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Urban Outfitters Reports Record 4th Quarter Operating Profit

PHILADELPHIA, Mar 7, 2011 (GlobeNewswire via COMTEX) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, Leifsdottir, Terrain and Urban Outfitters brands, today announced earnings of $75 million and $273 million for the fourth quarter and year ended January 31, 2011, respectively. Earnings per diluted share were $0.45 for the quarter and $1.60 for the year.

Total Company net sales rose by 14% over the same quarter last year to $668 million. Comparable retail segment net sales, which include our direct-to-consumer channels, improved 4% for the quarter while comparable store net sales decreased 2% for the quarter. Comparable retail segment net sales at Anthropologie, Free People and Urban Outfitters increased 1%, 28%, and 5% respectively for the quarter. Direct-to-consumer comparable net sales soared 28% and wholesale segment net sales rose 31% for the quarter.

"I am pleased to announce record sales and operating profits for the quarter, as well as our second highest operating margin rate for the fourth quarter and year," said Glen T. Senk, Chief Executive Officer. "It was another year of strong performance as we delivered 17% sales growth, 22% operating income growth, and executed our long standing goal of growing profits faster than sales," finished Mr. Senk.

Net sales by brand and channel for the three and twelve months were as follows:

                       Three Months Ended
                                            Twelve Months Ended
                           January 31            January 31
                       ------------------  ----------------------
  Net sales by brand     2011      2010       2011        2010
                       --------  --------  ----------  ----------
  Urban Outfitters     $321,772  $284,068  $1,041,502    $917,223
  Anthropologie         283,418   257,759   1,011,999     842,374
  Free People            58,941    43,589     202,493     163,634
  Other                   4,259     3,077      18,108      14,584
                       --------  --------  ----------  ----------
  Total Company        $668,390  $588,493  $2,274,102  $1,937,815
                       ========  ========  ==========  ==========
  Net sales by
   channel
  Retail Stores        $492,381  $452,774  $1,720,002  $1,509,994
  Direct-to-consumer    145,282   112,231     433,790     323,739
                       --------  --------  ----------  ----------
    Retail Segment      637,663   565,005   2,153,792   1,833,733
                       --------  --------  ----------  ----------
  Wholesale Segment      30,727    23,488     120,310     104,082
                       --------  --------  ----------  ----------
  Total Company        $668,390  $588,493  $2,274,102  $1,937,815
                       ========  ========  ==========  ==========

For the fourth quarter ended January 31, 2011, gross profit margin percentage declined by 208 basis points versus the prior year's comparable period. This decrease was primarily due to increased merchandise markdowns to clear seasonal inventory associated with changing women's apparel fashion trends, along with higher shipping costs associated with increased penetration of international direct-to-consumer business.

For the year ended January 31, 2011, gross profit margin improved by 62 basis points versus the prior year's comparable period. The increase was primarily due to improved merchandise margins and leveraging of store occupancy expense driven by positive comparable store sales.

As of January 31, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 10% at cost while total comparable store inventory increased by 4% at cost. Total inventories grew by $43 million or 23%, on a year-over-year basis, driven primarily by the acquisition of inventory to stock new retail stores.

For the fourth quarter ended January 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 7 basis points. This increase was primarily due to continued investments in systems, international expansion and start up expenses for BHLDN which launched on February 14th, 2011. For the year ended January 31, 2011, selling, general and administration expenses, expressed as a percentage of net sales, decreased by 11 basis points versus the prior comparable period. This decrease was primarily due to leveraging of direct store fixed and controllable costs helped by the positive comparable retail segment sales during the year.

The Company's annual effective tax rate for January 31, 2011 decreased to 34.6% from 36.2% in the prior year. This decrease was due to the favorable mix of earnings in certain foreign jurisdictions and the current year federal rehabilitation credit.

On February 28, 2006, our Board of Directors approved a stock repurchase program. The program authorizes the Company to purchase up to 8 million shares of our common shares from time-to-time, based upon prevailing market conditions. We repurchased 1.2 million common shares during the fiscal year ended January 31, 2007. During the quarter ended January 31, 2011, the Company did not repurchase any shares. During the year ended January 31, 2011 the Company repurchased and subsequently retired 6.3 million common shares for $205 million. On November 16, 2010, our Board of Directors authorized the repurchase of 10 million additional shares of the Company's common stock, from time-to-time, subject to prevailing market conditions. This authorization supplements the Company's 2006 stock repurchase program.

During the year ended January 31, 2011, the Company opened a total of 46 new stores including: 21 Urban Outfitters stores, 16 Anthropologie stores and 9 Free People stores.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 176 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and two web sites; 153 Anthropologie stores in the United States, Canada and Europe, catalogs and two websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 42 Free People stores, catalogs and web site; Leifsdottir wholesale, which sells its product to approximately 65 specialty stores and select department stores, and a Leifsdottir web site and 1 Terrain garden center and web site as of January 31, 2011.

