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) November 14, 2011
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 November 14, 2011, 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 and nine months ended October 31, 2011.
Item 9.01. Financial Statements and Exhibits
| 99.1 | Earnings Release dated November 14, 2011 – Operating results for the three and nine months ended October 31, 2011. |
- 1 -
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: November 15, 2011 | By: | /s/ Eric Artz | ||||
| Eric Artz | ||||||
| Chief Financial Officer | ||||||
- 2 -
Exhibit Index
| Exhibit |
Description | |
| EX-99.1 | Earnings Release dated November 14, 2011 – Operating results for the three and nine months ended October 31, 2011. | |
- 3 -
Exhibit 99.1
URBAN OUTFITTERS, INC.
Third Quarter Results
Philadelphia, PA – November 14, 2011
| For Immediate Release | Contact: | Oona McCullough | ||||
| Director of Investor Relations | ||||||
| (215) 454-4806 |
Urban Outfitters Reports Record Q3 Sales
PHILADELPHIA, PA November 14, 2011 (GLOBENEWSWIRE) — Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands today announced net income of $50.7 million and $146.0 million for the three and nine months ended October 31, 2011, respectively. Earnings per diluted share were $0.33 for the quarter and $0.91 for the nine months ended October 31, 2011.
For the third quarter of fiscal 2012, total company net sales increased 6% over the same quarter last year to $610 million. Comparable retail segment net sales, which include the direct-to-consumer channels, decreased 3% for the quarter, while comparable store net sales decreased 7% for the quarter. Comparable retail segment net sales at Free People increased 14%, were flat at Urban Outfitters, and decreased 7% at Anthropologie. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 13% for the quarter.
“We have made progress in many categories during the quarter,” said Chief Executive Officer, Glen T. Senk. “We anticipate additional improvements through continued product focus, aggressive inventory management and the organization changes we announced last week.”
Net sales by brand and channel for the three and nine month periods were as follows:
| Three Months Ended October 31, |
Nine Months Ended October 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales by brand |
||||||||||||||||
| Urban Outfitters |
$ | 291,023 | $ | 265,993 | $ | 798,524 | $ | 719,730 | ||||||||
| Anthropologie |
244,140 | 247,549 | 745,327 | 728,581 | ||||||||||||
| Free People |
70,090 | 56,108 | 180,548 | 143,552 | ||||||||||||
| Other |
4,700 | 3,942 | 18,754 | 13,849 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Company |
$ | 609,953 | $ | 573,592 | $ | 1,743,153 | $ | 1,605,712 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net sales by channel |
||||||||||||||||
| Retail Stores |
$ | 447,952 | $ | 433,425 | $ | 1,303,788 | $ | 1,227,621 | ||||||||
| Direct-to-consumer |
123,120 | 105,670 | 338,028 | 288,508 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Retail Segment |
571,072 | 539,095 | 1,641,816 | 1,516,129 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Wholesale Segment |
38,881 | 34,497 | 101,337 | 89,583 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Company |
$ | 609,953 | $ | 573,592 | $ | 1,743,153 | $ | 1,605,712 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
For the three months ended October 31, 2011, gross profit margin percentage declined by 571 basis points versus the prior year’s comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving women’s apparel inventory at both Anthropologie and Urban Outfitters, as well as occupancy deleverage caused by negative comparable store sales. For the nine months ended October 31, 2011, gross profit margin percentage declined by 507 basis points versus the prior year’s comparable period. This decline was primarily due to increased merchandise markdowns noted above.
As of October 31, 2011, total inventories grew by $78 million or 27%, on a year-over-year basis. Total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 18% at cost while total comparable store inventory increased by 13% at cost. The balance of the increase was driven by the acquisition of inventory to stock new retail stores.
For the three months ended October 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 53 basis points versus the prior year comparable period due primarily to the deleverage of direct selling and supervisory costs driven by negative comparable sales. For the nine months ended October 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 60 basis points versus the prior year comparable period primarily due to ecommerce and related catalog investments, as well as, the deleverage of direct selling and supervisory costs driven by negative comparable store sales.
On August 25, 2011, our Board of Directors approved a share repurchase program that authorized the repurchase of 10.0 million additional common shares subject to prevailing market conditions. During the three months ended October 31, 2011, the Company repurchased and retired 13.3 million common shares for approximately $322 million. During the nine months ended October 31, 2011, the Company repurchased and retired 20.5 million common shares for approximately $538 million. These repurchases completed the Company’s 2010 and 2011 repurchase authorizations. As of October 31, 2011 no common shares were available for repurchase.
During the nine months ended October 31, 2011, the Company opened a total of 36 new stores including: 13 Free People stores, 11 Anthropologie stores, 11 Urban Outfitters stores and 1 BHLDN store.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 187 Urban Outfitters stores in the United States, Canada and Europe, catalogs and websites; 164 Anthropologie stores in the United States, Canada and Europe, catalogs and websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 55 Free People stores, catalogs and websites, 1 Terrain garden center and website and 1 BHLDN store and website as of October 31, 2011.
