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Urban Outfitters Reports Record Q2 Sales

PHILADELPHIA, PA, August 17, 2015 - 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 $67 million and $100 million for the three and six months ended July 31, 2015, respectively.  Earnings per diluted share were $0.52 and $0.76 for the three and six months ended July 31, 2015, respectively.

Total Company net sales for the second quarter of fiscal 2016 increased 7% over the same quarter last year to a record $867 million. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, increased 4%. Comparable Retail segment net sales increased 14% at Free People, 4% at Urban Outfitters and 2% at the Anthropologie Group. Wholesale segment net sales rose 21%.

"We are pleased to announce record sales for the second quarter driven by positive retail segment comp growth at each brand," said Richard A. Hayne, Chief Executive Officer.  "Without question, the brands' strong execution of our long-term strategy helped fuel that sales growth and laid the groundwork for future increases, as well," finished Mr. Hayne.

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

  Three Months Ended   Six Months Ended
  July 31,   July 31,
Net sales by brand   2015     2014     2015     2014
Urban Outfitters $  342,207   $  328,632   $  637,882   $  606,288
Anthropologie Group1 370,672   354,316   682,048   654,299
Free People 154,581   128,305   286,540   236,976
Total Company $  867,460   $  811,253   $  1,606,470   $  1,497,563
        
Net sales by segment        
Retail Segment $  795,740   $  752,116   $  1,480,749   $  1,392,546
Wholesale Segment 71,720   59,137   125,721   105,017
Total Company $  867,460   $  811,253   $  1,606,470   $  1,497,563

1Anthropologie Group consists of the Anthropologie, Bhldn and Terrain brands

For the three and six months ended July 31, 2015, the gross profit rate declined by 71 basis points and 104 basis points versus the prior year's comparable periods, respectively.  The decline in gross profit rate was primarily driven by higher delivery and fulfillment center expenses largely related to the increase in direct-to-consumer sales penetration as well as incremental costs associated with the transition of our South Carolina fulfillment center to Gap, Pennsylvania.

As of July 31, 2015, total inventories increased by $22 million, or 6%, 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 decreased 2% at cost while decreasing 7% in units.

            For the three and six months ended July 31, 2015, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 29 basis points and 22 basis points compared to the prior year's comparable periods, respectively. The increase in both periods was primarily due to increased marketing and technology expenses which drove higher direct-to-consumer traffic.

The Company's effective tax rate for the second quarter of fiscal 2016 was 35.2% compared to 35.5% in the prior year's comparable period.

            On February 23, 2015, the Company's Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. Under this authorization, the Company repurchased and subsequently retired a total of 4.8 million common shares for approximately $170.8 million during the six months ended July 31, 2015.

            On May 27, 2014, the Company's Board of Directors authorized the repurchase of 10 million common shares under a share repurchase program. During the six months ended July 31, 2015, the Company repurchased and subsequently retired 2.3 million shares at a total cost of $82.8 million which completed this authorization. The Company repurchased and subsequently retired 7.7 million common shares at a total cost of $258.2 million during fiscal 2015.

            On July 1, 2015, the Company entered into a five-year $400 million asset-based revolving credit facility with a group of lenders, with JPMorgan Chase Bank N.A. as administrative agent. The new credit facility replaced the Company's existing $175 million line of credit facility with Wells Fargo Bank, National Association, which was set to expire in March 2019, and is secured by the Company's eligible inventory and accounts receivable. As of July 31, 2015, borrowings under the new revolving credit facility totaled approximately $115 million. All borrowings under the revolving credit facilities were used to fund the repurchase of common shares of the Company.

            During the six months ended July 31, 2015, the Company opened a total of 13 new stores including: 7 Free People stores, 4 Anthropologie Group stores and 2 Urban Outfitters stores. The Company closed 3 stores during the six months ended July 31, 2015, 2 Urban Outfitters stores and 1 Free People store.

            Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 238 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 210 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 108 Free People stores in the United States and Canada, catalogs and websites; and Free People wholesale, which sells its product to approximately 1,600 specialty stores and select department stores worldwide; as of July 31, 2015.