Management's fourth quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss fourth quarter and year end results and will be web cast at 5:00 pm EST 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. 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.

                            (Tables follow)

                               URBAN OUTFITTERS, INC.
                    Condensed Consolidated Statements of Income
                  (in thousands, except share and per share data)
                                    (unaudited)


                                  Three Months Ended            Year Ended
                                      January 31,               January 31,
                               ------------------------  ------------------------
                                  2011         2010         2011         2010
                               -----------  -----------  -----------  -----------
  Net sales                       $668,390     $588,493   $2,274,102   $1,937,815
  Cost of sales, including
   certain buying,
   distribution and occupancy
   costs                           403,330      342,832    1,337,482    1,151,670
                               -----------  -----------  -----------  -----------
     Gross profit                  265,060      245,661      936,620      786,145
  Selling, general and
   administrative expenses         144,737      126,999      522,417      447,161
                               -----------  -----------  -----------  -----------
     Income from operations        120,323      118,662      414,203      338,984
  Other income, net                  1,090          575        3,005        5,422
                               -----------  -----------  -----------  -----------
     Income before income
      taxes                        121,413      119,237      417,208      344,406
  Income tax expense                46,175       41,562      144,250      124,513
                               -----------  -----------  -----------  -----------
     Net income                    $75,238      $77,675     $272,958     $219,893
                               ===========  ===========  ===========  ===========
  Net income per common
   share:
     Basic                           $0.46        $0.46        $1.64        $1.31
                               ===========  ===========  ===========  ===========
     Diluted                         $0.45        $0.45        $1.60        $1.28
                               ===========  ===========  ===========  ===========
  Weighted average common
   shares and common share
   equivalents outstanding:
     Basic                     164,188,852  168,499,260  166,896,322  168,053,502
                               ===========  ===========  ===========  ===========
     Diluted                   167,677,305  172,421,607  170,333,550  171,230,245
                               ===========  ===========  ===========  ===========

  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                             60.3%        58.3%        58.8%        59.4%
                               -----------  -----------  -----------  -----------
     Gross profit                    39.7%        41.7%        41.2%        40.6%
  Selling, general and
   administrative expenses           21.7%        21.5%        23.0%        23.1%
                               -----------  -----------  -----------  -----------
     Income from operations          18.0%        20.2%        18.2%        17.5%
  Other income, net                   0.2%         0.1%         0.1%         0.3%
                               -----------  -----------  -----------  -----------
     Income before income
      taxes                          18.2%        20.3%        18.3%        17.8%
  Income tax expense                  6.9%         7.1%         6.3%         6.4%
                               -----------  -----------  -----------  -----------
     Net income                      11.3%        13.2%        12.0%        11.4%
                               ===========  ===========  ===========  ===========
                   URBAN OUTFITTERS, INC.
           Condensed Consolidated Balance Sheets
       (in thousands, except share and per share data)
                         (unaudited)


                                     January     January
                                       31,         31,
                                       2011        2010
                                    ----------  ----------
               Assets
  Current assets:
    Cash and cash equivalents         $340,257    $159,024
    Marketable securities              116,420     342,512
    Accounts receivable, net of
     allowance for doubtful
     accounts of $1,015 and
     $1,284, respectively               34,439      38,405
    Inventories                        229,561     186,130
    Prepaid expenses, deferred
     taxes and other current
     assets                             81,237      80,142
                                    ----------  ----------
  Total current assets                 801,914     806,213
  Property and equipment, net          586,346     539,961
  Marketable securities                350,975     243,445
  Deferred income taxes and other
   assets                               52,365      46,474
                                    ----------  ----------
  Total Assets                      $1,791,600  $1,636,093
                                    ==========  ==========
   Liabilities and Shareholders'
                Equity
  Current liabilities:
    Accounts payable                   $82,904     $78,041
    Accrued expenses, accrued
     compensation and other
     current liabilities               126,057     110,508
                                    ----------  ----------
  Total current liabilities            208,961     188,549
  Deferred rent and other
   liabilities                         171,749     150,769
                                    ----------  ----------
  Total Liabilities                    380,710     339,318
                                    ----------  ----------
  Shareholders' equity:
    Preferred shares; $.0001 par
     value, 10,000,000 shares
     authorized, none issued                --          --
    Common shares; $.0001 par
     value, 200,000,000 shares
     authorized, 164,413,427 and
     168,558,371 issued and
     outstanding, respectively              17          17
    Additional paid-in-capital          27,603     184,620
    Retained earnings                1,394,190   1,121,232
    Accumulated other
     comprehensive loss               (10,920)     (9,094)
                                    ----------  ----------
  Total Shareholders' Equity         1,410,890   1,296,775
                                    ----------  ----------
  Total Liabilities and
   Shareholders' Equity             $1,791,600  $1,636,093
                                    ==========  ==========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Urban Outfitters, Inc.

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