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Urban Outfitters Reports Q1 Results
PHILADELPHIA, May 16, 2011 (GlobeNewswire via COMTEX) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands, today announced net income of $39 million or earnings per diluted share of $0.23 for the three months ended April 30, 2011.
Total Company net sales rose by 9% over the same quarter last year to $524 million. Comparable retail segment net sales, which include our direct-to-consumer channels, decreased 1% for the quarter while comparable store net sales decreased 5% for the quarter. Comparable retail segment net sales at Free People and Urban Outfitters increased 30%, and 1%, respectively, while comparable retail segment net sales at Anthropologie decreased 6% for the quarter. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 22% for the quarter.
"I am confident that we are on the right course to bring our business back to its high standards," said Chief Executive Officer, Glen T. Senk. "I am encouraged by the progress each of the brands have made and anticipate improvements to occur gradually during the balance of this fiscal year," finished Senk.
Net sales by brand and channel for the three month periods were as follows:
Three Months Ended
April 30,
(in thousands)
--------------------
2011 2010
---------- --------
Net sales by brand $235,328 $210,503
Urban Outfitters
Anthropologie 228,548 224,677
Free People 51,751 40,569
Other 8,392 4,212
---------- --------
Total Company $524,019 $479,961
========== ========
Net sales by
channel
Retail Stores $391,164 $368,541
Direct-to-consumer 102,298 86,267
---------- --------
Retail Segment 493,462 454,808
---------- --------
Wholesale Segment 30,557 25,153
---------- --------
Total Company $524,019 $479,961
========== ========
For the first quarter ended April 30, 2011, gross profit margin percentage declined by 493 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving inventory primarily associated with women's apparel at both Anthropologie and Urban Outfitters and a non-recurring loss associated with the sell-off of Leifsdottir wholesale inventories during the current quarter.
As of April 30, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 6% at cost while total comparable store inventory increased by 1% at cost. Total inventories grew by $42 million or 19%, on a year-over-year basis, primarily due to the acquisition of inventory to stock new retail stores, as well as, inventory to support growth in the direct-to-consumer channel.
For the first quarter ended April 30, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 96 basis points. This increase was primarily due to the deleveraging of store operating costs as a result of the negative comparable store net sales for the three months ended April 30, 2011. Additionally contributing to the deleverage in the quarter were investments in new technology, non-recurring transition costs associated with Leifsdottir and planned transition costs for our new distribution and fulfillment facilities in Europe.
On November 16, 2010, our Board of Directors approved a share repurchase program that authorized the repurchase of 10 million common shares subject to prevailing market conditions. During the quarter ended April 30, 2011, the Company repurchased and retired 4.8 million common shares for approximately $149 million. These repurchases completed the Company's 2006 share repurchase program leaving 5.7 million shares available for repurchase under the 2010 share repurchase program.
During the three months ended April 30, 2011, the Company opened a total of 10 new stores including: 5 Free People stores, 2 Urban Outfitters stores and 3 Anthropologie stores.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 178 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 156 Anthropologie stores in the United States, Canada and Europe, catalogs and websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 47 Free People stores, catalogs and website, 1 Terrain garden center and website and a BHLDN website as of April 30, 2011.
Management's first quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss first quarter results and will be web cast at 5:00 pm. EDT at: http://investor.urbn.com/phoenix.zhtml?c=115825&p=irol-irhome
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. When used in this release, the words "project," "believe," "plan," "anticipate," "expect" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 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, lowered levels of consumer confidence and higher levels of unemployment, and continuation of lowered levels of consumer spending resulting from the continuing worldwide economic downturn, 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, the closing of any of our distribution centers, our ability to protect our intellectual property rights, risks associated with internet sales, response to new store concepts, potential difficulty liquidating certain marketable security investments and other risks identified in the Company's 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
------------------------
April 30,
------------------------
2011 2010
----------- -----------
Net sales $524,019 $479,961
Cost of sales, including
certain buying,
distribution and occupancy
costs 330,654 279,175
----------- -----------
Gross profit 193,365 200,786
Selling, general and
administrative expenses 134,529 118,575
----------- -----------
Income from operations 58,836 82,211
Other income, net 1,365 423
----------- -----------
Income before income
taxes 60,201 82,634
Income tax expense 21,577 29,677
----------- -----------
Net income $38,624 $52,957
=========== ===========
Net income per common
share:
Basic $0.24 $0.31
=========== ===========
Diluted $0.23 $0.31
=========== ===========
Weighted average common
shares and common share
equivalents outstanding:
Basic 162,407,330 168,852,072
=========== ===========
Diluted 165,293,594 172,819,037
=========== ===========
AS A PERCENT OF NET SALES
Net sales 100.0% 100.0%
Cost of sales, including
certain buying,
distribution and occupancy
costs 63.1 58.2
----------- -----------
Gross profit 36.9 41.8
Selling, general and
administrative expenses 25.7 24.7
----------- -----------
Income from operations 11.2 17.1
Other income, net 0.3 0.1
----------- -----------
Income before income
taxes 11.5 17.2
Income tax expense 4.1 6.2
----------- -----------
Net income 7.4% 11.0%
=========== ===========
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
January
April 30, 31, April 30,
2011 2011 2010
---------- ---------- ----------
Assets
Current assets:
Cash and cash equivalents $242,087 $340,257 $259,348
Marketable securities 68,688 116,420 323,910
Accounts receivable, net of
allowance for doubtful
accounts of $1,078, 1,015
and $1,220, respectively 46,539 36,502 35,448
Inventories 264,278 229,561 221,984
Prepaid expenses, deferred
taxes and other current
assets 77,826 81,237 79,840
---------- ---------- ----------
Total current assets 699,418 803,977 920,530
Property and equipment, net 601,249 586,346 548,575
Marketable securities 333,946 351,988 189,467
Deferred income taxes and other
assets 57,774 52,010 49,606
---------- ---------- ----------
Total Assets $1,692,387 $1,794,321 $1,708,178
========== ========== ==========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $109,444 $82,904 $100,439
Accrued expenses, accrued
compensation and other
current liabilities 100,690 128,120 96,738
---------- ---------- ----------
Total current liabilities 210,134 211,024 197,177
Deferred rent and other
liabilities 169,773 171,749 150,855
---------- ---------- ----------
Total Liabilities 379,907 382,773 348,032
---------- ---------- ----------
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares
authorized, none issued -- -- --
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 159,667,925,
164,413,427 and 169,376,345
issued and outstanding
respectively 16 17 17
Additional paid-in-capital -- 27,603 198,702
Retained earnings 1,317,037 1,394,190 1,174,189
Accumulated other
comprehensive loss (4,573) (10,262) (12,762)
---------- ---------- ----------
Total Shareholders' Equity 1,312,480 1,411,548 1,360,146
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,692,387 $1,794,321 $1,708,178
========== ========== ==========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Urban Outfitters, Inc.
CONTACT: Oona McCullough
Director of Investor Relations
(215) 454-4806
