PHILADELPHIA, Aug. 13, 2009 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, Terrain and Urban Outfitters brands today announced earnings of $49 million and $80 million for the three and six months ended July 31, 2009, respectively. Earnings per diluted share were $0.29 for the quarter and $0.47 for the six months ended July 31, 2009.

As stated in the Company's previous sales release on August 6, 2009, for the second quarter of fiscal 2010, total Company net sales increased by 1% over the same quarter last year to $459 million. Comparable retail segment net sales, which include our direct-to-consumer channels, decreased 3%. Comparable store net sales decreased 6% with declines at Anthropologie, Free People and Urban Outfitters of 4%, 16%, and 8%, respectively. Direct-to-consumer net sales rose 17% and wholesale segment net sales declined 7%.

"The Company produced a 17% operating profit which we believe is admirable considering the current economic climate," said Glen T. Senk, Chief Executive Officer. "By deploying exceptional inventory and expense discipline, our team has adeptly driven profit in the face of challenging fundamentals. I am confident in the group's ability to continue to improve on this performance and exploit all current and emerging growth opportunities in our business," finished Mr. Senk.

Net sales for the three and six months were as follows:

                            Three months ended     Six months ended
                                 July 31,              July 31,
                            -------------------   -------------------
                              2009       2008       2009       2008
                            --------   --------   --------   --------
                              (in thousands)        (in thousands)
 Urban Outfitters stores    $177,121   $189,812   $329,953   $349,602
 Anthropologie stores        173,146    165,615    311,489    311,211
 Free People stores            9,215      7,759     16,528     13,618
 Terrain                       2,312      2,608      3,615      3,225
                            --------   --------   --------   --------
  Net store sales            361,794    365,794    661,585    677,656
                            --------   --------   --------   --------
 Direct-to-consumer           70,926     60,498    131,736    118,746
                            --------   --------   --------   --------
  Retail segment net sales   432,720    426,292    793,321    796,402
                            --------   --------   --------   --------
 Wholesale Segment net
  sales                       25,906     28,003     50,101     52,185
                            --------   --------   --------   --------
 Total net sales            $458,626   $454,295   $843,422   $848,587
                            ========   ========   ========   ========

For the three and six months ended July 31, 2009, gross profit margins decreased by 26 and 151 basis points, respectively, versus the prior year's comparable periods. These decreases were primarily due to merchandise markdowns to clear seasonal inventories and a higher rate of store occupancy expense driven by the decrease in comparable store sales. These decreases more than offset considerable improvements in initial merchandise margins.

As of July 31, 2009, inventories grew by $6 million or 3%, on a year-over-year basis, driven by the acquisition of inventory to stock new retail stores. Total comparable store inventories decreased by 7%.

For the three and six months ended July 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 89 and 91 basis points, respectively, versus the comparable periods last year. These increases were primarily due to the deleveraging of fixed store costs related to the decline in comparable store sales and a one-time site development expense related to a prospective Terrain location.

During the three months ended July 31, 2009, the Company's quarterly tax rate rose to 38.3% from 33.2% in the prior year's comparable quarter. The increase was primarily due to tax rate hikes at certain state municipalities enacted during the second quarter and retroactively effective for the entire current fiscal year. Additionally, the Company produced a lower proportion of tax free interest income due to a strategic shift to a mix of lower risk securities versus the prior year's holdings. The Company expects the current annual effective tax rate to remain consistent during the remainder of the year.

During the six months ended July 31, 2009, the Company has opened a total of 15 new stores including: 6 Urban Outfitters stores, 6 Anthropologie stores and 3 Free People stores. The Company expects to open 34 to 36 new stores during the full fiscal year.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 148 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 127 Anthropologie stores, a web site, catalog and Leifsdottir, Anthropologie's recently launched wholesale concept; Free People Wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 33 Free People stores, a web-site and catalog; and 1 Terrain garden center as of July 31, 2009.

