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Urban Outfitters Announces Record Q1 Earnings
PHILADELPHIA, May 10, 2007 (PRIME NEWSWIRE) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle consumer products company operating under the Anthropologie, Free People and Urban Outfitters brands, today announced that earnings for the three months ended April 30, 2007, increased 45% to $29.4 million or $0.17 per diluted share.
As stated in the Company's previous sales release on May 8, 2007, total sales for the first quarter increased 16% to a record $314.5 million. Comparable store sales at Anthropologie and Free People were up 2% and 8%, respectively and down 5% at our Urban Outfitters stores. Total Company comparable store sales decreased 2%. Direct-to-consumer sales jumped 30% and Free People Wholesale sales rose 12% for the quarter.
"We are encouraged by the customer reaction to our assortments so far this May, and based on these results, remain guardedly optimistic about achieving our modest financial plan in the second quarter," said Richard A. Hayne, Chairman and President.
Net sales for the periods were as follows:
Three months ended
April 30,
2007 2006
-------- --------
(in thousands)
Urban Outfitters store sales $129,908 $117,113
Anthropologie store sales 118,599 99,928
Direct-to-consumer sales 43,507 33,486
Free People sales 22,530 19,480
-------- --------
Total net sales $314,544 $270,007
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For the three months ended April 30, 2007, gross profit margins were relatively flat to last year. Total Company inventories grew by $27.4 million or 19.5% on a year-over-year basis as of April 30, 2007. The acquisition of inventory to stock new retail stores was the primary factor for this increase. Total comparable store inventories increased by 3%, but declined by 5% on a per unit basis.
For the three months ended April 30, 2007, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 20 basis points versus the comparable quarter last year. This increase was primarily caused by the effect of 'comp' store sales declines on fixed store related expenses.
The Company's tax rate improved to 22.3% or $0.03 per diluted share from 38.4% based upon receipt of certification for work performed on the development of its new offices that qualifies for certain one-time federal tax incentives and the benefit of certain reorganization efforts. Excluding the one-time federal tax incentive benefit the Company's estimated annual effective tax rate would have been approximately 36.2%, which the Company expects to maintain in FY08.
During the first quarter, the Company opened four new Urban Outfitters stores and two new Anthropologie stores or six new stores in total. The Company plans to open at least 38 new stores during fiscal year 2008.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 110 Urban Retail stores in the United States, Canada, and Europe; two Urban Outfitters web sites and an Urban catalog; 95 Anthropologie Retail; an Anthropologie catalog and web site; and Free People, the Company's wholesale division, which sells its product to approximately 1,500 specialty stores, department stores and catalogs, as well as through 8 Free People stores, a web-site and catalog.
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://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=1541702
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
April 30,
----------------------------
2007 2006
------------ ------------
Net sales $ 314,544 $ 270,007
Cost of sales, including certain
buying, distribution and occupancy
costs 201,929 173,239
------------ ------------
Gross profit 112,615 96,768
Selling, general and administrative
expenses 76,599 65,217
------------ ------------
Income from operations 36,016 31,551
Other income, net 1,802 1,412
------------ ------------
Income before income taxes 37,818 32,963
Income tax expense 8,451 12,664
------------ ------------
Net income $ 29,367 $ 20,299
============ ============
Net income per common share:
Basic $ 0.18 $ 0.12
============ ============
Diluted $ 0.17 $ 0.12
============ ============
Weighted average common shares
outstanding:
Basic 164,826,058 164,576,157
============ ============
Diluted 168,799,775 168,020,879
============ ============
PERCENT OF NET SALES
Net sales 100% 100%
Cost of sales, including certain
buying, distribution and occupancy
costs 64.2 64.2
------------ ------------
Gross profit 35.8 35.8
Selling, general and administrative
expenses 24.4 24.1
------------ ------------
Income from operations 11.4 11.7
Other income, net 0.6 0.5
------------ ------------
Income before income taxes 12.0 12.2
Income tax expense 2.7 4.7
------------ ------------
Net income 9.3% 7.5%
============ ============
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
April 30, January 31, April 30,
2007 2007 2006
-------- -------- --------
Assets
Current assets:
Cash and cash equivalents $ 31,171 $ 27,267 $ 28,106
Marketable securities 133,508 132,011 146,725
Accounts receivable, net of
allowance for doubtful
accounts of $820, $849 and
$753, respectively 22,037 20,871 23,686
Inventories 168,131 154,387 140,726
Prepaid expenses, deferred
taxes and other current
assets 33,927 31,869 38,299
-------- -------- --------
Total current assets 388,774 366,405 377,542
Property and equipment, net 455,601 445,698 335,307
Marketable securities 62,865 62,322 63,711
Deferred income taxes and other
assets 30,046 24,826 22,375
-------- -------- --------
$937,286 $899,251 $798,935
======== ======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 61,794 $ 57,934 $ 57,468
Accrued expenses, accrued
compensation and other
current liabilities 72,076 77,384 77,641
-------- -------- --------
Total current liabilities 133,870 135,318 135,109
Deferred rent and other
liabilities 91,620 88,650 78,017
-------- -------- --------
Total liabilities 225,490 223,968 213,126
-------- -------- --------
Shareholders' equity:
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 165,555,935,
164,987,463 and 165,137,317
issued and outstanding,
respectively 17 17 17
Additional paid-in capital 135,334 128,586 138,054
Retained earnings 571,111 542,396 446,489
Accumulated other
comprehensive income 5,334 4,284 1,249
-------- -------- --------
Total shareholders' equity 711,796 675,283 585,809
-------- -------- --------
$937,286 $899,251 $798,935
======== ======== ========
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
April 30,
----------------------------
2007 2006
------------ ------------
Cash flows from operating activities:
Net income $ 29,367 $ 20,299
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 16,540 11,937
Stock-based compensation expense 757 691
Loss on disposition of property
and equipment, net 105 275
Excess tax benefits from
stock-based compensation (4,223) (1,808)
Changes in assets and liabilities:
Increase in receivables (1,111) (9,330)
Increase in inventories (13,585) (146)
(Increase) decrease in prepaid
expenses and other assets (2,043) 2,007
Increase in payables, accrued
expenses and other liabilities 3,716 11,114
------------ ------------
Net cash provided by operating
activities 29,523 35,039
------------ ------------
Cash flows from investing activities:
Cash paid for property and
equipment (29,435) (55,692)
Purchases of marketable securities (33,013) (35,607)
Sales and maturities of marketable
securities 30,675 31,061
------------ ------------
Net cash used in investing activities (31,773) (60,238)
------------ ------------
Cash flows from financing activities:
Exercise of stock options 1,767 1,410
Excess tax benefits from
stock-based compensation 4,223 1,808
------------ ------------
Net cash provided by financing
activities 5,990 3,218
------------ ------------
Effect of exchange rate changes on
cash and cash equivalents 164 175
------------ ------------
Increase (decrease) in cash and cash
equivalents 3,904 (21,806)
Cash and cash equivalents at beginning
of period 27,267 49,912
------------ ------------
Cash and cash equivalents at end of
period $ 31,171 $ 28,106
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CONTACT: Urban Outfitters, Inc.
John Kyees, Chief Financial Officer
(215) 454-5500
