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 13, 2010

 

 

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 13, 2010, 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, 2010.

 

Item 9.01. Financial Statements and Exhibits

 

99.1    Earnings Release dated May 13, 2010 – Operating results for the three months ended April 30, 2010.

 

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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 13, 2010   By:  

/s/ Eric Artz

    Eric Artz
    Chief Financial Officer

 

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Exhibit Index

 

Exhibit No.

  

Description

EX-99.1    Earnings Release dated May 13, 2010 – Operating results for the three months ended April 30, 2010.

 

- 3 -

Earnings Release

Exhibit 99.1

URBAN OUTFITTERS, INC.

First Quarter Results

Philadelphia, PA – May 13, 2010

 

For Immediate Release      Contact:    John Kyees
        Chief Investor Relations Officer
        (215) 454-5500

Urban Outfitters Reports Q1 Earnings Surge 72%

PHILADELPHIA, PA May 13, 2010 (GLOBENEWSWIRE)—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 record first quarter earnings of $53 million or net income of $0.31 per diluted share for the three months ended April 30, 2010.

As stated in the Company’s previous sales release on May 6, 2010, total Company sales for the first quarter rose to $480 million, a 25% increase from the comparable quarter in the prior year. Comparable retail segment sales, which include our direct-to-consumer channel, rose 16% for the quarter while comparable store sales increased 11% for the quarter. Comparable retail segment sales at Anthropologie, Free People, Terrain and Urban Outfitters increased 22%, 25%, 22% and 9%, respectively for the quarter. Direct-to-consumer sales soared 42% and wholesale segment sales grew 4% for the quarter.

“We are delighted to begin the new fiscal year with a series of record-breaking results for the quarter,” said Glen T. Senk, Chief Executive Officer. “I believe our ability to deliver this performance within the greater context of our long term goals of investing in store productivity, ecommerce penetration, international expansion and new brands is all the more impressive,” finished Mr. Senk.

Net sales for the three month periods were as follows:

 

     Three months ended
April 30,
     2010    2009
     (in thousands)

Urban Outfitters stores

   $ 174,259    $ 152,832

Anthropologie stores

     182,705      138,343

Free People stores

     9,987      7,313

Terrain

     1,590      1,303
             

Net store sales

     368,541      299,791
             

Direct-to-consumer

     86,267      60,810
             

Retail segment net sales

     454,808      360,601
             

Wholesale segment Sales

     25,153      24,195
             

Total net sales

   $ 479,961    $ 384,796
             


For the three months ended April 30, 2010, gross profit margins improved by 459 basis points versus the comparable period last year. This increase is primarily due to improvements in initial merchandise margins, a lower rate of merchandise markdowns and leveraging of store occupancy expenses driven by positive comparable store sales during the current quarter.

As of April 30, 2010, inventories increased by $32.1 million, or 17% on a year-over-year basis. The increase is due to the addition of inventory to stock new retail stores. For the quarter ended April 30, 2010, total comparable retail segment inventories at cost, which include our Direct-to-consumer channel, increased by 3%.

During the first quarter, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 55 basis points versus the comparable period last year. This decrease was primarily due to leveraging of direct store fixed and controllable costs helped by the positive comparable store net sales during the quarter. The favorable leveraging of store related costs more than offset an increase in incentive-based compensation due to improved company performance.

Earnings per share increased by 72% to $0.31 per diluted share for the three months ended April 30, 2010. The Company’s annual effective tax rate was 35.9% versus 36.1% for the prior comparable period. The company expects further improvement in the annual effective tax rate for the remainder of the current fiscal year.

During the three months ended April 30, 2010, the Company opened a total of nine new stores including: two new Urban Outfitters stores, five new Anthropologie stores and two new Free People stores. As of February 1st, the Company converted one Free People store to a new Free People wholesale showroom. The Company expects to open approximately 45 new stores during the fiscal year.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 157 Urban Outfitters stores in the United States, Canada, and Europe, a catalog and two web sites; 142 Anthropologie stores in the United States, Canada and Europe, a catalog and two web sites; Free People wholesale, which sells to approximately 1,400 specialty store and select department stores; 35 Free People stores, a catalog and web site; Leifsdottir wholesale, which sells its product to approximately 65 specialty and select department stores; a Leifsdottir web site and one Terrain garden center and web site as of April 30, 2010.

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://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
April 30,
 
     2010     2009  

Net sales

   $ 479,961      $ 384,796   

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

     279,175        241,491   
                

Gross profit

     200,786        143,305   

Selling, general and administrative expenses

     118,575        97,185   
                

Income from operations

     82,211        46,120   

Other income, net

     423        2,091   
                

Income before income taxes

     82,634        48,211   

Income tax expense

     29,677        17,406   
                

Net income

   $ 52,957      $ 30,805   
                

Net income per common share:

    

Basic

   $ 0.31      $ 0.18   
                

Diluted

   $ 0.31      $ 0.18   
                

Weighted average common shares outstanding:

    

Basic

     168,852,072        167,455,872   
                

Diluted

     172,819,037        170,316,708   
                

PERCENT OF NET SALES

    

Net sales

     100     100

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

     58.2        62.8   
                

Gross profit

     41.8        37.2   

Selling, general and administrative expenses

     24.7        25.2   
                

Income from operations

     17.1        12.0   

Other income, net

     0.1        0.5   
                

Income before income taxes

     17.2        12.5   

Income tax expense

     6.2        4.5   
                

Net income

     11.0     8.0
                


URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

     April 30,
2010
    January 31,
2010
    April 30,
2009
 
Assets       

Current assets:

      

Cash and cash equivalents

   $ 259,348      $ 159,024      $ 224,732   

Marketable securities

     323,910        342,512        72,893   

Accounts receivable, net of allowance for doubtful accounts of $1,220, $1,284 and $1,400, respectively

     35,448        38,405        30,079   

Inventories

     221,984        186,130        189,881   

Prepaid expenses, deferred taxes and other current assets

     79,840        80,142        45,513   
                        

Total current assets

     920,530        806,213        563,098   

Property and equipment, net

     548,575        539,961        520,945   

Marketable securities

     189,467        243,445        262,168   

Deferred income taxes and other assets

     49,606        46,474        44,850   
                        

Total Assets

   $ 1,708,178      $ 1,636,093      $ 1,391,061   
                        
Liabilities and Shareholders’ Equity       

Current liabilities:

      

Accounts payable

   $ 100,439      $ 78,041      $ 81,437   

Accrued expenses, accrued compensation and other current liabilities

     96,738        110,508        88,012   
                        

Total current liabilities

     197,177        188,549        169,449   

Deferred rent and other liabilities

     150,855        150,769        132,819   
                        

Total Liabilities

     348,032        339,318        302,268   
                        

Shareholders’ equity:

      

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

     —          —          —     

Common shares; $.0001 par value, 200,000,000 shares authorized, 169,376,345, 168,558,371 and 168,042,088 issued and outstanding, respectively

     17        17        17   

Additional paid-in capital

     198,702        184,620        173,527   

Retained earnings

     1,174,189        1,121,232        932,144   

Accumulated other comprehensive loss

     (12,762     (9,094     (16,895
                        

Total Shareholders’ Equity

     1,360,146        1,296,775        1,088,793   
                        

Total Liabilities and Shareholders’ Equity

   $ 1,708,178      $ 1,636,093      $ 1,391,061