<< Back
Urban Outfitters Q1 Earnings Surge 45 Percent

PHILADELPHIA, May 15, 2008 (PRIME NEWSWIRE) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, Terrain and Urban Outfitters brands today announced that for the three months ended April 30, 2008, income from operations increased 75% to $62.9 million and generated earnings of $0.25 per diluted share.

As stated in the Company's previous sales release on May 8, 2008, total Company sales for the first quarter increased 25% to a record $394.3 million. Comparable ('comp') store sales at Anthropologie, Free People and Urban Outfitters rose 10%, 19% and 10%, respectively, for a combined 10% increase. Direct-to-consumer sales jumped 34% and Free People wholesale sales increased 22%.

"We produced exceptional results during the quarter: 'comp' store sales jumped 10%; gross profit rose 41%, or over 400 basis points; operating margin improved 75% to 16% of net sales; and we opened 12 new stores, including the launch of our newest concept, Terrain," said Glen T. Senk, Chief Executive Officer. "I want to congratulate our teams for delivering such an excellent performance," finished Mr. Senk.

Net sales for the three month periods were as follows:



                                                  Three months ended
                                                       April 30,
                                                   2008         2007
                                                   ----         ----
                                                     (in thousands)
 Urban Outfitters stores                         $159,790     $129,908
 Anthropologie stores                             145,596      118,599
 Free People stores                                 5,859        2,690
 Terrain stores                                       617           --
                                                 --------     --------
   Total store sales                              311,862      251,197
 Direct-to-consumer                                58,248       43,507
                                                 --------     --------
   Total retail segment                           370,110      294,704
 Wholesale                                         24,182       19,840
                                                 --------     --------
   Total net sales                               $394,292     $314,544
                                                 ========     ========

For the three months ended April 30, 2008, gross profit margins increased by 444 basis points versus the comparable period last year. Reductions in merchandise markdowns, followed by improvement to initial merchandise cost and leveraging of store occupancy costs helped achieve the margin growth. As of April 30, 2008, inventories grew by $23.2 million or 13.8%, on a year-over-year basis, driven by the acquisition of inventory to stock new retail stores. Total comparable store inventories decreased by 3%.

During the first quarter, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 7 basis points versus the comparable period last year. This decrease was primarily due to leveraging of direct store controllable costs helped by the increase in 'comp' store net sales, which more than offset certain one-time pre-opening expenses related to the Terrain store launch and development expenses of the new Anthropologie wholesale collection, Leiffsdottir and additional bonus accruals.

Earnings per share increased 47% to $0.25 per diluted share for the three months ended April 30, 2008 and the Company's tax rate rose to 35.7%. Management expects the tax rate to remain fairly consistent for the balance of the fiscal year. The prior year's tax rate was impacted by the receipt of one-time federal tax incentives for work performed on the development of our new home offices. Excluding these one-time federal tax incentives, the Company's estimated tax rate would have been approximately 36.2% and earnings per diluted share would have been $0.14 for the comparable period last year.

During the three months ended April 30, 2008, the Company opened a total of 12 new stores including: 7 new Urban Outfitters stores, 1 new Anthropologie store, 3 new Free People stores and our first Terrain garden center. Terrain is the Company's fourth concept which launched during the first quarter of this fiscal year, opening its retail garden center and cafe to the public in late April on the site of Styer's Nurseries in Concordville, PA. The center offers a wide variety of indoor and outdoor plant material, an eclectic assortment of garden and outdoor living supplies, a cafe and a complete range of landscape and design services. The Company plans to open approximately 45 new stores during fiscal year 2009.

Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 129 Urban Retail stores in the United States, Canada, and Europe; two web sites and a catalog; 109 Anthropologie stores; a catalog and web site; Free People, the Company's wholesale division, which sells its product to approximately 1,700 specialty and department stores as well as through 18 Free People stores, a web-site and catalog and one Terrain garden center as of April 30, 2008.

