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Urban Outfitters Reports Q4 Earnings Jump 92%

PHILADELPHIA, Mar 4, 2010 (GlobeNewswire via COMTEX) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, Leifsdottir, Terrain and Urban Outfitters brands, today announced record earnings of $78 million and $220 million for the fourth quarter and year ended January 31, 2010, respectively. Earnings per diluted share were $0.45 for the quarter and $1.28 for the year.

As stated in the Company's previous sales release on February 4, 2010, total Company sales for the fourth quarter reached a record $589 million, an increase of 16% over the comparable quarter last year. Comparable retail segment sales, which include our direct-to-consumer channels, increased 9% for the quarter. Comparable store sales rose 10% and 11% at Anthropologie and Free People, respectively and were flat at Urban Outfitters, for a combined comparable store sales increase of 4%. Direct-to-consumer sales surged 28% reflecting strong growth across all brands and wholesale sales continued to improve as compared to previous quarterly trends, down 2% versus the same quarter last year. Total Company net sales for the year ended January 31, 2010 increased 6%, to a record $1.9 billion.

"We are delighted to announce a series of record-breaking results for the quarter and year, including quarterly earnings growth of 92% and a quarterly operating profit of 20%," said Glen T. Senk, Chief Executive Officer. "The sales and profit trend improved in each quarter throughout 2009, and our current February 'comp' sales performance exceeded our fourth quarter 'comp'. Our team continued to exhibit exceptional discipline in managing expenses while simultaneously making strategic investments in design, the supply chain, technology, International, Direct-to-consumer and our newest businesses, Terrain and Leifsdottir," continued Mr. Senk.



Net sales for the periods were as follows:

                          Three months ended     Twelve months ended
                              January 31,             January 31,
                        ----------------------  ----------------------
                           2010        2009        2010        2009
                        ----------  ----------  ----------  ----------
                             (in thousands)         (in thousands)

 Urban Outfitters
  stores                $  227,858  $  213,435  $  760,133  $  771,362
 Anthropologie stores      211,740     172,098     704,849     642,161
 Free People stores         11,738       9,588      38,752      32,907
 Terrain                     1,438       1,165       6,260       5,656
                        ----------  ----------  ----------  ----------
   Store net sales         452,774     396,286   1,509,994   1,452,086
                        ----------  ----------  ----------  ----------
 Direct-to-consumer        112,231      87,810     323,739     272,472
                        ----------  ----------  ----------  ----------
   Retail segment net
    sales                  565,005     484,096   1,833,733   1,724,558
                        ----------  ----------  ----------  ----------
 Wholesale                  23,488      23,982     104,082     110,060
                        ----------  ----------  ----------  ----------
   Total net sales      $  588,493  $  508,078  $1,937,815  $1,834,618
                        ==========  ==========  ==========  ==========

For the fourth quarter ended January 31, 2010, gross profit margin improved by 771 basis points, versus the prior year's comparable quarter. The increase was primarily due to significant improvements in initial merchandise margins and a reduction in merchandise markdowns. For the year ended January 31, 2010, gross profit margin increased by 168 basis points versus the prior comparable year. This increase was primarily due to improvements in initial merchandise margins that were partially offset by a higher rate of store occupancy expense driven by the decrease in comparable store sales.

As of January 31, 2010, inventories increased by $16.4 million or 9.7% on a year-over-year basis. This increase was primarily due to the acquisition of inventory to stock new retail stores. For the quarter ended January 31, 2010, total comparable store inventories decreased by 3% at cost.

For the fourth quarter ended January 31, 2010, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by one basis point versus the prior year's comparable quarter. This reduction was primarily driven by cost control across all areas of the business, with the most impact coming from direct store related expenses. These reductions were partially offset by an increase in incentive based compensation related to meeting annual performance targets. For the year ended January 31, 2010, selling, general and administrative expenses expressed as a percentage of net sales increased by 51 basis points versus the prior comparable year. This increase was related to an increase in incentive based compensation partially offset by cost control across all other areas of the business with direct store controllable representing the most significant savings.

The Company's annual effective tax rate for the year ended January 31, 2010 was 36.2% versus 35.6% for the prior year. The increase in the current year rate is primarily attributable to 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 estimates that next year's tax rate will be favorable to this year's annual rate and more comparable with the January 31, 2010 fourth quarter effective rate of 35.9%. The Company expects a favorable change in next year's rate due in part to an increase in income generated from foreign operations.

During the year ended January 31, 2010, the Company opened a total of 33 new stores including: 13 Urban Outfitters stores, 16 Anthropologie stores including our first Anthropologie store in Europe, and 4 Free People stores. The Company plans to open approximately 45 new stores during Fiscal 2011.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 155 Urban Outfitters stores in the United States, Canada, and Europe; 2 websites and a catalog; 137 Anthropologie stores in the United States, Canada and Europe, a web site and a catalog; Free People wholesale which sells its product to approximately 1,400 specialty stores and select department stores; 34 Free People stores, a web site and catalog; Leifsdottir wholesale, which sells its product to approximately 65 specialty and select department stores; and one Terrain garden center as of January 31, 2010.

