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Urban Outfitters Reports Record 4th Quarter Operating Profit
PHILADELPHIA, Mar 7, 2011 (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 earnings of $75 million and $273 million for the fourth quarter and year ended January 31, 2011, respectively. Earnings per diluted share were $0.45 for the quarter and $1.60 for the year.
Total Company net sales rose by 14% over the same quarter last year to $668 million. Comparable retail segment net sales, which include our direct-to-consumer channels, improved 4% for the quarter while comparable store net sales decreased 2% for the quarter. Comparable retail segment net sales at Anthropologie, Free People and Urban Outfitters increased 1%, 28%, and 5% respectively for the quarter. Direct-to-consumer comparable net sales soared 28% and wholesale segment net sales rose 31% for the quarter.
"I am pleased to announce record sales and operating profits for the quarter, as well as our second highest operating margin rate for the fourth quarter and year," said Glen T. Senk, Chief Executive Officer. "It was another year of strong performance as we delivered 17% sales growth, 22% operating income growth, and executed our long standing goal of growing profits faster than sales," finished Mr. Senk.
Net sales by brand and channel for the three and twelve months were as follows:
Three Months Ended
Twelve Months Ended
January 31 January 31
------------------ ----------------------
Net sales by brand 2011 2010 2011 2010
-------- -------- ---------- ----------
Urban Outfitters $321,772 $284,068 $1,041,502 $917,223
Anthropologie 283,418 257,759 1,011,999 842,374
Free People 58,941 43,589 202,493 163,634
Other 4,259 3,077 18,108 14,584
-------- -------- ---------- ----------
Total Company $668,390 $588,493 $2,274,102 $1,937,815
======== ======== ========== ==========
Net sales by
channel
Retail Stores $492,381 $452,774 $1,720,002 $1,509,994
Direct-to-consumer 145,282 112,231 433,790 323,739
-------- -------- ---------- ----------
Retail Segment 637,663 565,005 2,153,792 1,833,733
-------- -------- ---------- ----------
Wholesale Segment 30,727 23,488 120,310 104,082
-------- -------- ---------- ----------
Total Company $668,390 $588,493 $2,274,102 $1,937,815
======== ======== ========== ==========
For the fourth quarter ended January 31, 2011, gross profit margin percentage declined by 208 basis points versus the prior year's comparable period. This decrease was primarily due to increased merchandise markdowns to clear seasonal inventory associated with changing women's apparel fashion trends, along with higher shipping costs associated with increased penetration of international direct-to-consumer business.
For the year ended January 31, 2011, gross profit margin improved by 62 basis points versus the prior year's comparable period. The increase was primarily due to improved merchandise margins and leveraging of store occupancy expense driven by positive comparable store sales.
As of January 31, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 10% at cost while total comparable store inventory increased by 4% at cost. Total inventories grew by $43 million or 23%, on a year-over-year basis, driven primarily by the acquisition of inventory to stock new retail stores.
For the fourth quarter ended January 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 7 basis points. This increase was primarily due to continued investments in systems, international expansion and start up expenses for BHLDN which launched on February 14th, 2011. For the year ended January 31, 2011, selling, general and administration expenses, expressed as a percentage of net sales, decreased by 11 basis points versus the prior comparable period. This decrease was primarily due to leveraging of direct store fixed and controllable costs helped by the positive comparable retail segment sales during the year.
The Company's annual effective tax rate for January 31, 2011 decreased to 34.6% from 36.2% in the prior year. This decrease was due to the favorable mix of earnings in certain foreign jurisdictions and the current year federal rehabilitation credit.
On February 28, 2006, our Board of Directors approved a stock repurchase program. The program authorizes the Company to purchase up to 8 million shares of our common shares from time-to-time, based upon prevailing market conditions. We repurchased 1.2 million common shares during the fiscal year ended January 31, 2007. During the quarter ended January 31, 2011, the Company did not repurchase any shares. During the year ended January 31, 2011 the Company repurchased and subsequently retired 6.3 million common shares for $205 million. On November 16, 2010, our Board of Directors authorized the repurchase of 10 million additional shares of the Company's common stock, from time-to-time, subject to prevailing market conditions. This authorization supplements the Company's 2006 stock repurchase program.
