PHILADELPHIA, Nov. 12, 2009 (GLOBE 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 earnings of $62 million and $142 million for the three and nine months ended October 31, 2009, respectively. Earnings per diluted share were $0.36 for the quarter and $0.83 for the nine months ended October 31, 2009.

As stated in the Company's previous sales release on November 5, 2009, for the third quarter of fiscal 2010, net sales increased by 6% over the same quarter last year to $506 million. Comparable retail segment net sales, which include our Direct-to-consumer channels, increased 2%. Comparable store net sales at Anthropologie rose 3% while Free People and Urban Outfitters declined 13% and 5%, respectively. Comparable store net sales declined 2%. Direct-to-consumer net sales jumped 21% and Wholesale Segment net sales declined 10%.

"We are proud to announce a record breaking quarter and a solid 19% operating margin," said Glen T. Senk, Chief Executive Officer. "We continued to exhibit exceptional inventory and expense discipline while simultaneously making strategic investments in design, supply chain, technology, Direct-to-consumer initiatives and our European infrastructure. These results highlight our ability to deliver compelling merchandise and a unique shopping experience under difficult market conditions," finished Mr. Senk.

Net sales for the three and nine months were as follows:

                          Three months ended       Nine months ended
                              October 31,             October 31,
                        ----------------------  ----------------------
                           2009        2008        2009        2008
                        ----------  ----------  ----------  ----------
                            (in thousands)          (in thousands)
 Urban Outfitters
  stores                $  202,322  $  208,325  $  532,275  $  557,927
 Anthropologie stores      181,620     158,852     493,109     470,063
 Free People stores         10,486       9,701      27,014      23,319
 Terrain                     1,207       1,266       4,822       4,491
                        ----------  ----------  ----------  ----------

  Net store sales          395,635     378,144   1,057,220   1,055,800
                        ----------  ----------  ----------  ----------
 Direct-to-consumer         79,772      65,916     211,508     184,662
                        ----------  ----------  ----------  ----------
  Retail segment net
   sales                   475,407     444,060   1,268,728   1,240,462
                        ----------  ----------  ----------  ----------
 Wholesale segment net
  sales                     30,493      33,893      80,594      86,078
                        ----------  ----------  ----------  ----------
  Total net sales       $  505,900  $  477,953  $1,349,322  $1,326,540
                        ==========  ==========  ==========  ==========

For the three months ended October 31, 2009, gross profit margin increased by 65 basis points, versus the prior year's comparable quarter. This increase was primarily due to significant improvements in initial merchandise margins, which were partially offset by increased merchandise markdowns to clear seasonal inventories. For the nine months ended October 31, 2009, gross profit margin decreased by 69 basis points, versus the prior year's comparable period. This decrease was primarily due to merchandise markdowns to clear seasonal inventories and a higher rate of store occupancy expense driven by the decrease in comparable store sales. This decrease was partially offset by improvements in initial merchandise margins.

As of October 31, 2009, inventories decreased by $18 million or 8%, on a year-over-year basis as comparable store inventory declines more than offset additions to inventories for new stores. Total comparable store inventories decreased by 15% at cost and 8% in units leaving the Company well positioned for the upcoming holiday season.

For the three and nine months ended October 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 63 and 79 basis points, respectively, versus the comparable periods last year. The increases were primarily due to the deleveraging of fixed store costs related to the decline in comparable store sales as well as the accrual of additional incentive-based bonus related to our expectation to meet targeted improvements in annual performance and earnings.

During the three months ended October 31, 2009, the Company's quarterly tax rate rose to 36.1% from 35.4% in the prior year's comparable quarter. The increase was primarily due to tax rate increases in certain state municipalities enacted during the current fiscal year. Additionally, the Company produced 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's current annual effective tax rate is estimated at 37% as of October 31, 2009.

During the nine months ended October 31, 2009, the Company has opened a total of 25 new stores including: 9 Urban Outfitters stores, 12 Anthropologie stores, including our first European store, and 4 Free People stores. The Company expects to open 32 to 34 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 151 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 133 Anthropologie stores in the United States and Europe, a web site, catalog and Leifsdottir, Anthropologie's wholesale concept; 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; and 1 Terrain garden center as of October 31, 2009.