A conference call will be held today to discuss second quarter results and will be webcast at 5:00 pm. ET at:  http://edge.media-server.com/m/p/hvn6tkkj/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 a worldwide political and economic 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, failure of our manufacturers to comply with our social compliance program, 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.

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 (Tables follow)


URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

(in thousands, except share and per share data)
(unaudited)

  Three Months Ended   Six Months Ended  
  July 31,   July 31,  
    2015     2014     2015     2014  
               
Net sales $  867,460   $  811,253   $  1,606,470   $  1,497,563
Cost of sales  549,355   507,995   1,041,944   955,794
  Gross profit 318,105   303,258   564,526   541,769
Selling, general and administrative expenses 214,354   198,141   407,721   376,831
  Income from operations 103,751   105,117   156,805   164,938
Other expense, net (596)   (523)   (2,717)   (867)
  Income before income taxes 103,155   104,594   154,088   164,071
Income tax expense 36,314   37,085   54,471   59,084
  Net income $  66,841    $  67,509    $  99,617    $  104,987 
               
Net income per common share:              
  Basic $  0.52    $  0.49    $  0.77    $  0.75 
  Diluted $  0.52    $  0.49    $  0.76    $  0.74 
               
Weighted average common shares and common              
  share equivalents outstanding:              
  Basic 127,910,026   136,453,663   129,529,108   140,201,489
  Diluted 129,080,594   138,177,110   130,931,093   141,978,651
               
               
AS A PERCENT OF NET SALES              
Net sales 100.0%   100.0%   100.0%   100.0%
Cost of sales    63.3%     62.6%     64.9%     63.8%
  Gross profit 36.7%   37.4%   35.1%   36.2%
Selling, general and administrative expenses   24.7%     24.4%     25.3%     25.2%
  Income from operations 12.0%   13.0%   9.8%   11.0%
Other expense, net   (0.1%)     (0.1%)   (0.2%)     0.0%
  Income before income taxes 11.9%   12.9%    9.6%    11.0%
Income tax expense   4.2%     4.6%     3.4%     4.0%
  Net income   7.7%     8.3%     6.2%     7.0%

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

           July 31,
 2015
  January 31,
2015
  July 31,
 2014

ASSETS          
Current assets:          
  Cash and cash equivalents $  194,441   $  154,558   $  145,273
  Marketable securities 71,926   104,246   106,721
  Accounts receivable, net of allowance for doubtful accounts          
  of $813, $850 and $1,038, respectively 70,014   70,458   72,813
  Inventories 384,404   358,237   362,028
  Prepaid expenses, deferred taxes and other current assets   118,678     121,618     105,129
  Total current assets 839,463   809,117   791,964
           
Property and equipment, net 900,302   889,232   868,642
Marketable securities 72,764   104,448   157,146
Deferred income taxes and other assets   94,804   85,944     86,394
  Total Assets $ 1,907,333   $ 1,888,741   $ 1,904,146
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities:          
  Accounts payable $  134,673   $  156,090   $  156,810
  Accrued expenses, accrued compensation and other current liabilities   218,604   197,650     211,388
  Total current liabilities 353,277   353,740   368,198
Long-term debt 115,000   -   -
Deferred rent and other liabilities   207,808      207,032      199,891 
  Total Liabilities   676,085   560,772     568,089
           
Shareholders' equity:          
  Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued -   -   -
  Common shares; $.0001 par value, 200,000,000 shares authorized, 125,126,008,          
  130,502,864 and 134,057,393 issued and outstanding respectively 13   13   13
  Additional paid-in-capital -   -   -
  Retained earnings 1,241,227 1,343,383   1,333,658
  Accumulated other comprehensive income (loss)   (9,992)     (15,427)     2,386
  Total Shareholders' Equity   1,231,248     1,327,969     1,336,057
  Total Liabilities and Shareholders' Equity  $ 1,907,333   $ 1,888,741   $ 1,904,146

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


HUG#1946155