A conference call will be held today to discuss first quarter results and will be web cast at 11:00 a.m. EDT on: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=1832753

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)

                                                Three Months Ended
                                                     April 30,
                                            --------------------------
                                                2008          2007
                                                ----          ----

 Net sales                                  $    394,292  $    314,544
 Cost of sales, including certain buying,
  distribution and occupancy costs               235,612       201,929
                                            ------------  ------------
   Gross profit                                  158,680       112,615
 Selling, general and administrative
  expenses                                        95,738        76,599
                                            ------------  ------------
   Income from operations                         62,942        36,016
 Other income, net                                 3,220         1,802
                                            ------------  ------------
   Income before income taxes                     66,162        37,818
 Income tax expense                               23,605         8,451
                                            ------------  ------------
   Net income                               $     42,557  $     29,367
                                            ============  ============

 Net income per common share:
   Basic                                    $       0.26  $       0.18
                                            ============  ============
   Diluted                                  $       0.25  $       0.17
                                            ============  ============

 Weighted average common shares
  outstanding:
   Basic                                     166,119,099   164,826,058
                                            ============  ============
   Diluted                                   170,603,420   168,799,775
                                            ============  ============


 PERCENT OF NET SALES
 Net sales                                           100%          100%
 Cost of sales, including certain buying,
  distribution and occupancy costs                  59.8          64.2
                                            ------------  ------------
   Gross profit                                     40.2          35.8
 Selling, general and administrative
  expenses                                          24.2          24.4
                                            ------------  ------------
   Income from operations                           16.0          11.4
 Other income, net                                   0.8           0.6
                                            ------------  ------------
   Income before income taxes                       16.8          12.0
 Income tax expense                                  6.0           2.7
                                            ------------  ------------
 Net income                                         10.8%          9.3%
                                            ============  ============


                              URBAN OUTFITTERS, INC.
                      Condensed Consolidated Balance Sheets
                 (in thousands, except share and per share data)
                                   (unaudited)

                                   April 30,   January 31,   April 30,
                                     2008         2008         2007
                                  ----------   ----------   ----------
           Assets
 Current assets:
   Cash and cash equivalents      $  164,030   $  105,271   $   31,171
   Marketable securities              55,101       80,127      133,508
   Accounts receivable, net of
    allowance for doubtful
    accounts of $1,522, $972 and
    $820, respectively                25,593       26,365       22,037
   Inventories                       191,287      171,925      168,131
   Prepaid expenses, deferred
    taxes and other current
    assets                            46,228       49,922       33,927
                                  ----------   ----------   ----------
 Total current assets                482,239      433,610      388,774

 Property and equipment, net         498,789      488,889      455,601
 Marketable securities               187,549      188,252       62,865
 Deferred income taxes and other
  assets                              36,708       32,040       30,046
                                  ----------   ----------   ----------

 Total Assets                     $1,205,285   $1,142,791   $  937,286
                                  ==========   ==========   ==========

        Liabilities and Shareholders' Equity

 Current liabilities:
   Accounts payable               $   81,112   $   74,020   $   61,794
   Accrued expenses, accrued
    compensation and other
    current liabilities               92,312       93,358       72,076
                                  ----------   ----------   ----------
 Total current liabilities           173,424      167,378      133,870

 Deferred rent and other
  liabilities                        123,469      121,982       91,620
                                  ----------   ----------   ----------
 Total Liabilities                   296,893      289,360      225,490
                                  ----------   ----------   ----------

 Shareholders' equity:
   Preferred shares; $.0001 par
    value, 10,000,000 shares
    authorized, none issued               --           --           --
   Common shares; $.0001 par
    value, 200,000,000 shares
    authorized, 166,967,614,
    166,104,615 and 165,555,935
    issued and outstanding,
    respectively                          17           17           17
   Additional paid-in capital        157,490      144,204      135,334
   Retained earnings                 744,532      701,975      571,111
   Accumulated other
    comprehensive income               6,353        7,235        5,334
                                  ----------   ----------   ----------
 Total Shareholders' Equity          908,392      853,431      711,796
                                  ----------   ----------   ----------
 Total Liabilities and
  Shareholders' Equity            $1,205,285   $1,142,791   $  937,286
                                  ==========   ==========   ==========
CONTACT: Urban Outfitters, Inc.
John Kyees, Chief Financial Officer
(215) 454-5500