UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 5, 2009

 

 

URBAN OUTFITTERS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Pennsylvania		000-22754		23-2003332
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

5000 South Broad St, Philadelphia PA		19112-1495
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (215) 454-5500

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On March 5, 2009, the Company issued an earnings release, which is attached hereto as Exhibit 99.1 and incorporated herein by reference. The earnings release disclosed material non-public information regarding the Company’s earnings for the three and twelve months ended January 31, 2009.

 

Item 9.01.

Financial Statements and Exhibits

 

99.1		Earnings Release dated March 5, 2009 – Earnings for the three and twelve months ended January 31, 2009.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		URBAN OUTFITTERS, INC.
Date: March 10, 2009		By:		/s/ John E. Kyees
				John E. Kyees
				Chief Financial Officer

 

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Exhibit Index

 

Exhibit No.		Description
EX-99.1		Earnings Release dated March 5, 2009 – Earnings for the three and twelve months ended January 31, 2009.

 

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Exhibit 99.1

URBAN OUTFITTERS, INC.

Fourth Quarter and Annual Results

Philadelphia, PA – March 5, 2009

 

For Immediate Release		Contact:		John Kyees
				Chief Financial Officer
				(215) 454-5500

Urban Outfitters Reports Q4 Earnings

PHILADELPHIA, March 5, 2009 (GLOBENEWSWIRE) - 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 $41 million and $199 million for the fourth quarter and year ended January 31, 2009, respectively. Earnings per diluted share were $0.24 for the quarter and $1.17 for the year.

As stated in the Company’s previous sales release on February 5, 2009, total sales for the fourth quarter reached a record $508 million, an increase of 9% over the comparable quarter last year. Comparable retail segment sales, which include our Direct-to-consumer channels, increased 3% for the quarter. Comparable store sales rose 3% at Urban Outfitters and decreased 6% and 13% at Anthropologie and Free People respectively, for a combined total company comparable store sales decrease of 1%. Direct-to-consumer sales surged 20%, reflecting strong growth across all brands. Free People wholesale sales decreased 3% for the quarter. Total Company net sales for the year ended January 31, 2009 increased 22%, to a record $1.8 billion.

“We are pleased to announce healthy fourth quarter earnings despite an uncertain and challenging environment,” said Glen T. Senk, Chief Executive Officer. “We are particularly proud of our team’s ability to execute two critical tasks during the quarter: reducing ‘comp’ inventory levels by 13% versus the prior year, and implementing measurable cost control initiatives resulting in SG&A expense improvements of 73 basis points versus the prior year. It was another record breaking year for the URBN team, and we enter the spring selling season enthusiastically committed to providing a compelling product assortment and customer experience,” finished Mr. Senk.

Net sales for the periods were as follows:

 

		Three months ended January 31,						Twelve months ended January 31,
		2009			2008			2009			2008
		(in thousands)						(in thousands)
Urban Outfitters stores		$	213,435		$	196,625		$	771,362		$	628,328
Anthropologie stores			172,098			165,853			642,161			561,990
Free People stores			9,588			6,302			32,907			17,192
Terrain			1,165			—			5,656			—
Net store sales			396,286			368,780			1,452,086			1,207,510
Direct-to-consumer			87,810			72,920			272,472			205,742
Retail segment net sales			484,096			441,700			1,724,558			1,413,252
Wholesale			23,982			23,711			110,060			94,472
Total net sales		$	508,078		$	465,411		$	1,834,618		$	1,507,724

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For the fourth quarter ended January 31, 2009, gross profit margin declined by 555 basis points, versus the prior year’s comparable period. This decrease is primarily due to a higher rate of applied and anticipated merchandise markdowns to clear seasonal inventory. For the year ended January 31, 2009, gross profit margin increased by 64 basis points primarily due to the leveraging of store occupancy costs and improvements to initial margins.

As of January 31, 2009, inventories decreased by $2.2 million or 1% on a year-over-year basis as comparable store inventory declines more than offset additions to inventories for new stores. For the quarter ended January 31, 2009, total comparable store inventories decreased by 13%.

