PHILADELPHIA, Aug. 13, 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 $49 million and $80 million for the three and six months ended July 31, 2009, respectively. Earnings per diluted share were $0.29 for the quarter and $0.47 for the six months ended July 31, 2009.
As stated in the Company's previous sales release on August 6, 2009, for the second quarter of fiscal 2010, total Company net sales increased by 1% over the same quarter last year to $459 million. Comparable retail segment net sales, which include our direct-to-consumer channels, decreased 3%. Comparable store net sales decreased 6% with declines at Anthropologie, Free People and Urban Outfitters of 4%, 16%, and 8%, respectively. Direct-to-consumer net sales rose 17% and wholesale segment net sales declined 7%.
"The Company produced a 17% operating profit which we believe is admirable considering the current economic climate," said Glen T. Senk, Chief Executive Officer. "By deploying exceptional inventory and expense discipline, our team has adeptly driven profit in the face of challenging fundamentals. I am confident in the group's ability to continue to improve on this performance and exploit all current and emerging growth opportunities in our business," finished Mr. Senk.
Net sales for the three and six months were as follows:
(in thousands) (in thousands)
Three months ended Six months ended
July 31, July 31,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Urban Outfitters stores $177,121 $189,812 $329,953 $349,602
Anthropologie stores 173,146 165,615 311,489 311,211
Free People stores 9,215 7,759 16,528 13,618
Terrain 2,312 2,608 3,615 3,225
-------- -------- -------- --------
Net store sales 361,794 365,794 661,585 677,656
-------- -------- -------- --------
Direct-to-consumer 70,926 60,498 131,736 118,746
-------- -------- -------- --------
Retail segment net sales 432,720 426,292 793,321 796,402
-------- -------- -------- --------
Wholesale Segment net
sales 25,906 28,003 50,101 52,185
-------- -------- -------- --------
Total net sales $458,626 $454,295 $843,422 $848,587
======== ======== ======== ========
For the three and six months ended July 31, 2009, gross profit margins decreased by 26 and 151 basis points, respectively, versus the prior year's comparable periods. These decreases were 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. These decreases more than offset considerable improvements in initial merchandise margins.
As of July 31, 2009, inventories grew by $6 million or 3%, on a year-over-year basis, driven by the acquisition of inventory to stock new retail stores. Total comparable store inventories decreased by 7%.
For the three and six months ended July 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 89 and 91 basis points, respectively, versus the comparable periods last year. These increases were primarily due to the deleveraging of fixed store costs related to the decline in comparable store sales and a one-time site development expense related to a prospective Terrain location.
During the three months ended July 31, 2009, the Company's quarterly tax rate rose to 38.3% from 33.2% in the prior year's comparable quarter. The increase was primarily due to tax rate hikes at certain state municipalities enacted during the second quarter and retroactively effective for the entire 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 expects the current annual effective tax rate to remain consistent during the remainder of the year.
During the six months ended July 31, 2009, the Company has opened a total of 15 new stores including: 6 Urban Outfitters stores, 6 Anthropologie stores and 3 Free People stores. The Company expects to open 34 to 36 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 148 Urban Outfitters stores in the United States, Canada, and Europe, two web sites and a catalog; 127 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; 33 Free People stores, a web-site and catalog; and 1 Terrain garden center as of July 31, 2009.
A conference call will be held today to discuss second quarter results and will be web cast at 11:00 a.m. EDT at:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115825&eventID=2330800
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 Six Months Ended
July 31, July 31,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net sales $ 458,626 $ 454,295 $ 843,422 $ 848,587
Cost of sales,
including
certain
buying,
distribution
and occupancy
costs 271,535 267,785 513,021 503,397
------------ ------------ ------------ ------------
Gross profit 187,091 186,510 330,401 345,190
Selling, general
and
administrative
expenses 108,650 103,590 205,840 199,328
------------ ------------ ------------ ------------
Income from
operations 78,441 82,920 124,561 145,862
Other income,
net 939 2,445 3,030 5,665
------------ ------------ ------------ ------------
Income before
income taxes 79,380 85,365 127,591 151,527
Income tax
expense 30,359 28,377 47,765 51,982
------------ ------------ ------------ ------------
Net income $ 49,021 $ 56,988 $ 79,826 $ 99,545
============ ============ ============ ============
Net income per
common share:
Basic $ 0.29 $ 0.34 $ 0.48 $ 0.60
============ ============ ============ ============
Diluted $ 0.29 $ 0.33 $ 0.47 $ 0.58
============ ============ ============ ============
Weighted average
common shares
and common share
equivalents
outstanding:
Basic 167,919,873 166,698,963 167,691,718 166,412,217
============ ============ ============ ============
Diluted 170,719,274 171,687,530 170,521,836 171,148,661
============ ============ ============ ============
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 59.2% 58.9% 60.8% 59.3%
------------ ------------ ------------ ------------
Gross profit 40.8% 41.1% 39.2% 40.7%
Selling, general
and
administrative
expenses 23.7% 22.8% 24.4% 23.5%
------------ ------------ ------------ ------------
Income from
operations 17.1% 18.3% 14.8% 17.2%
Other income
(expense), net 0.2% 0.5% 0.4% 0.7%
------------ ------------ ------------ ------------
Income
before
income
taxes 17.3% 18.8% 15.2% 17.9%
Income tax
expense 6.6% 6.2% 5.7% 6.1%
------------ ------------ ------------ ------------
Net income 10.7% 12.6% 9.5% 11.8%
============ ============ ============ ============
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
July 31, January 31, July 31,
2009 2009 2008
----------- ----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 152,885 $ 316,035 $ 160,391
Marketable securities 135,875 49,948 76,905
Accounts receivable, net of
allowance for doubtful
accounts of $1,368, $1,229
and $2,395, respectively 32,039 36,390 32,468
Inventories 217,050 169,698 211,205
Prepaid expenses, deferred
taxes and other current
assets 46,005 52,331 47,762
----------- ----------- -----------
Total current assets 583,854 624,402 528,731
Property and equipment, net 528,295 505,407 507,399
Marketable securities 294,519 155,226 191,129
Deferred income taxes and
other assets 38,553 43,974 41,130
----------- ----------- -----------
Total Assets $ 1,445,221 $ 1,329,009 $ 1,268,389
=========== =========== ===========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $ 85,336 $ 62,955 $ 88,521
Accrued expenses, accrued
compensation and other
current liabilities 74,764 78,195 83,478
----------- ----------- -----------
Total current liabilities 160,100 141,150 171,999
Deferred rent and other
liabilities 136,906 134,084 128,252
----------- ----------- -----------
Total Liabilities 297,006 275,234 300,251
----------- ----------- -----------
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares
authorized, none issued -- -- --
Common shares; $.0001 par
value, 200,000,000 shares
authorized, 168,200,288,
167,712,088 and 167,164,738
issued and outstanding,
respectively 17 17 17
Additional paid-in capital 175,839 170,166 160,615
Retained earnings 981,165 901,339 801,520
Accumulated other
comprehensive (loss) income (8,806) (17,747) 5,986
----------- ----------- -----------
Total Shareholders' Equity 1,148,215 1,053,775 968,138
----------- ----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,445,221 $ 1,329,009 $ 1,268,389
=========== =========== ===========