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Urban Outfitters Reports Q1 Results

PHILADELPHIA, May 16, 2011 (GlobeNewswire via COMTEX) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands, today announced net income of $39 million or earnings per diluted share of $0.23 for the three months ended April 30, 2011.

Total Company net sales rose by 9% over the same quarter last year to $524 million. Comparable retail segment net sales, which include our direct-to-consumer channels, decreased 1% for the quarter while comparable store net sales decreased 5% for the quarter. Comparable retail segment net sales at Free People and Urban Outfitters increased 30%, and 1%, respectively, while comparable retail segment net sales at Anthropologie decreased 6% for the quarter. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 22% for the quarter.

"I am confident that we are on the right course to bring our business back to its high standards," said Chief Executive Officer, Glen T. Senk. "I am encouraged by the progress each of the brands have made and anticipate improvements to occur gradually during the balance of this fiscal year," finished Senk.

Net sales by brand and channel for the three month periods were as follows:

                        Three Months Ended
                            April 30,

                          (in thousands)
                       --------------------

                          2011       2010
                       ----------  --------
  Net sales by brand     $235,328  $210,503
  Urban Outfitters
  Anthropologie           228,548   224,677
  Free People              51,751    40,569

  Other                     8,392     4,212
                       ----------  --------

  Total Company          $524,019  $479,961
                       ==========  ========

  Net sales by
   channel
  Retail Stores          $391,164  $368,541

  Direct-to-consumer      102,298    86,267
                       ----------  --------

    Retail Segment        493,462   454,808
                       ----------  --------

  Wholesale Segment        30,557    25,153
                       ----------  --------

  Total Company          $524,019  $479,961
                       ==========  ========

For the first quarter ended April 30, 2011, gross profit margin percentage declined by 493 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving inventory primarily associated with women's apparel at both Anthropologie and Urban Outfitters and a non-recurring loss associated with the sell-off of Leifsdottir wholesale inventories during the current quarter.

As of April 30, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 6% at cost while total comparable store inventory increased by 1% at cost. Total inventories grew by $42 million or 19%, on a year-over-year basis, primarily due to the acquisition of inventory to stock new retail stores, as well as, inventory to support growth in the direct-to-consumer channel.

For the first quarter ended April 30, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 96 basis points. This increase was primarily due to the deleveraging of store operating costs as a result of the negative comparable store net sales for the three months ended April 30, 2011. Additionally contributing to the deleverage in the quarter were investments in new technology, non-recurring transition costs associated with Leifsdottir and planned transition costs for our new distribution and fulfillment facilities in Europe.

On November 16, 2010, our Board of Directors approved a share repurchase program that authorized the repurchase of 10 million common shares subject to prevailing market conditions. During the quarter ended April 30, 2011, the Company repurchased and retired 4.8 million common shares for approximately $149 million. These repurchases completed the Company's 2006 share repurchase program leaving 5.7 million shares available for repurchase under the 2010 share repurchase program.

During the three months ended April 30, 2011, the Company opened a total of 10 new stores including: 5 Free People stores, 2 Urban Outfitters stores and 3 Anthropologie stores.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 178 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 156 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; 47 Free People stores, catalogs and website, 1 Terrain garden center and website and a BHLDN website as of April 30, 2011.

Management's first quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss first quarter results and will be web cast at 5:00 pm. EDT at: http://investor.urbn.com/phoenix.zhtml?c=115825&p=irol-irhome

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, and continuation of lowered levels of consumer spending resulting from the continuing worldwide economic downturn, 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, 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 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.