A conference call will be held today to discuss second quarter results and will be web cast at 11:00 a.m. EDT at:

http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2330800

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

                       Three Months Ended         Six Months Ended
                       ------------------         ----------------
                            July 31,                  July 31,
                            --------                  --------
                       2009         2008         2009         2008
                       ----         ----         ----         ----

 Net sales        $    458,626 $    454,295 $    843,422 $    848,587
 Cost of sales,
  including
  certain
  buying,
  distribution
  and occupancy
   costs               271,535      267,785      513,021      503,397
                  ------------ ------------ ------------ ------------
    Gross profit       187,091      186,510      330,401      345,190
 Selling, general
  and
  administrative
  expenses             108,650      103,590      205,840      199,328
                  ------------ ------------ ------------ ------------
    Income from
     operations         78,441       82,920      124,561      145,862
 Other income,
  net                      939        2,445        3,030        5,665
                  ------------ ------------ ------------ ------------
    Income before
     income taxes       79,380       85,365      127,591      151,527
 Income tax
  expense               30,359       28,377       47,765       51,982
                  ------------ ------------ ------------ ------------
    Net income    $     49,021 $     56,988 $     79,826 $     99,545
                  ============ ============ ============ ============
 Net income per
  common share:
  Basic           $       0.29 $       0.34 $       0.48 $       0.60
                  ============ ============ ============ ============
  Diluted         $       0.29 $       0.33 $       0.47 $       0.58
                  ============ ============ ============ ============

 Weighted average
  common shares
  and common share
  equivalents
  outstanding:
   Basic           167,919,873  166,698,963  167,691,718  166,412,217
                  ============ ============ ============ ============
   Diluted         170,719,274  171,687,530  170,521,836  171,148,661
                  ============ ============ ============ ============


 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                   59.2%        58.9%        60.8%        59.3%
                          -----        -----        -----        -----
     Gross profit         40.8%        41.1%        39.2%        40.7%
 Selling, general
  and
  administrative
  expenses                23.7%        22.8%        24.4%        23.5%
                          -----        -----        -----        -----
     Income from
      operations          17.1%        18.3%        14.8%        17.2%
 Other income
  (expense), net           0.2%         0.5%         0.4%         0.7%
                          -----        -----        -----        -----
     Income before
      income taxes        17.3%        18.8%        15.2%        17.9%
 Income tax expense        6.6%         6.2%         5.7%         6.1%
                          -----        -----        -----        -----
     Net income           10.7%        12.6%         9.5%        11.8%
                          =====        =====        =====        =====

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

                                 July 31,    January 31,   July 31,
                                   2009         2009         2008
                                -----------  -----------  -----------
          Assets

 Current assets:
  Cash and cash equivalents     $   152,885  $   316,035  $   160,391
  Marketable securities             135,875       49,948       76,905
  Accounts receivable, net of
   allowance for doubtful
   accounts of $1,368, $1,229
   and $2,395, respectively          32,039       36,390       32,468
  Inventories                       217,050      169,698      211,205
  Prepaid expenses, deferred
   taxes and other current
   assets                            46,005       52,331       47,762
                                -----------  -----------  -----------
 Total current assets               583,854      624,402      528,731

 Property and equipment, net        528,295      505,407      507,399
 Marketable securities              294,519      155,226      191,129
 Deferred income taxes and
  other assets                       38,553       43,974       41,130
                                -----------  -----------  -----------
 Total Assets                   $ 1,445,221  $ 1,329,009  $ 1,268,389
                                ===========  ===========  ===========

 Liabilities and Shareholders'
  Equity

 Current liabilities:
  Accounts payable              $    85,336  $    62,955  $    88,521
  Accrued expenses, accrued
   compensation and other
   current liabilities               74,764       78,195       83,478
                                -----------  -----------  -----------
 Total current liabilities          160,100      141,150      171,999

 Deferred rent and other
  liabilities                       136,906      134,084      128,252
                                -----------  -----------  -----------
 Total Liabilities                  297,006      275,234      300,251
                                -----------  -----------  -----------

 Shareholders' equity:
  Preferred shares; $.0001 par
   value, 10,000,000 shares
   authorized, none issued               --           --           --
  Common shares; $.0001 par
   value, 200,000,000 shares
   authorized, 168,200,288,
   167,712,088 and 167,164,738
   issued and outstanding,
   respectively                          17           17           17
  Additional paid-in capital        175,839      170,166      160,615
  Retained earnings                 981,165      901,339      801,520
  Accumulated other
   comprehensive (loss) income       (8,806)     (17,747)       5,986
                                -----------  -----------  -----------
 Total Shareholders' Equity       1,148,215    1,053,775      968,138
                                -----------  -----------  -----------
 Total Liabilities and
  Shareholders' Equity          $ 1,445,221  $ 1,329,009  $ 1,268,389
                                ===========  ===========  ===========

CONTACT:  Urban Outfitters, Inc.
          John Kyees, Chief Financial Officer
          (215) 454-5500