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Urban Outfitters Reports Record Q2 Sales
PHILADELPHIA, Aug 15, 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 $57 million and $95 million for the three and six months ended July 31, 2011, respectively. Earnings per diluted share were $0.35 for the quarter and $0.59 for the six months ended July 31, 2011.
Total Company net sales rose by 10% over the same quarter last year to $609 million. Comparable retail segment net sales, which include our direct-to-consumer channels, improved 1% for the quarter while comparable store net sales decreased 2% for the quarter. Comparable retail segment net sales at Free People and Urban Outfitters increased 18%, and 1%, respectively while comparable retail segment net sales at Anthropologie were flat for the quarter. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 7% for the quarter.
"We remain confident in our strategies and believe we made great executional progress during the quarter," said Chief Executive Officer, Glen T. Senk. "We anticipate gradual improvements in our comparable sales over the balance of the fiscal year and into Spring 2012," Mr. Senk finished.
Net sales by brand and channel for the three and six month periods were as follows:
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- ----------------------------
Net sales by brand 2011 2010 2011 2010
--------- ----------- ----------- ------------
Urban Outfitters $ 272,173 $ 243,232 $ 507,501 $ 453,737
Anthropologie 272,639 256,353 501,187 481,032
Free People 58,707 46,876 110,458 87,444
Other 5,662 5,698 14,054 9,907
--------- ----------- ----------- ------------
Total Company $ 609,181 $ 552,159 $ 1,133,200 $ 1,032,120
========= =========== ----------- ============
Net sales by channel
Retail Stores $ 464,672 $ 425,655 $ 855,836 $ 794,196
Direct-to-consumer 112,610 96,571 214,908 182,838
--------- ----------- ----------- ------------
Retail Segment 577,282 522,226 1,070,744 977,034
--------- ----------- ----------- ------------
Wholesale Segment 31,899 29,933 62,456 55,086
--------- ----------- ----------- ------------
Total Company $ 609,181 $ 552,159 $ 1,133,200 $ 1,032,120
========= =========== =========== ============
For the three months ended July 31, 2011, gross profit margin percentage declined by 459 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving women's apparel inventory at both Anthropologie and Urban Outfitters, as well as occupancy deleverage caused by negative comparable store sales. For the six months ended July 31, 2011, gross profit margin percentage declined by 474 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns noted above.
As of July 31, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 12% at cost while total comparable store inventory increased by 9% at cost. Total inventories grew by $60 million or 25%, on a year-over-year basis. Approximately half of the dollar increase was due to non comparable receipts versus the prior year, specifically; early receipts in the final week of July and higher in-transit, fabric and BHLDN inventories. The balance of the increase is driven by the acquisition of inventory to stock new retail stores and to support Direct-to-Consumer growth.
For the three months ended July 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 32 basis points versus the prior year comparable period due primarily to ecommerce and related catalog investments. Investments in both technology and in our distribution and fulfillment facilities in Europe also contributed to the increase. For the six months ended July 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 62 basis points versus the prior year comparable period primarily due to ecommerce and related catalog investments.
On November 16, 2010, our Board of Directors approved a share repurchase program that authorized the repurchase of 10.0 million common shares subject to prevailing market conditions. During the three months ended July 31, 2011, the Company repurchased and retired 2.3 million common shares for approximately $67 million. During the six months ended July 31, 2011, the Company repurchased and retired 7.2 million common shares for approximately $216 million. As of July 31, 2011, 3.3 million common shares were available for repurchase under the stock repurchase program.
During the six months ended July 31, 2011, the Company opened a total of 20 new stores including: 9 Free People stores, 7 Anthropologie stores and 4 Urban Outfitters stores.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 180 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 160 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; 51 Free People stores, catalogs and website, 1 Terrain garden center and website and a BHLDN website as of July 31, 2011.
Management's second quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss second 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.
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
------------------------ ------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net sales $609,181 $552,159 $1,133,200 $1,032,120
Cost of sales, including
certain buying,
distribution and occupancy
costs 378,091 317,378 708,745 596,553
----------- ----------- ----------- -----------
Gross profit 231,090 234,781 424,455 435,567
Selling, general and
administrative expenses 143,095 127,912 277,624 246,487
----------- ----------- ----------- -----------
Income from operations 87,995 106,869 146,831 189,080
Other income, net 935 616 2,300 1,039
----------- ----------- ----------- -----------
Income before income
taxes 88,930 107,485 149,131 190,119
Income tax expense 32,237 35,828 53,814 65,505
----------- ----------- ----------- -----------
Net income $56,693 $71,657 $95,317 $124,614
=========== =========== =========== ===========
Net income per common
share:
Basic $0.36 $0.42 $0.59 $0.74
Diluted $0.35 $0.42 $0.59 $0.72
Weighted average common
shares and common share
equivalents outstanding:
Basic 158,581,618 168,908,598 160,436,550 168,880,803
Diluted 160,743,743 172,325,996 162,960,745 172,572,985
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 62.1% 57.5% 62.5% 57.8%
----------- ----------- ----------- -----------
Gross profit 37.9% 42.5% 37.5% 42.2%
Selling, general and
administrative expenses 23.5% 23.1% 24.5% 23.9%
----------- ----------- ----------- -----------
Income from operations 14.4% 19.4% 13.0% 18.3%
Other income, net 0.2% 0.1% 0.2% 0.1%
----------- ----------- ----------- -----------
Income before income
taxes 14.6% 19.5% 13.2% 18.4%
Income tax expense 5.3% 6.5% 4.8% 6.3%
----------- ----------- ----------- -----------
Net income 9.3% 13.0% 8.4% 12.1%
=========== =========== =========== ===========
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
January
July 31, 31, July 31,
2011 2011 2010
---------- ---------- ----------
Assets
Current assets:
Cash and cash equivalents $226,381 $340,257 $244,954
Marketable securities 59,347 116,420 346,107
Accounts receivable, net of
allowance for doubtful
accounts of $994, $1,015 and
$1,360, respectively 52,560 36,502 42,474
Inventories 303,159 229,561 243,203
Prepaid expenses, deferred
taxes and other current
assets 57,121 81,237 85,875
---------- ---------- ----------
Total current assets 698,568 803,977 962,613
Property and equipment, net 626,188 586,346 559,945
Marketable securities 322,902 351,988 157,607
Deferred income taxes and other
assets 57,766 52,010 46,902
---------- ---------- ----------
Total Assets $1,705,424 $1,794,321 $1,727,067
========== ========== ==========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $110,759 $82,904 $92,151
Accrued expenses, accrued
compensation and other
current liabilities 117,756 128,120 106,260
---------- ---------- ----------
Total current liabilities 228,515 211,024 198,411
Deferred rent and other
liabilities 172,589 171,749 155,369
---------- ---------- ----------
Total Liabilities 401,104 382,773 353,780
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares
authorized, none issued -- -- --
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 157,524,395,
164,413,427 and 168,100,495
issued and outstanding
respectively 16 17 17
Additional paid-in-capital -- 27,603 138,413
Retained earnings 1,309,964 1,394,190 1,245,846
Accumulated other
comprehensive loss (5,660) (10,262) (10,989)
---------- ---------- ----------
Total Shareholders' Equity 1,304,320 1,411,548 1,373,287
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,705,424 $1,794,321 $1,727,067
========== ========== ==========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Urban Outfitters, Inc.
CONTACT: Oona McCullough
Director of Investor Relations
(215) 454-4806