Management’s third quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss third quarter 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. When used in this release, the words “project,” “believe,” “plan,” “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, and continuation of lowered levels of consumer spending resulting from the continuing worldwide economic downturn, 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, 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, potential difficulty liquidating certain marketable security investments 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.
###
(Tables follow)
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 31, | October 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 609,953 | $ | 573,592 | $ | 1,743,153 | $ | 1,605,712 | ||||||||
| Cost of sales, including certain buying, distribution and occupancy costs |
393,850 | 337,599 | 1,102,595 | 934,152 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
216,103 | 235,993 | 640,558 | 671,560 | ||||||||||||
| Selling, general and administrative expenses |
142,742 | 131,193 | 420,366 | 377,680 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
73,361 | 104,800 | 220,192 | 293,880 | ||||||||||||
| Other income, net |
2,018 | 876 | 4,318 | 1,915 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
75,379 | 105,676 | 224,510 | 295,795 | ||||||||||||
| Income tax expense |
24,700 | 32,570 | 78,514 | 98,075 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 50,679 | $ | 73,106 | $ | 145,996 | $ | 197,720 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income per common share: |
||||||||||||||||
| Basic |
$ | 0.34 | $ | 0.44 | $ | 0.93 | $ | 1.18 | ||||||||
| Diluted |
$ | 0.33 | $ | 0.43 | $ | 0.91 | $ | 1.16 | ||||||||
| Weighted average common shares and common share equivalents outstanding: |
||||||||||||||||
| Basic |
151,170,175 | 165,699,540 | 157,313,818 | 167,808,729 | ||||||||||||
| Diluted |
153,434,811 | 168,575,637 | 159,751,493 | 171,228,883 | ||||||||||||
| 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 |
64.6 | % | 58.9 | % | 63.2 | % | 58.2 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
35.4 | % | 41.1 | % | 36.8 | % | 41.8 | % | ||||||||
| Selling, general and administrative expenses |
23.4 | % | 22.8 | % | 24.2 | % | 23.5 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
12.0 | % | 18.3 | % | 12.6 | % | 18.3 | % | ||||||||
| Other income, net |
0.4 | % | 0.1 | % | 0.3 | % | 0.1 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
12.4 | % | 18.4 | % | 12.9 | % | 18.4 | % | ||||||||
| Income tax expense |
4.1 | % | 5.7 | % | 4.5 | % | 6.1 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
8.3 | % | 12.7 | % | 8.4 | % | 12.3 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
| October 31, 2011 |
January 31, 2011 |
October 31, 2010 |
||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 83,370 | $ | 340,257 | $ | 253,546 | ||||||
| Marketable securities |
46,649 | 116,420 | 250,078 | |||||||||
| Accounts receivable, net of allowance for doubtful accounts of $1,046, $1,015 and $1,538, respectively |
46,830 | 36,502 | 47,653 | |||||||||
| Inventories |
367,407 | 229,561 | 289,256 | |||||||||
| Prepaid expenses, deferred taxes and other current assets |
64,074 | 81,237 | 59,073 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current assets |
608,330 | 803,977 | 899,606 | |||||||||
| Property and equipment, net |
670,752 | 586,346 | 582,786 | |||||||||
| Marketable securities |
129,146 | 351,988 | 186,202 | |||||||||
| Deferred income taxes and other assets |
69,877 | 52,010 | 53,377 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Assets |
$ | 1,478,105 | $ | 1,794,321 | $ | 1,721,971 | ||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and Shareholders’ Equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable |
$ | 134,480 | $ | 82,904 | $ | 114,967 | ||||||
| Accrued expenses, accrued compensation and other current liabilities |
130,590 | 128,120 | 123,061 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current liabilities |
265,070 | 211,024 | 238,028 | |||||||||
| Deferred rent and other liabilities |
179,229 | 171,749 | 164,044 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Liabilities |
444,299 | 382,773 | 402,072 | |||||||||
| Shareholders’ equity: |
||||||||||||
| Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued |
— | — | — | |||||||||
| Common shares; $.0001 par value, 200,000,000 shares authorized, 144,201,664, 164,413,427 and 163,914,628 issued and outstanding respectively |
15 | 17 | 17 | |||||||||
| Additional paid-in-capital |
— | 27,603 | 10,165 | |||||||||
| Retained earnings |
1,041,847 | 1,394,190 | 1,318,952 | |||||||||
| Accumulated other comprehensive loss |
(8,056 | ) | (10,262 | ) | (9,235 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total Shareholders’ Equity |
1,033,806 | 1,411,548 | 1,319,899 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,478,105 | $ | 1,794,321 | $ | 1,721,971 | ||||||
|
|
|
|
|
|
|
|||||||