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Urban Outfitters Reports Q4 Earnings
As stated in the Company's previous sales release on February 5, 2009, total sales for the fourth quarter reached a record $508 million, an increase of 9% over the comparable quarter last year. Comparable retail segment sales, which include our Direct-to-consumer channels, increased 3% for the quarter. Comparable store sales rose 3% at Urban Outfitters and decreased 6% and 13% at Anthropologie and Free People respectively, for a combined total company comparable store sales decrease of 1%. Direct-to-consumer sales surged 20%, reflecting strong growth across all brands. Free People wholesale sales decreased 3% for the quarter. Total Company net sales for the year ended January 31, 2009 increased 22%, to a record $1.8 billion.
"We are pleased to announce healthy fourth quarter earnings despite an uncertain and challenging environment," said Glen T. Senk, Chief Executive Officer. "We are particularly proud of our team's ability to execute two critical tasks during the quarter: reducing 'comp' inventory levels by 13% versus the prior year, and implementing measurable cost control initiatives resulting in SG&A expense improvements of 73 basis points versus the prior year. It was another record breaking year for the URBN team, and we enter the spring selling season enthusiastically committed to providing a compelling product assortment and customer experience," finished Mr. Senk.
Net sales for the periods were as follows:
Three months ended Twelve months ended
January 31, January 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
(in thousands) (in thousands)
Urban Outfitters
stores $213,435 $196,625 $771,362 $628,328
Anthropologie stores 172,098 165,853 642,161 561,990
Free People stores 9,588 6,302 32,907 17,192
Terrain 1,165 -- 5,656 --
---------- ---------- ---------- ----------
Net store sales 396,286 368,780 1,452,086 1,207,510
---------- ---------- ---------- ----------
Direct-to-consumer 87,810 72,920 272,472 205,742
---------- ---------- ---------- ----------
Retail segment net
sales 484,096 441,700 1,724,558 1,413,252
---------- ---------- ---------- ----------
Wholesale 23,982 23,711 110,060 94,472
---------- ---------- ---------- ----------
Total net sales $508,078 $465,411 $1,834,618 $1,507,724
========== ========== ========== ==========
For the fourth quarter ended January 31, 2009, gross profit margin declined by 555 basis points, versus the prior year's comparable period. This decrease is primarily due to a higher rate of applied and anticipated merchandise markdowns to clear seasonal inventory. For the year ended January 31, 2009, gross profit margin increased by 64 basis points primarily due to the leveraging of store occupancy costs and improvements to initial margins.
As of January 31, 2009, inventories decreased by $2.2 million or 1% on a year-over-year basis as comparable store inventory declines more than offset additions to inventories for new stores. For the quarter ended January 31, 2009, total comparable store inventories decreased by 13%.
For the fourth quarter and year ended January 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 73 and 76 basis points, respectively, versus the prior year comparable periods. For the quarter, the reduction was primarily driven by cost control across all areas of the business, with the most impact in direct store related expenses. For the year ended January 31, 2009, the favorable rate reduction was primarily due to cost control in direct store related expenses as well as savings related to non-recurring legal fees incurred in the prior year.
The Company's annual effective tax rate was 35.6% versus 31.6% for the prior year. The prior year's rate was favorably impacted by the receipt of one-time federal tax incentives for work performed on the development of our new home office. The Company estimates that next year's tax rate will be similar to this year.
During the year ended January 31, 2009 the Company opened 20 Urban Outfitters stores, 13 Anthropologie stores, 15 Free People stores and 1 Terrain garden center or 49 new stores in total. The Company plans to open 42 to 45 new stores during fiscal year 2010.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 142 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 121 Anthropologie stores, a web site, catalog and Leifsdottir, Anthropologie's recently launched wholesale concept; Free People Wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 30 Free People stores, a web-site and catalog; and 1 Terrain garden center as of January 31, 2009.
A conference call will be held today to discuss fourth quarter results and will be web cast at 11:00 a.m. EST on: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2075955
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.
