURCE: Urban Outfitters, Inc.
