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 13, 2008

 

 

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		19112-1495
(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 13, 2008, 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, 2008.

 

Item 9.01.

Financial Statements and Exhibits

 

99.1		Earnings Release dated November 13, 2008 – Operating Results for the three and nine months ended October 31, 2008.

 

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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 14, 2008		By:		/s/ John E. Kyees
				John E. Kyees
				Chief Financial Officer

 

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Exhibit Index

 

Exhibit No.		Description
EX-99.1		Earnings Release dated November 13, 2008 – Operating results for the three and nine months ended October 31, 2008.

 

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Exhibit 99.1

URBAN OUTFITTERS, INC.

Third Quarter Results

Philadelphia, PA – November 13, 2008

 

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

Urban Outfitters’ Q3 Earnings Jump 31%

PHILADELPHIA, November 13, 2008 (GLOBENEWSWIRE) – 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 $59 million and $159 million for the three and nine months ended October 31, 2008, respectively. Earnings per diluted share were $0.35 for the quarter and $0.93 for the nine months ended October 31, 2008.

As stated in the Company’s previous sales release on November 6, 2008, net sales for the third quarter of fiscal 2009 increased to $478 million or 26% over the comparable quarter last year. Comparable (‘comp’) store sales at Urban Outfitters, Anthropologie and Free People rose 17%, 2% and 4%, respectively, for a combined increase of 10%. Direct-to-consumer sales jumped 41% and Free People wholesale sales climbed 21%.

“We were pleased to announce record profit for the quarter with across-the-board improvements in gross profit, occupancy and SG&A rates, driving a 47% gain in operating margin,” said Glen T. Senk, Chief Executive Officer. “The organization executed exceptionally, and we believe our rigorous management of inventory and expenses have positioned the Company appropriately for the Holiday and Spring seasons,” finished Mr. Senk.

Net sales for the three and nine month periods were as follows:

 

		Three months ended October 31,						Nine months ended October 31,
		2008			2007			2008			2007
		(in thousands)						(in thousands)
Urban Outfitters stores		$	208,325		$	160,864		$	557,927		$	431,703
Anthropologie stores			158,852			139,980			470,063			396,137
Free People stores			9,701			4,900			23,319			10,890
Terrain			1,266			—			4,491			—
Net store sales			378,144			305,744			1,055,800			838,730
Direct-to-consumer			65,916			46,777			184,662			132,822
Retail segment net sales			444,060			352,521			1,240,462			971,552
Wholesale			33,893			26,799			86,078			70,761
Total net sales		$	477,953		$	379,320		$	1,326,540		$	1,042,313

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For the three and nine months ended October 31, 2008, gross profit margins increased by 135 and 309 basis points, respectively, versus the prior year’s comparable periods. Leverage of store occupancy costs, reductions in markdowns and improvements in initial merchandise cost helped achieve this growth for both periods.

As of October 31, 2008, inventories grew by $39.6 million or 19%, on a year-over-year basis, driven by the acquisition of inventory to stock new retail stores. Total comparable store inventories increased by 2%.

For the three and nine months ended October 31, 2008, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 139 and 85 basis points, respectively, versus the comparable periods last year. This rate improvement was led by the control and leveraging of direct store related costs helped by the increase in comparable store net sales.

The Company’s third quarter tax rate was 35.4% versus 28.5% in the comparable period last year. Management estimates an annual effective tax rate of 35% for the full fiscal year. The prior year’s unusually low annual effective tax rate was primarily impacted by the receipt of one-time federal tax incentives for work performed on the development of our new home offices.

Other income during the quarter was reduced by $2.9 million due to a one-time write-off of a certain auction rate preferred stock investment.

During the nine months ended October 31, 2008 the Company has opened a total of 41 new stores including: 18 new Urban Outfitters stores, 10 new Anthropologie stores, 12 new Free People stores and 1 new Terrain garden center. The Company expects to open approximately 47 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 140 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 118 Anthropologie stores, a web site, catalog and Leifsdottir, Anthropologie’s newly launched wholesale concept; Free People Wholesale, which sells its product to approximately 1,700 specialty stores and select department stores; 27 Free People stores, a web-site and catalog; and 1 Terrain garden center as of October 31, 2008.

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

http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2004866

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.

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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,.
		2008				2007				2008				2007
Net sales		$	477,953			$	379,320			$	1,326,540			$	1,042,313
Cost of sales, including certain buying, distribution and occupancy costs			282,557				229,382				785,954				649,733
Gross profit			195,396				149,938				540,586				392,580
Selling, general and administrative expenses			105,017				88,611				304,345				247,966
Income from operations			90,379				61,327				236,241				144,614
Other income, net			1,437				2,151				7,102				5,991
Income before income taxes			91,816				63,478				243,343				150,605
Income tax expense			32,542				18,096				84,524				43,989
Net income		$	59,274			$	45,382			$	158,819			$	106,616
Net income per common share:
Basic		$	0.35			$	0.27			$	0.95			$	0.65
Diluted		$	0.35			$	0.27			$	0.93			$	0.63
Weighted average common shares and common share equivalents outstanding:
Basic			167,030,294				165,430,768				166,619,747				165,195,871
Diluted			171,064,904				169,933,513				171,122,246				169,486,304
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			59.1	%			60.5	%			59.2	%			62.3	%
Gross profit			40.9	%			39.5	%			40.8	%			37.7	%
Selling, general and administrative expenses			22.0	%			23.3	%			22.9	%			23.8	%
Income from operations			18.9	%			16.2	%			17.9	%			13.9	%
Other income (expense), net			0.3	%			0.6	%			0.5	%			0.6	%
Income before income taxes			19.2	%			16.8	%			18.4	%			14.5	%
Income tax expense			6.8	%			4.8	%			6.4	%			4.2	%
Net income			12.4	%			12.0	%			12.0	%			10.3	%

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URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

		October 31, 2008				January 31, 2008			October 31, 2007
Assets
Current assets:
Cash and cash equivalents		$	71,714			$	105,271		$	36,393
Marketable securities			124,435				80,127			154,410
Accounts receivable, net of allowance for doubtful accounts of $2,326, $972 and $1,699, respectively			33,822				26,365			24,879
Inventories			252,308				171,925			212,696
Prepaid expenses, deferred taxes and other current assets			64,079				49,922			38,259
Total current assets			546,358				433,610			466,637
Property and equipment, net			513,639				488,889			489,434
Marketable securities			228,264				188,252			78,510
Deferred income taxes and other assets			40,165				32,040			31,621
Total Assets		$	1,328,426			$	1,142,791		$	1,066,202
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	82,432			$	74,020		$	78,845
Accrued expenses, accrued compensation and other current liabilities			87,149				93,358			81,303
Total current liabilities			169,581				167,378			160,148
Deferred rent and other liabilities			137,448				121,982			110,410
Total Liabilities			307,029				289,360			270,558
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued			—				—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 167,706,788, 166,104,615 and 165,936,965 issued and outstanding, respectively			17				17			17
Additional paid-in capital			167,752				144,204			139,637
Retained earnings			860,794				701,975			648,360
Accumulated other comprehensive income			(7,166	)			7,235			7,630
Total Shareholders’ Equity			1,021,397				853,431			795,644
Total Liabilities and Shareholders’ Equity		$	1,328,426			$	1,142,791		$	1,066,202