                    (Tables follow)



                 URBAN OUTFITTERS, INC.
       Condensed Consolidated Statements of Income
     (in thousands, except share and per share data)
                       (unaudited)




                                  Three Months Ended
                               ------------------------

                                      April 30,
                               ------------------------

                                  2011         2010
                               -----------  -----------

  Net sales                       $524,019     $479,961
  Cost of sales, including
   certain buying,
   distribution and occupancy
   costs                           330,654      279,175
                               -----------  -----------
     Gross profit                  193,365      200,786
  Selling, general and
   administrative expenses         134,529      118,575
                               -----------  -----------
     Income from operations         58,836       82,211

  Other income, net                  1,365          423
                               -----------  -----------
     Income before income
      taxes                         60,201       82,634

  Income tax expense                21,577       29,677
                               -----------  -----------

     Net income                    $38,624      $52,957
                               ===========  ===========

  Net income per common
   share:

     Basic                           $0.24        $0.31
                               ===========  ===========

     Diluted                         $0.23        $0.31
                               ===========  ===========

  Weighted average common
   shares and common share
   equivalents outstanding:

     Basic                     162,407,330  168,852,072
                               ===========  ===========

     Diluted                   165,293,594  172,819,037
                               ===========  ===========


  AS A PERCENT OF NET SALES
  Net sales                         100.0%       100.0%
  Cost of sales, including
   certain buying,
   distribution and occupancy
   costs                              63.1         58.2
                               -----------  -----------
     Gross profit                     36.9         41.8
  Selling, general and
   administrative expenses            25.7         24.7
                               -----------  -----------
     Income from operations           11.2         17.1

  Other income, net                    0.3          0.1
                               -----------  -----------
     Income before income
      taxes                           11.5         17.2

  Income tax expense                   4.1          6.2
                               -----------  -----------

     Net income                       7.4%        11.0%
                               ===========  ===========

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



                                                 January
                                     April 30,     31,       April 30,
                                       2011        2011        2010
                                    ----------  ----------  ----------

               Assets
  Current assets:
     Cash and cash equivalents        $242,087    $340,257    $259,348
     Marketable securities              68,688     116,420     323,910
     Accounts receivable, net of
      allowance for doubtful
      accounts of $1,078, 1,015
      and $1,220, respectively          46,539      36,502      35,448
     Inventories                       264,278     229,561     221,984
     Prepaid expenses, deferred
      taxes and other current
      assets                            77,826      81,237      79,840
                                    ----------  ----------  ----------
  Total current assets                 699,418     803,977     920,530

  Property and equipment, net          601,249     586,346     548,575
  Marketable securities                333,946     351,988     189,467
  Deferred income taxes and other
   assets                               57,774      52,010      49,606
                                    ----------  ----------  ----------

  Total Assets                      $1,692,387  $1,794,321  $1,708,178
                                    ==========  ==========  ==========

   Liabilities and Shareholders'
                Equity
  Current liabilities:
     Accounts payable                 $109,444     $82,904    $100,439
     Accrued expenses, accrued
      compensation and other
      current liabilities              100,690     128,120      96,738
                                    ----------  ----------  ----------
  Total current liabilities            210,134     211,024     197,177

  Deferred rent and other
   liabilities                         169,773     171,749     150,855
                                    ----------  ----------  ----------

  Total Liabilities                    379,907     382,773     348,032
                                    ----------  ----------  ----------

  Shareholders' equity:
     Preferred shares; $.0001 par
      value, 10,000,000 shares
      authorized, none issued               --          --          --
     Common shares; $.0001 par
      value, 200,000,000 shares
      authorized, 159,667,925,
      164,413,427 and 169,376,345
      issued and outstanding
      respectively                          16          17          17
     Additional paid-in-capital             --      27,603     198,702
     Retained earnings               1,317,037   1,394,190   1,174,189
     Accumulated other
      comprehensive loss               (4,573)    (10,262)    (12,762)
                                    ----------  ----------  ----------

  Total Shareholders' Equity         1,312,480   1,411,548   1,360,146
                                    ----------  ----------  ----------
  Total Liabilities and
   Shareholders' Equity             $1,692,387  $1,794,321  $1,708,178
                                    ==========  ==========  ==========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Urban Outfitters, Inc.

CONTACT: Oona McCullough
Director of Investor Relations
(215) 454-4806