Urban Outfitters Inc--Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 21, 2012

 

 

URBAN OUTFITTERS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Pennsylvania   000-22754   23-2003332

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

5000 South Broad St, Philadelphia PA   19112
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (215) 454-5500

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4))

 

 

 


Item 2.02. Results of Operations and Financial Condition

On May 21, 2012, the Company issued an earnings release, which is attached hereto as Exhibit 99.1 and incorporated herein by reference. The earnings release disclosed material non-public information regarding the Company’s earnings for the three months ended April 30, 2012.

Item 9.01. Financial Statements and Exhibits

 

99.1    Earnings Release dated May 21, 2012 – Operating results for the three months ended April 30, 2012.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    URBAN OUTFITTERS, INC.
Date: May 22, 2012     By:  

/s/ Frank Conforti

      Frank Conforti
      Chief Financial Officer

 

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Exhibit Index

 

Exhibit
No.

  

Description

EX-99.1    Earnings Release dated May 21, 2012 – Operating results for the three months ended April 30, 2012.

 

- 3 -

Earnings Release

Exhibit 99.1

URBAN OUTFITTERS, INC.

First Quarter Results

Philadelphia, PA – May 21, 2012

 

For Immediate Release    Contact:   Oona McCullough
     Director of Investor Relations
     (215) 454-4806

Urban Outfitters Reports Record Q1 Sales

PHILADELPHIA, PA May 21, 2012 - 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 $34 million or earnings per diluted share of $0.23 for the three months ended April 30, 2012.

Total Company net sales rose by 9% over the same quarter last year to $569 million. Comparable retail segment net sales, which include our Direct-to-Consumer channels, increased 2% for the quarter, while comparable store net sales decreased 1%. Comparable retail segment net sales at Free People and Urban Outfitters increased 2%, and 6%, respectively, while comparable retail segment net sales at Anthropologie decreased 2% for the quarter. Direct-to-Consumer comparable net sales increased 15% and wholesale segment net sales increased 2% for the quarter.

“We are pleased to announce record first quarter sales that were driven in part by positive regular price ‘comp’ sales,” said Chief Executive Officer, Richard A. Hayne. “We are encouraged by the customer response to the steady progress our brands have made in creative and product execution,” finished Mr. Hayne.

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

 

     Three Months Ended  
     April 30,
(in thousands)
 
     2012      2011  

Net sales by brand

     

Urban Outfitters

   $ 266,390       $ 235,328   

Anthropologie

     235,118         228,548   

Free People

     61,672         51,751   

Other

     5,750         8,392   
  

 

 

    

 

 

 

Total Company

   $ 568,930       $ 524,019   
  

 

 

    

 

 

 

Net sales by channel

     

Retail Stores

   $ 420,638       $ 391,164   

Direct-to-Consumer

     117,108         102,298   
  

 

 

    

 

 

 

Retail Segment

     537,746         493,462   
  

 

 

    

 

 

 

Wholesale Segment

     31,184         30,557   
  

 

 

    

 

 

 

Total Company

   $ 568,930       $ 524,019   
  

 

 

    

 

 

 


For the first quarter ended April 30, 2012, the gross profit rate declined by 131 basis points versus the prior year’s comparable period. The decline in the rate was primarily due to occupancy deleverage related to an increased number of store openings versus the prior comparable quarter, as well as, an increased number of new and non-comparable European stores. Also contributing to the rate decline, were slightly higher markdowns on a few women’s apparel categories across all brands.

As of April 30, 2012, total inventories increased by $36 million or 13%, on a year-over-year basis. The growth in total inventories is primarily due to an increase in total comparable retail segment inventories of 11% at cost and 5% in units, while total comparable store inventories increased 8% at cost. The remainder of the increase was related to the acquisition of inventory to stock new and non-comparable stores and the growth in the wholesale business.

For the first quarter ended April 30, 2012, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 62 basis points. This increase was primarily due to the deleveraging of direct store controllable expenses driven by the negative comparable store net sales.