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
Quarter Ended Fiscal Year Ended
------------- -----------------
January 31, January 31,
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net sales $ 508,078 $ 465,411 $ 1,834,618 $ 1,507,724
Cost of sales,
including
certain buying,
distribution and
occupancy costs 335,186 281,219 1,121,140 930,952
------------ ------------ ------------ ------------
Gross profit 172,892 184,192 713,478 576,772
Selling, general
and
administrative
expenses 109,698 103,861 414,043 351,827
------------ ------------ ------------ ------------
Income from
operations 63,194 80,331 299,435 224,945
Other income, net 2,953 3,459 10,055 9,450
------------ ------------ ------------ ------------
Income before
income taxes 66,147 83,790 309,490 234,395
Income tax
expense 25,602 30,175 110,126 74,164
------------ ------------ ------------ ------------
Net income $ 40,545 $ 53,615 $ 199,364 $ 160,231
============ ============ ============ ============
Net income per
common share:
Basic $ 0.24 $ 0.32 $ 1.20 $ 0.97
============ ============ ============ ============
Diluted $ 0.24 $ 0.32 $ 1.17 $ 0.94
============ ============ ============ ============
Weighted average
common shares
and common share
equivalents
outstanding:
Basic 167,309,239 165,629,648 166,793,062 165,305,207
============ ============ ============ ============
Diluted 170,071,913 170,099,923 170,860,605 169,640,585
============ ============ ============ ============
AS A PERCENT OF
NET SALES
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales,
including
certain buying,
distribution and
occupancy costs 66.0% 60.4% 61.1% 61.7%
------------ ------------ ------------ ------------
Gross profit 34.0% 39.6% 38.9% 38.3%
Selling, general
and
administrative
expenses 21.6% 22.3% 22.6% 23.3%
------------ ------------ ------------ ------------
Income from
operations 12.4% 17.3% 16.3% 15.0%
Other income, net 0.6% 0.7% 0.6% 0.6%
------------ ------------ ------------ ------------
Income before
income taxes 13.0% 18.0% 16.9% 15.6%
Income tax
expense 5.0% 6.4% 6.0% 4.9%
------------ ------------ ------------ ------------
Net income 8.0% 11.6% 10.9% 10.7%
============ ============ ============ ============
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
January 31, January 31,
2009 2008
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 316,035 $ 105,271
Marketable securities 49,948 80,127
Accounts receivable, net of allowance for
doubtful accounts of $1,229 and $972,
respectively 34,611 26,365
Inventories 169,698 171,925
Prepaid expenses, deferred taxes and other
current assets 47,983 49,922
----------- -----------
Total current assets 618,275 433,610
Property and equipment, net 505,407 488,889
Marketable securities 155,226 188,252
Deferred income taxes and other assets 43,974 32,040
----------- -----------
Total Assets $ 1,322,882 $ 1,142,791
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 62,955 $ 74,020
Accrued expenses, accrued compensation and
other current liabilities 76,416 93,358
----------- -----------
Total current liabilities 139,371 167,378
Deferred rent and other liabilities 129,736 121,982
----------- -----------
Total Liabilities 269,107 289,360
----------- -----------
Shareholders' equity:
Preferred shares; $.0001 par value,
10,000,000 shares authorized, none issued -- --
Common shares; $.0001 par value,
200,000,000 shares authorized,
167,712,088 and 166,104,615 issued and
outstanding, respectively 17 17
Additional paid-in-capital 170,166 144,204
Retained earnings 901,339 701,975
Accumulated other comprehensive (loss)
income (17,747) 7,235
----------- -----------
Total Shareholders' Equity 1,053,775 853,431
----------- -----------
Total Liabilities and Shareholders' Equity $ 1,322,882 $ 1,142,791
=========== ===========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Urban Outfitters, Inc.
Urban Outfitters, Inc.John Kyees, Chief Financial Officer
(215) 454-5500