A conference call will be held today to discuss third quarter results and will be web cast at 11:00 a.m. EST at: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2536724

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           Nine Months Ended
                --------------------------  --------------------------
                        October 31,                 October 31,
                --------------------------  --------------------------
                    2009          2008          2009          2008
                    ----          ----          ----          ----

 Net sales      $    505,900  $    477,953  $  1,349,322  $  1,326,540
 Cost of sales,
  including
  certain
  buying,
  distribution
  and occupancy
  costs              295,812       282,557       808,838       785,954
                ------------  ------------  ------------  ------------
   Gross profit      210,088       195,396       540,484       540,586
 Selling,
  general and
  administra-
  tive expenses      114,327       105,017       320,162       304,345
                ------------  ------------  ------------  ------------
   Income from
    operations        95,761        90,379       220,322       236,241
 Other income,
   net                 1,817         1,437         4,847         7,102
                ------------  ------------  ------------  ------------
   Income
    before
    income
    taxes             97,578        91,816       225,169       243,343
 Income tax
  expense             35,186        32,542        82,951        84,524
                ------------  ------------  ------------  ------------
   Net income   $     62,392  $     59,274  $    142,218  $    158,819
                ============  ============  ============  ============
 Net income per
  common share:
  Basic         $       0.37  $       0.35  $       0.85  $       0.95
                ============  ============  ============  ============
  Diluted       $       0.36  $       0.35  $       0.83  $       0.93
                ============  ============  ============  ============

 Weighted
  average common
  shares and
  common share
  equivalents
  outstanding:
  Basic          168,319,514   167,030,294   167,903,283   166,619,747
                ============  ============  ============  ============
  Diluted        171,443,902   171,064,904   170,831,491   171,122,246
                ============  ============  ============  ============

 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                 58.5%         59.1%         59.9%         59.2%
                ------------  ------------  ------------  ------------
   Gross profit         41.5%         40.9%         40.1%         40.8%
 Selling,
  general and
  administra-
  tive expenses         22.6%         22.0%         23.8%         22.9%
                ------------  ------------  ------------  ------------
   Income from
    operations          18.9%         18.9%         16.3%         17.9%
 Other income
  (expense),
  net                    0.4%          0.3%          0.4%          0.5%
                ------------  ------------  ------------  ------------
   Income
    before
    income
    taxes               19.3%         19.2%         16.7%         18.4%
 Income tax
  expense                7.0%          6.8%          6.2%          6.4%
                ------------  ------------  ------------  ------------
   Net income           12.3%         12.4%         10.5%         12.0%
                ============  ============  ============  ============

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

                                    October 31, January 31, October 31,
                                       2009        2009        2008
                                    ----------  ----------  ----------

                       Assets
 Current assets:
  Cash and cash equivalents         $  202,316  $  316,035  $   71,714
  Marketable securities                216,079      49,948     127,335
  Accounts receivable, net of
   allowance for doubtful accounts
   of $1,276, $1,229 and $2,326,
   respectively                         37,592      36,390      33,822
  Inventories                          234,521     169,698     252,308
  Prepaid expenses, deferred
   taxes and other current assets       46,987      52,331      64,079
                                    ----------  ----------  ----------
 Total current assets                  737,495     624,402     549,258

 Property and equipment, net           534,260     505,407     513,639
 Marketable securities                 233,525     155,226     225,364
 Deferred income taxes and other
  assets                                35,867      43,974      40,165
                                    ----------  ----------  ----------
 Total Assets                       $1,541,147  $1,329,009  $1,328,426
                                    ==========  ==========  ==========

   Liabilities and Shareholders' Equity
 Current liabilities:
  Accounts payable                  $   93,264  $   62,955  $   82,432
  Accrued expenses, accrued
   compensation and other current
   liabilities                          88,950      78,195      93,843
                                    ----------  ----------  ----------
 Total current liabilities             182,214     141,150     176,275
                                    ----------  ----------  ----------
 Deferred rent and other
  liabilities                          143,673     134,084     130,754
                                    ----------  ----------  ----------
 Total Liabilities                     325,887     275,234     307,029
                                    ----------  ----------  ----------
 Shareholders' equity:
  Preferred shares; $.0001 par
   value, 10,000,000 shares
   authorized, none issued                  --          --          --
  Common shares; $.0001 par value,
   200,000,000 shares authorized,
   168,397,488, 167,712,088 and
   167,706,788 issued and
   outstanding, respectively                17          17          17
  Additional paid-in capital           179,642     170,166     167,752
  Retained earnings                  1,043,557     901,339     860,794
  Accumulated other comprehensive
   loss                                 (7,956)    (17,747)     (7,166)

 Total Shareholders' Equity          1,215,260   1,053,775   1,021,397
                                    ----------  ----------  ----------
 Total Liabilities and Shareholders'
  Equity                            $1,541,147  $1,329,009  $1,328,426
                                    ==========  ==========  ==========

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