During the year ended January 31, 2011, the Company opened a total of 46 new stores including: 21 Urban Outfitters stores, 16 Anthropologie stores and 9 Free People stores.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 176 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and two web sites; 153 Anthropologie stores in the United States, Canada and Europe, catalogs and two websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 42 Free People stores, catalogs and web site; Leifsdottir wholesale, which sells its product to approximately 65 specialty stores and select department stores, and a Leifsdottir web site and 1 Terrain garden center and web site as of January 31, 2011.
Management's fourth quarter commentary is located on our website at www.urbanoutfittersinc.com. A conference call will be held today to discuss fourth quarter and year end results and will be web cast at 5:00 pm EST 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. 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.
(Tables follow)
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Year Ended
January 31, January 31,
------------------------ ------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net sales $668,390 $588,493 $2,274,102 $1,937,815
Cost of sales, including
certain buying,
distribution and occupancy
costs 403,330 342,832 1,337,482 1,151,670
----------- ----------- ----------- -----------
Gross profit 265,060 245,661 936,620 786,145
Selling, general and
administrative expenses 144,737 126,999 522,417 447,161
----------- ----------- ----------- -----------
Income from operations 120,323 118,662 414,203 338,984
Other income, net 1,090 575 3,005 5,422
----------- ----------- ----------- -----------
Income before income
taxes 121,413 119,237 417,208 344,406
Income tax expense 46,175 41,562 144,250 124,513
----------- ----------- ----------- -----------
Net income $75,238 $77,675 $272,958 $219,893
=========== =========== =========== ===========
Net income per common
share:
Basic $0.46 $0.46 $1.64 $1.31
=========== =========== =========== ===========
Diluted $0.45 $0.45 $1.60 $1.28
=========== =========== =========== ===========
Weighted average common
shares and common share
equivalents outstanding:
Basic 164,188,852 168,499,260 166,896,322 168,053,502
=========== =========== =========== ===========
Diluted 167,677,305 172,421,607 170,333,550 171,230,245
=========== =========== =========== ===========
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 60.3% 58.3% 58.8% 59.4%
----------- ----------- ----------- -----------
Gross profit 39.7% 41.7% 41.2% 40.6%
Selling, general and
administrative expenses 21.7% 21.5% 23.0% 23.1%
----------- ----------- ----------- -----------
Income from operations 18.0% 20.2% 18.2% 17.5%
Other income, net 0.2% 0.1% 0.1% 0.3%
----------- ----------- ----------- -----------
Income before income
taxes 18.2% 20.3% 18.3% 17.8%
Income tax expense 6.9% 7.1% 6.3% 6.4%
----------- ----------- ----------- -----------
Net income 11.3% 13.2% 12.0% 11.4%
=========== =========== =========== ===========
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
January January
31, 31,
2011 2010
---------- ----------
Assets
Current assets:
Cash and cash equivalents $340,257 $159,024
Marketable securities 116,420 342,512
Accounts receivable, net of
allowance for doubtful
accounts of $1,015 and
$1,284, respectively 34,439 38,405
Inventories 229,561 186,130
Prepaid expenses, deferred
taxes and other current
assets 81,237 80,142
---------- ----------
Total current assets 801,914 806,213
Property and equipment, net 586,346 539,961
Marketable securities 350,975 243,445
Deferred income taxes and other
assets 52,365 46,474
---------- ----------
Total Assets $1,791,600 $1,636,093
========== ==========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $82,904 $78,041
Accrued expenses, accrued
compensation and other
current liabilities 126,057 110,508
---------- ----------
Total current liabilities 208,961 188,549
Deferred rent and other
liabilities 171,749 150,769
---------- ----------
Total Liabilities 380,710 339,318
---------- ----------
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares
authorized, none issued -- --
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 164,413,427 and
168,558,371 issued and
outstanding, respectively 17 17
Additional paid-in-capital 27,603 184,620
Retained earnings 1,394,190 1,121,232
Accumulated other
comprehensive loss (10,920) (9,094)
---------- ----------
Total Shareholders' Equity 1,410,890 1,296,775
---------- ----------
Total Liabilities and
Shareholders' Equity $1,791,600 $1,636,093
========== ==========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Urban Outfitters, Inc.
CONTACT: Oona McCullough Director of Investor Relations (215) 454-4806
