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Urban Outfitters Reports a 34% Increase in Net Income
PHILADELPHIA--(BUSINESS WIRE)--May 15, 2003--Richard A. Hayne, Chairman of the Board and President of Urban Outfitters, Inc. (NASDAQ:URBN), today announced sales and earnings for the first quarter and the fiscal year ended on April 30, 2003.
Net income for the quarter increased by 34% to $6.4 million or $0.32 per diluted share versus $4.8 million or $0.26 per diluted share for the comparable first quarter last year.
"We had outstanding results this past quarter," said Mr. Hayne. "We are very pleased to deliver positive "comp" store sales and a 34% increase in bottom line performance. Our retail brands, Urban Outfitters and Anthropologie, have never been stronger. The summer apparel assortments have been well received, and May sales, thus far, continue to modestly exceed our plan."
Net sales for the quarter totaled $107.0 million, a 14% increase compared to the same quarter last year. Of the $12.9 million increase, $9.1 million resulted from sales at noncomparable and new stores. Comparable store sales increased $1.5 million or 2% versus an 18% increase last year. Comparable store sales were up 5% at Urban Retail and were down 2% at Anthropologie Retail, as compared to increases of 12% and 27%, respectively, for the comparable period. Direct-to-consumer sales jumped $2.4 million or 35% for the quarter.
Net sales were as follows:
Three months ended April 30,
2003 2002
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(in thousands)
Urban Outfitters store sales $52,109 $45,788
Anthropologie store sales 40,954 36,615
Direct-to-consumer sales 9,527 7,082
Free People sales 4,438 4,589
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Total net sales $107,028 $94,074
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Gross profit margins increased to 35.4% of net sales in the first quarter of fiscal 2004 versus 34.2% in last year's comparable period. This gain was primarily due to the higher initial margins associated with the continued growth of private label and better sourcing of apparel merchandise. Total inventories at April 30, 2003 increased by 27.5%. Comparable store inventories increased by 7.8%, consistent with the Company's plan.
Selling, general and administrative expenses, expressed as a percentage of net sales were 25.4% compared to last year's 25.5%. The continuing cost controls in place more than offset the costs associated with the successful testing of a catalog at Urban Direct.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 54 Urban Outfitters stores in the United States, Canada, and Europe; an Urban Outfitters web site and catalog; 40 Anthropologie stores in the United States; an Anthropologie catalog and web site; and Free People, the Company's wholesale division, which sells its product to approximately 1,100 specialty stores, department stores and catalogs, as well as through one Free People store. The wholesale division sells its products under two labels: Free People and bdg.
A conference call will be held today to discuss first quarter results and will be web cast at 11:00 a.m. EDT on: www.companyboardroom.com. Notes of the Company's conference call presentation will be available on www.urbanoutfittersinc.com.
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
(amounts in thousands, except share and per share data)
(Unaudited)
Three Months Ended
April 30,
2003 2002
----------- -----------
Net sales $107,028 $94,074
Cost of sales, including certain buying,
distribution and occupancy costs 69,095 61,904
----------- -----------
Gross profit 37,933 32,170
Selling, general and administrative expenses 27,273 24,002
----------- -----------
Income from operations 10,660 8,168
Other income (expense), net 84 (177)
----------- -----------
Income before income taxes 10,744 7,991
Income tax expense 4,351 3,236
----------- -----------
Net income $6,393 $4,755
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Net income per common share:
Basic $0.33 $0.27
=========== ===========
Diluted $0.32 $0.26
=========== ===========
Weighted average common shares outstanding:
Basic 19,409,787 17,569,709
=========== ===========
Diluted 19,766,220 18,112,904
=========== ===========
PERCENT OF NET SALES
Net sales 100.0% 100.0%
Cost of sales, including certain buying,
distribution and occupancy costs 64.6 65.8
----------- -----------
Gross profit 35.4 34.2
Selling, general and administrative expenses 25.4 25.5
----------- -----------
Income from operations 10.0 8.7
Other income (expense), net 0.1 (0.2)
----------- -----------
Income before income taxes 10.1 8.5
Income tax expense 4.1 3.4
----------- -----------
Net income 6.0% 5.1%
=========== ===========
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
(Unaudited)
April 30, January 31, April 30,
2003 2003 2002
------- ------- -------
Assets
Current assets:
Cash and cash equivalents $57,632 $72,127 $74,647
Marketable securities 7,000 7,379 4,032
Accounts receivable, net of
allowance for doubtful accounts of
$625, $563 and $535, respectively 5,538 3,262 4,678
Inventories 53,739 48,825 42,143
Prepaid expenses, deferred taxes
and other expenses 15,222 12,991 6,639
------- ------- -------
Total current assets 139,131 144,584 132,139
Property and equipment, net 110,406 108,847 106,018
Marketable securities 28,672 15,640 --
Deferred taxes and other assets 8,929 8,925 7,430
------- ------- -------
$287,138 $277,996 $245,587
======= ======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $21,604 $19,186 $22,497
Accrued expenses, accrued
compensation and other current
liabilities 22,734 23,886 18,493
------- ------- -------
Total current liabilities 44,338 43,072 40,990
Deferred rent and other liabilities 10,740 10,539 8,836
------- ------- -------
Total liabilities 55,078 53,611 49,826
------- ------- -------
Commitments and contingencies
Shareholders' equity:
Preferred shares; $.0001 par value,
10,000,000 shares authorized, none
issued - - -
Common shares; $.0001 par value,
50,000,000 shares authorized,
19,457,936, 19,381,636, and
19,152,786 issued and outstanding,
respectively 2 2 2
Additional paid-in capital 68,625 67,162 62,635
Retained earnings 162,922 156,529 133,871
Accumulated other comprehensive
income (loss) 511 692 (747)
------- ------- -------
Total shareholders' equity 232,060 224,385 195,761
------- ------- -------
$287,138 $277,996 $245,587
======= ======= =======
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(Unaudited)
Three Months Ended
April 30,
2003 2002
------ ------
Cash flows from operating activities:
Net income $6,393 $4,755
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,948 4,212
Tax benefit of stock option exercises 288 886
Changes in assets and liabilities:
Increase in receivables (2,279) (543)
Increase in inventories (4,941) (1,003)
(Increase) decrease in prepaid expenses
and other assets (2,253) 2,032
Increase in payables, accrued expenses
and other liabilities 703 1,801
------ ------
Net cash provided by operating activities 2,859 12,140
------ ------
Cash flows from investing activities:
Capital expenditures (5,925) (5,705)
Purchases of marketable securities (24,228) (4,000)
Sales and maturities of marketable
securities 11,578 --
------ ------
Net cash used in investing activities (18,575) (9,705)
------ ------
Cash flows from financing activities:
Exercise of stock options 1,175 2,407
Issuance of common shares, net of issuance
costs -- 41,470
------ ------
Net cash provided by financing activities 1,175 43,877
------ ------
Effect of exchange rate changes on cash and cash
equivalents 46 84
------ ------
(Decrease) increase in cash and cash equivalents (14,495) 46,396
Cash and cash equivalents at beginning of period 72,127 28,251
------ ------
Cash and cash equivalents at end of period $57,632 $74,647
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CONTACT: Urban Outfitters, Inc. Stephen A. Feldman, 215/564-2313 SOURCE: Urban Outfitters, Inc.
