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Urban Outfitters Reports Record Q1 Sales

          PHILADELPHIA, PA, May 19, 2014 - Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Bhldn, Free People, Terrain and Urban Outfitters brands, today announced net income of $37 million for the three months ended April 30, 2014.  Earnings per diluted share were $0.26 for the three months ended April 30, 2014.

Total Company net sales for the first quarter of fiscal 2015 increased 6% over the same quarter last year to a record $686 million. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, were flat. Comparable Retail segment net sales increased 25% at Free People and 8% at the Anthropologie Group and decreased 12% at Urban Outfitters. Wholesale segment net sales increased 27%.

"I am pleased to announce record URBN first quarter sales driven by strong performances at both the Anthropologie and Free People brands," said Richard A. Hayne, Chief Executive Officer.  "While Anthropologie and Free People continue to deliver record levels in sales and profits, Urban Outfitters had a disappointing quarter and is working diligently to regain its fashion footing," finished Mr. Hayne.

Net sales by brand and segment for the three month periods were as follows:

  Three Months Ended  
  April 30,  
Net sales by brand      2014        2013  
Urban Outfitters $  277,656   $  292,790
Anthropologie Group1 295,838   268,299
Free People 108,671   83,324
Other 4,145   3,764
Total Company $  686,310   $  648,177
Net sales by segment    
Retail Segment $  640,430   $  611,971
Wholesale Segment 45,880   36,206
Total Company $  686,310   $  648,177

1 Anthropologie Group consists of the Anthropologie and Bhldn brands.

For the three months ended April 30, 2014, the gross profit rate declined by 209 basis points versus the prior year's comparable period. The decline in gross profit rate was primarily due to a deleverage in store occupancy costs driven by negative store comparable sales at the Urban Outfitters brand and pre-opening rent expense related to new stores. Lower merchandise margins at the Urban Outfitters brand resulting from poor performing product also contributed to the decline.
As of April 30, 2014, total inventories increased by $24 million, or 7%, on a year-over-year basis. The growth in total inventories is primarily related to the acquisition of inventory to stock new and non-comparable stores. Comparable Retail segment inventories increased 2% at cost while decreasing 5% in units.

            For the three months ended April 30, 2014, selling, general and administrative expenses, expressed as a percentage of net sales, increased 45 basis points compared to the prior year period. The increase was primarily due to increased marketing expenses which drove higher direct-to-consumer traffic. 

The Company's effective tax rate for the first quarter of fiscal 2015 was 37.0% compared to 35.4% in the prior year period. The increase in the rate was due to a true-up in state taxes.

            During the third quarter of fiscal 2014, the Board of Directors authorized the repurchase of 10.0 million common shares under a share repurchase program. During the first quarter of fiscal 2015, the Company repurchased and retired 9.7 million common shares for approximately $353 million completing the share repurchase authorization.

            During the three months ended April 30, 2014, the Company opened a total of 5 new stores including: 2 Urban Outfitters stores, 2 Free People stores and 1 Anthropologie Group store.

            Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 232 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 190 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 92 Free People stores in the United States and Canada, catalogs and websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores worldwide; and 2 Terrain garden centers and a website, as of April 30, 2014.

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 webcast at 5:00 pm. ET at:  http://edge.media-server.com/m/p/dphfjzty/lan/en

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," "will," "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, continuation of lowered levels of consumer spending resulting from the continuing worldwide economic downturn and related debt crisis, any effects of terrorist acts or war, natural disasters or severe weather conditions, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, the departure of one or more key senior executives, 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, changes in accounting standards and subjective assumptions, regulatory changes and legal matters 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)


Condensed Consolidated Statements of Income

(in thousands, except share and per share data)

Three Months Ended
April 30,
2014 2013
Net sales $      686,310 $      648,177
Cost of sales  447,799 409,368
          Gross profit 238,511 238,809
Selling, general and administrative expenses 178,690 165,843
          Income from operations 59,821 72,966
Other expense, net (344) (129)
          Income before income taxes 59,477 72,837
Income tax expense 21,999 25,779
          Net income $        37,478 $        47,058
Net income per common share:
       Basic $            0.26  $            0.32 
       Diluted $            0.26  $            0.32 
Weighted average common shares and common
   share equivalents outstanding:
       Basic 144,075,666 146,289,751
       Diluted 145,906,544 148,799,056
Net sales 100.0% 100.0%
Cost of sales    65.2%   63.2%
          Gross profit 34.8% 36.8%
Selling, general and administrative expenses   26.1%   25.5%
           Income from operations 8.7% 11.3%
Other expense, net     0.0%     (0.1%)
         Income before income taxes 8.7% 11.2%
Income tax expense     3.2%     3.9%
          Net income   5.5%    7.3%

Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)

 April 30,
January 31,
April 30,

Current assets:
    Cash and cash equivalents $   191,825 $   242,058 $   273,464
    Marketable securities 149,796 281,813 214,938
    Accounts receivable, net of allowance for doubtful accounts
        of $1,986, $1,711 and $1,274, respectively 59,267 55,161 48,868
    Inventories 349,045 311,207 325,471
    Prepaid expenses, deferred taxes and other current assets       103,097       104,741        91,829
            Total current assets 853,030 994,980 954,570
Property and equipment, net 836,244 806,909 721,872
Marketable securities 175,694 366,422 149,771
Deferred income taxes and other assets        80,297        52,903        43,190
           Total Assets $ 1,945,265 $ 2,221,214 $ 1,869,403
Current liabilities:
    Accounts payable $    172,515 $    137,036 $    128,528
    Accrued expenses, accrued compensation and other current liabilities       189,585       194,794       121,506
           Total current liabilities 362,100 331,830 250,034
Deferred rent and other liabilities      196,760       195,214       193,468 
           Total Liabilities      558,860      527,044      443,502
Shareholders' equity:
   Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued - - -
   Common shares; $.0001 par value, 200,000,000 shares authorized, 137,651,372,
       147,309,575 and 146,813,217 issued and outstanding respectively 14 15 15
    Additional paid-in-capital - 97,684 74,618
    Retained earnings 1,384,671 1,597,439 1,362,137
    Accumulated other comprehensive income (loss)      1,720        (968)      (10,869)
           Total Shareholders' Equity   1,386,405   1,694,170   1,425,901
           Total Liabilities and Shareholders' Equity $ 1,945,265 $ 2,221,214 $ 1,869,403

Oona McCullough
Director of Investor Relations
(215) 454-4806