A conference call will be held today to discuss fourth quarter results and will be web cast at 11:00 a.m. EST on: http://phx.corporate-ir.net/playerlink.zhtml?c=115825&s=wm&e=2729530

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)


                          Quarter Ended           Fiscal Year Ended
                          -------------           -----------------
                           January 31,               January  31,
                           -----------               ------------
                        2010         2009         2010         2009
                        ----         ----         ----         ----

 Net sales          $   588,493  $   508,078  $ 1,937,815  $ 1,834,618
 Cost of sales,
  including
  certain buying,
  distribution
  and occupancy
  costs                 342,832      335,186    1,151,670    1,121,140
                    -----------  -----------  -----------  -----------
     Gross profit       245,661      172,892      786,145      713,478
 Selling, general
  and
  administrative
  expenses              126,999      109,698      447,161      414,043
                    -----------  -----------  -----------  -----------
     Income from
      operations        118,662       63,194      338,984      299,435
 Other income, net          575        2,953        5,422       10,055
                    -----------  -----------  -----------  -----------
     Income before
      income taxes      119,237       66,147      344,406      309,490
 Income tax
  expense                41,562       25,602      124,513      110,126
                    -----------  -----------  -----------  -----------
     Net income     $    77,675  $    40,545  $   219,893  $   199,364
                    ===========  ===========  ===========  ===========

 Net income per
  common share:
   Basic            $      0.46  $      0.24  $      1.31  $      1.20
                    ===========  ===========  ===========  ===========
   Diluted          $      0.45  $      0.24  $      1.28  $      1.17
                    ===========  ===========  ===========  ===========

 Weighted average
  common shares
  and common share
  equivalents
  outstanding:
   Basic            168,499,260  167,309,239  168,053,502  166,793,062
                    ===========  ===========  ===========  ===========
   Diluted          172,421,607  170,071,913  171,230,245  170,860,605
                    ===========  ===========  ===========  ===========


 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                   58.3%        66.0%        59.4%        61.1%
                          -----        -----        -----        -----
     Gross profit         41.7%        34.0%        40.6%        38.9%
 Selling, general
  and
  administrative
  expenses                21.5%        21.6%        23.1%        22.6%
                          -----        -----        -----        -----
     Income from
      operations          20.2%        12.4%        17.5%        16.3%
 Other income, net         0.1%         0.6%         0.3%         0.6%
                          -----        -----        -----        -----
     Income before
      income taxes        20.3%        13.0%        17.8%        16.9%
 Income tax
  expense                  7.1%         5.0%         6.4%         6.0%
                          -----        -----        -----        -----
     Net income           13.2%         8.0%        11.4%        10.9%
                          =====        =====        =====        =====



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

                                              January 31,  January 31,
                                                 2010          2009
                                              -----------  -----------

                Assets
 Current assets:
   Cash and cash equivalents                  $   159,024  $   316,035
   Marketable securities                          342,512       49,948
   Accounts receivable, net of allowance
    for doubtful accounts of $1,284 and
    $1,229, respectively                           38,405       36,390
   Inventories                                    186,130      169,698
   Prepaid expenses, deferred taxes and
    other current assets                           80,142       52,331
                                              -----------  -----------
 Total current assets                             806,213      624,402

 Property and equipment, net                      539,961      505,407
 Marketable securities                            243,445      155,226
 Deferred income taxes and other assets            46,474       43,974
                                              -----------  -----------
 Total Assets                                 $ 1,636,093  $ 1,329,009
                                              ===========  ===========

     Liabilities and Shareholders' Equity
 Current liabilities:
   Accounts payable                           $    78,041  $    62,955
   Accrued expenses, accrued compensation
    and other current liabilities                 110,508       78,195
                                              -----------  -----------
 Total current liabilities                        188,549      141,150

 Deferred rent and other liabilities              150,769      134,084
                                              -----------  -----------
 Total Liabilities                                339,318      275,234
                                              -----------  -----------

 Shareholders' equity:
   Preferred shares; $.0001 par
    value, 10,000,000 shares authorized,
    none issued                                        --           --
   Common shares;  $.0001 par value,
    200,000,000 shares authorized,
    168,558,371 and 167,712,088 issued and
    outstanding, respectively                          17           17
   Additional paid-in-capital                     184,620      170,166
   Retained earnings                            1,121,232      901,339
   Accumulated other comprehensive loss            (9,094)     (17,747)
                                              -----------  -----------
 Total Shareholders' Equity                     1,296,775    1,053,775
                                              -----------  -----------
 Total Liabilities and Shareholders' Equity   $ 1,636,093  $ 1,329,009
                                              ===========  ===========

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

SOURCE: Urban Outfitters, Inc.

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