During the three months ended April 30, 2012, the Company opened a total of 14 new stores including: 7 Free People stores, 4 Urban Outfitters stores, 2 Anthropologie stores and 1 BHLDN store.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 201 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 170 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, 69 Free People stores, catalogs and website; 2 BHLDN stores and a website and 1 Terrain garden center and website, as of April 30, 2012.

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. EDT at: http://edge.media-server.com/m/p/5ncua79g/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,” “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, 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 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, 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)


URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

(in thousands, except share and per share data)

(unaudited)

 

     Three Months Ended
April 30,
 
     2012     2011  

Net sales

   $ 568,930      $ 524,019   

Cost of sales, including certain buying, distribution and occupancy costs

     366,451        330,654   
  

 

 

   

 

 

 

Gross profit

     202,479        193,365   

Selling, general and administrative expenses

     149,564        134,529   
  

 

 

   

 

 

 

Income from operations

     52,915        58,836   

Other income, net

     299        1,365   
  

 

 

   

 

 

 

Income before income taxes

     53,214        60,201   

Income tax expense

     19,257        21,577   
  

 

 

   

 

 

 

Net income

   $ 33,957      $ 38,624   
  

 

 

   

 

 

 

Net income per common share:

    

Basic

   $ 0.24      $ 0.24   

Diluted

   $ 0.23      $ 0.23   

Weighted average common shares and common share equivalents outstanding:

    

Basic

     144,709,199        162,407,330   

Diluted

     145,568,667        165,293,594   

AS A PERCENT OF NET SALES

    

Net sales

     100.0     100.0

Cost of sales, including certain buying, distribution and occupancy costs

     64.4     63.1
  

 

 

   

 

 

 

Gross profit

     35.6     36.9

Selling, general and administrative expenses

     26.3     25.7
  

 

 

   

 

 

 

Income from operations

     9.3     11.2

Other income, net

     0.1     0.3
  

 

 

   

 

 

 

Income before income taxes

     9.4     11.5

Income tax expense

     3.4     4.1
  

 

 

   

 

 

 

Net income

     6.0     7.4
  

 

 

   

 

 

 


URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

     April 30,
2012
    January 31,
2012
    April 30,
2011
 
ASSETS       

Current assets:

      

Cash and cash equivalents

   $ 130,462      $ 145,273      $ 243,939   

Marketable securities

     117,056        89,854        68,688   

Accounts receivable, net of allowance for doubtful accounts of $1,799, $1,614 and $1,078, respectively

     43,882        36,673        46,539   

Inventories

     299,750        250,073        264,278   

Prepaid expenses, deferred taxes and other current assets

     84,738        75,119        77,846   
  

 

 

   

 

 

   

 

 

 

Total current assets

     675,888        596,992        701,290   

Property and equipment, net

     711,932        684,979        601,249   

Marketable securities

     91,231        126,913        333,946   

Deferred income taxes and other assets

     76,293        74,824        57,774   
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 1,555,344      $ 1,483,708      $ 1,694,259   
  

 

 

   

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY       

Current liabilities:

      

Accounts payable

   $ 117,806      $ 95,754      $ 109,444   

Accrued expenses, accrued compensation and other current liabilities

     137,398        137,712        102,562   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     255,204        233,466        212,006   

Deferred rent and other liabilities

     187,819        183,974        169,773   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     443,023        417,440        381,779   

Shareholders’ equity:

      

Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued

     —          —          —     

Common shares; $.0001 par value, 200,000,000 shares authorized, 144,808,807, 144,633,007 and 159,667,925 issued and outstanding respectively

     15        15        16   

Additional paid-in-capital

     —          —          —     

Retained earnings

     1,117,693        1,077,765        1,317,036   

Accumulated other comprehensive loss

     (5,387     (11,512     (4,572
  

 

 

   

 

 

   

 

 

 

Total Shareholders’ Equity

     1,112,321        1,066,268        1,312,480   
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 1,555,344      $ 1,483,708      $ 1,694,259