For the fourth quarter and year ended January 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 73 and 76 basis points, respectively, versus the prior year comparable periods. For the quarter, the reduction was primarily driven by cost control across all areas of the business, with the most impact in direct store related expenses. For the year ended January 31, 2009, the favorable rate reduction was primarily due to cost control in direct store related expenses as well as savings related to non-recurring legal fees incurred in the prior year.

The Company’s annual effective tax rate was 35.6% versus 31.6% for the prior year. The prior year’s rate was favorably impacted by the receipt of one-time federal tax incentives for work performed on the development of our new home office. The Company estimates that next year’s tax rate will be similar to this year.

During the year ended January 31, 2009 the Company opened 20 Urban Outfitters stores, 13 Anthropologie stores, 15 Free People stores and 1 Terrain garden center or 49 new stores in total. The Company plans to open 42 to 45 new stores during fiscal year 2010.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 142 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 121 Anthropologie stores, a web site, catalog and Leifsdottir, Anthropologie’s recently launched wholesale concept; Free People Wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 30 Free People stores, a web-site and catalog; and 1 Terrain garden center as of January 31, 2009.

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/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2075955

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.

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(Tables follow)

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URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

(in thousands, except share and per share data)

(unaudited)

 

		Quarter Ended January 31,								Fiscal Year Ended January 31,
		2009				2008				2009				2008
Net sales		$	508,078			$	465,411			$	1,834,618			$	1,507,724
Cost of sales, including certain buying, distribution and occupancy costs			335,186				281,219				1,121,140				930,952
Gross profit			172,892				184,192				713,478				576,772
Selling, general and administrative expenses			109,698				103,861				414,043				351,827
Income from operations			63,194				80,331				299,435				224,945
Other income, net			2,953				3,459				10,055				9,450
Income before income taxes			66,147				83,790				309,490				234,395
Income tax expense			25,602				30,175				110,126				74,164
Net income		$	40,545			$	53,615			$	199,364			$	160,231
Net income per common share:
Basic		$	0.24			$	0.32			$	1.20			$	0.97
Diluted		$	0.24			$	0.32			$	1.17			$	0.94
Weighted average common shares and common share equivalents outstanding:
Basic			167,309,239				165,629,648				166,793,062				165,305,207
Diluted			170,071,913				170,099,923				170,860,605				169,640,585
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			66.0	%			60.4	%			61.1	%			61.7	%
Gross profit			34.0	%			39.6	%			38.9	%			38.3	%
Selling, general and administrative expenses			21.6	%			22.3	%			22.6	%			23.3	%
Income from operations			12.4	%			17.3	%			16.3	%			15.0	%
Other income, net			0.6	%			0.7	%			0.6	%			0.6	%
Income before income taxes			13.0	%			18.0	%			16.9	%			15.6	%
Income tax expense			5.0	%			6.4	%			6.0	%			4.9	%
Net income			8.0	%			11.6	%			10.9	%			10.7	%

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URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

		January 31, 2009				January 31, 2008
Assets
Current assets:
Cash and cash equivalents		$	316,035			$	105,271
Marketable securities			49,948				80,127
Accounts receivable, net of allowance for doubtful accounts of $1,229 and $972, respectively			34,611				26,365
Inventories			169,698				171,925
Prepaid expenses, deferred taxes and other current assets			47,983				49,922
Total current assets			618,275				433,610
Property and equipment, net			505,407				488,889
Marketable securities			155,226				188,252
Deferred income taxes and other assets			43,974				32,040
Total Assets		$	1,322,882			$	1,142,791
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	62,955			$	74,020
Accrued expenses, accrued compensation and other current liabilities			76,416				93,358
Total current liabilities			139,371				167,378
Deferred rent and other liabilities			129,736				121,982
Total Liabilities			269,107				289,360
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued			—				—
Common shares; $.0001 par value, 200,000,000 shares authorized, 167,712,088 and 166,104,615 issued and outstanding, respectively			17				17
Additional paid-in-capital			170,166				144,204
Retained earnings			901,339				701,975
Accumulated other comprehensive (loss) income			(17,747	)			7,235
Total Shareholders’ Equity			1,053,775				853,431
Total Liabilities and Shareholders’ Equity		$	1,322,882			$	1,142,791