<< Back
Urban Outfitters Q1 Earnings Surge 45 Percent
PHILADELPHIA, May 15, 2008 (PRIME 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 that for the three months ended April 30, 2008, income from operations increased 75% to $62.9 million and generated earnings of $0.25 per diluted share.
As stated in the Company's previous sales release on May 8, 2008, total Company sales for the first quarter increased 25% to a record $394.3 million. Comparable ('comp') store sales at Anthropologie, Free People and Urban Outfitters rose 10%, 19% and 10%, respectively, for a combined 10% increase. Direct-to-consumer sales jumped 34% and Free People wholesale sales increased 22%.
"We produced exceptional results during the quarter: 'comp' store sales jumped 10%; gross profit rose 41%, or over 400 basis points; operating margin improved 75% to 16% of net sales; and we opened 12 new stores, including the launch of our newest concept, Terrain," said Glen T. Senk, Chief Executive Officer. "I want to congratulate our teams for delivering such an excellent performance," finished Mr. Senk.
Net sales for the three month periods were as follows:
Three months ended
April 30,
2008 2007
---- ----
(in thousands)
Urban Outfitters stores $159,790 $129,908
Anthropologie stores 145,596 118,599
Free People stores 5,859 2,690
Terrain stores 617 --
-------- --------
Total store sales 311,862 251,197
Direct-to-consumer 58,248 43,507
-------- --------
Total retail segment 370,110 294,704
Wholesale 24,182 19,840
-------- --------
Total net sales $394,292 $314,544
======== ========
For the three months ended April 30, 2008, gross profit margins increased by 444 basis points versus the comparable period last year. Reductions in merchandise markdowns, followed by improvement to initial merchandise cost and leveraging of store occupancy costs helped achieve the margin growth. As of April 30, 2008, inventories grew by $23.2 million or 13.8%, on a year-over-year basis, driven by the acquisition of inventory to stock new retail stores. Total comparable store inventories decreased by 3%.
During the first quarter, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 7 basis points versus the comparable period last year. This decrease was primarily due to leveraging of direct store controllable costs helped by the increase in 'comp' store net sales, which more than offset certain one-time pre-opening expenses related to the Terrain store launch and development expenses of the new Anthropologie wholesale collection, Leiffsdottir and additional bonus accruals.
Earnings per share increased 47% to $0.25 per diluted share for the three months ended April 30, 2008 and the Company's tax rate rose to 35.7%. Management expects the tax rate to remain fairly consistent for the balance of the fiscal year. The prior year's tax rate was impacted by the receipt of one-time federal tax incentives for work performed on the development of our new home offices. Excluding these one-time federal tax incentives, the Company's estimated tax rate would have been approximately 36.2% and earnings per diluted share would have been $0.14 for the comparable period last year.
During the three months ended April 30, 2008, the Company opened a total of 12 new stores including: 7 new Urban Outfitters stores, 1 new Anthropologie store, 3 new Free People stores and our first Terrain garden center. Terrain is the Company's fourth concept which launched during the first quarter of this fiscal year, opening its retail garden center and cafe to the public in late April on the site of Styer's Nurseries in Concordville, PA. The center offers a wide variety of indoor and outdoor plant material, an eclectic assortment of garden and outdoor living supplies, a cafe and a complete range of landscape and design services. The Company plans to open approximately 45 new stores during fiscal year 2009.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 129 Urban Retail stores in the United States, Canada, and Europe; two web sites and a catalog; 109 Anthropologie stores; a catalog and web site; Free People, the Company's wholesale division, which sells its product to approximately 1,700 specialty and department stores as well as through 18 Free People stores, a web-site and catalog and one Terrain garden center as of April 30, 2008.
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=1832753
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,
--------------------------
2008 2007
---- ----
Net sales $ 394,292 $ 314,544
Cost of sales, including certain buying,
distribution and occupancy costs 235,612 201,929
------------ ------------
Gross profit 158,680 112,615
Selling, general and administrative
expenses 95,738 76,599
------------ ------------
Income from operations 62,942 36,016
Other income, net 3,220 1,802
------------ ------------
Income before income taxes 66,162 37,818
Income tax expense 23,605 8,451
------------ ------------
Net income $ 42,557 $ 29,367
============ ============
Net income per common share:
Basic $ 0.26 $ 0.18
============ ============
Diluted $ 0.25 $ 0.17
============ ============
Weighted average common shares
outstanding:
Basic 166,119,099 164,826,058
============ ============
Diluted 170,603,420 168,799,775
============ ============
PERCENT OF NET SALES
Net sales 100% 100%
Cost of sales, including certain buying,
distribution and occupancy costs 59.8 64.2
------------ ------------
Gross profit 40.2 35.8
Selling, general and administrative
expenses 24.2 24.4
------------ ------------
Income from operations 16.0 11.4
Other income, net 0.8 0.6
------------ ------------
Income before income taxes 16.8 12.0
Income tax expense 6.0 2.7
------------ ------------
Net income 10.8% 9.3%
============ ============
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
April 30, January 31, April 30,
2008 2008 2007
---------- ---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 164,030 $ 105,271 $ 31,171
Marketable securities 55,101 80,127 133,508
Accounts receivable, net of
allowance for doubtful
accounts of $1,522, $972 and
$820, respectively 25,593 26,365 22,037
Inventories 191,287 171,925 168,131
Prepaid expenses, deferred
taxes and other current
assets 46,228 49,922 33,927
---------- ---------- ----------
Total current assets 482,239 433,610 388,774
Property and equipment, net 498,789 488,889 455,601
Marketable securities 187,549 188,252 62,865
Deferred income taxes and other
assets 36,708 32,040 30,046
---------- ---------- ----------
Total Assets $1,205,285 $1,142,791 $ 937,286
========== ========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 81,112 $ 74,020 $ 61,794
Accrued expenses, accrued
compensation and other
current liabilities 92,312 93,358 72,076
---------- ---------- ----------
Total current liabilities 173,424 167,378 133,870
Deferred rent and other
liabilities 123,469 121,982 91,620
---------- ---------- ----------
Total Liabilities 296,893 289,360 225,490
---------- ---------- ----------
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares
authorized, none issued -- -- --
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 166,967,614,
166,104,615 and 165,555,935
issued and outstanding,
respectively 17 17 17
Additional paid-in capital 157,490 144,204 135,334
Retained earnings 744,532 701,975 571,111
Accumulated other
comprehensive income 6,353 7,235 5,334
---------- ---------- ----------
Total Shareholders' Equity 908,392 853,431 711,796
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,205,285 $1,142,791 $ 937,286
========== ========== ==========
CONTACT: Urban Outfitters, Inc.John Kyees, Chief Financial Officer
(215) 454-5500
