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 19, 2012

 

 

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))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On November 19, 2012, 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, 2012.

 

Item 9.01.

Financial Statements and Exhibits

 

 

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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: November 20, 2012				By:		/s/ Francis J. Conforti
						Francis J. Conforti
						Chief Financial Officer

 

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Exhibit Index

 

Exhibit No.		Description
EX-99.1		Earnings Release dated November 19, 2012 – Operating results for the three and nine months ended October 31, 2012.

 

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Exhibit 99.1

URBAN OUTFITTERS, INC.

Third Quarter Results

Philadelphia, PA – November 19, 2012

 

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

Urban Outfitters Reports Record Sales

PHILADELPHIA, PA November 19, 2012 - 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 $60 million and $155 million for the three and nine months ended October 31, 2012, respectively. Earnings per diluted share were $0.40 and $1.06 for the three and nine months ended October 31, 2012, respectively.

Total Company net sales rose by 14% over the same quarter last year to $693 million. Comparable retail segment net sales, which include our comparable direct-to-consumer channel, increased by 8% for the quarter, while comparable store net sales decreased by 1%. Comparable retail segment net sales at Free People, Urban Outfitters and Anthropologie increased by 24%, 7% and 6%, respectively, for the quarter. Direct-to-consumer net sales increased by 36% and wholesale segment net sales rose by 7% for the quarter.

“Favorable customer response to our product offerings and better marketing resulted in record third quarter sales and significant margin improvement,” said Chief Executive Officer, Richard A. Hayne. “We see this trend continuing into the fourth quarter which bodes well for our Holiday season,” finished Mr. Hayne.

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,
		2012				2011				2012				2011
Net sales by brand
Urban Outfitters		$	331,845			$	291,023			$	908,898			$	798,524
Anthropologie			266,890				244,140				783,817				745,327
Free People			87,486				70,090				222,947				180,548
Other			6,673				4,700				22,431				18,754
Total Company		$	692,894			$	609,953			$	1,938,093			$	1,743,153
Net sales by channel
Retail Stores		$	483,426			$	447,952			$	1,405,386			$	1,303,788
Direct-to-consumer			167,982				123,120				422,799				338,028
Retail Segment			651,408				571,072				1,828,185				1,641,816
Wholesale Segment			41,486				38,881				109,908				101,337
Total Company		$	692,894			$	609,953			$	1,938,093			$	1,743,153

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For the three months ended October 31, 2012, the gross profit rate improved by 222 basis points versus the prior year’s comparable period. The increase in gross profit rate was primarily due to a reduction in merchandise markdowns. For the nine months ended October 31, 2012, the gross profit rate improved by 29 basis points versus the prior year’s comparable period. The increase in the rate was primarily due to a reduction in merchandise markdowns partially offset by the deleverage of store occupancy costs related to the negative comparable store net sales.

As of October 31, 2012, total inventories increased by $28 million or 8%, 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 and to support the significant growth in the direct-to-consumer channel. Comparable retail segment inventories were flat and comparable store inventories decreased by 6% as of October 31, 2012.

For the three months ended October 31, 2012, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 75 basis points. The increase was primarily due to higher incentive-based compensation in the current quarter. For the nine months ended October 31, 2012, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 41 basis points. This increase was primarily due to the deleveraging of direct store controllable expenses driven by the negative comparable store net sales.

During the nine months ended October 31, 2012, the Company opened a total of 39 new stores including: 15 Free People stores, 12 Urban Outfitters stores, 10 Anthropologie stores, 1 BHLDN store and 1 Terrain garden center, and closed 1 Anthropologie store.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 209 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 177 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, 77 Free People stores in the United States and Canada, catalogs and websites; 2 BHLDN stores and a website and 2 Terrain garden centers and a website, as of October 31, 2012.

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 webcast at 5:00 pm. EST at: http://edge.media-server.com/m/p/nw6i7t93/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,” “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 the continuing worldwide economic downturn and related debt crisis, any effects of terrorist acts or war, 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 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, 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)

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URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

(in thousands, except share and per share data)

(unaudited)

 

		Three Months Ended October 31,								Nine Months Ended October 31,
		2012				2011				2012				2011
Net sales		$	692,894			$	609,953			$	1,938,093			$	1,743,153
Cost of sales, including certain buying, distribution and occupancy costs			432,043				393,850				1,220,258				1,102,595
Gross profit			260,851				216,103				717,835				640,558
Selling, general and administrative expenses			167,341				142,742				475,472				420,366
Income from operations			93,510				73,361				242,363				220,192
Other income, net			128				2,018				571				4,318
Income before income taxes			93,638				75,379				242,934				224,510
Income tax expense			34,120				24,700				88,168				78,514
Net income		$	59,518			$	50,679			$	154,766			$	145,996
Net income per common share:
Basic		$	0.41			$	0.34			$	1.07			$	0.93
Diluted		$	0.40			$	0.33			$	1.06			$	0.91
Weighted average common shares and common share equivalents outstanding:
Basic			145,539,816				151,170,175				145,024,545				157,313,818
Diluted			147,086,982				153,434,811				146,092,442				159,751,493
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			62.4	%			64.6	%			63.0	%			63.2	%
Gross profit			37.6	%			35.4	%			37.0	%			36.8	%
Selling, general and administrative expenses			24.1	%			23.4	%			24.5	%			24.2	%
Income from operations			13.5	%			12.0	%			12.5	%			12.6	%
Other income, net			0.0	%			0.4	%			0.0	%			0.3	%
Income before income taxes			13.5	%			12.4	%			12.5	%			12.9	%
Income tax expense			4.9	%			4.1	%			4.5	%			4.5	%
Net income			8.6	%			8.3	%			8.0	%			8.4	%

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URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

		October 31, 2012				January 31, 2012				October 31, 2011
ASSETS
Current assets:
Cash and cash equivalents		$	216,648			$	145,273			$	83,370
Marketable securities			146,065				89,854				46,649
Accounts receivable, net of allowance for doubtful accounts of $1,326, $1,614 and $1,046, respectively			43,913				36,673				46,830
Inventories			395,406				250,073				367,407
Prepaid expenses, deferred taxes and other current assets			64,233				75,119				64,074
Total current assets			866,265				596,992				608,330
Property and equipment, net			734,793				684,979				670,752
Marketable securities			93,767				126,913				129,146
Deferred income taxes and other assets			60,770				74,824				69,877
Total Assets		$	1,755,595			$	1,483,708			$	1,478,105
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	162,542			$	95,754			$	134,480
Accrued expenses, accrued compensation and other current liabilities			132,547				137,712				130,590
Total current liabilities			295,089				233,466				265,070
Deferred rent and other liabilities			190,648				183,974				179,229
Total Liabilities			485,737				417,440				444,299
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued			—				—				—
Common shares; $.0001 par value, 200,000,000 shares authorized, 145,869,067, 144,633,007 and 144,201,664 issued and outstanding respectively			15				15				15
Additional paid-in-capital			44,168				—				—
Retained earnings			1,232,531				1,077,765				1,041,847
Accumulated other comprehensive loss			(6,856	)			(11,512	)			(8,056	)
Total Shareholders’ Equity			1,269,858				1,066,268				1,033,806
Total Liabilities and Shareholders’ Equity		$	1,755,595			$	1,483,708			$	1,478,105