PHILADELPHIA, March 4, 2010 (GLOBE NEWSWIRE) -- 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 record earnings of $78 million and $220 million for the fourth quarter and year ended January 31, 2010, respectively. Earnings per diluted share were $0.45 for the quarter and $1.28 for the year.
As stated in the Company's previous sales release on February 4, 2010, total Company sales for the fourth quarter reached a record $589 million, an increase of 16% over the comparable quarter last year. Comparable retail segment sales, which include our direct-to-consumer channels, increased 9% for the quarter. Comparable store sales rose 10% and 11% at Anthropologie and Free People, respectively and were flat at Urban Outfitters, for a combined comparable store sales increase of 4%. Direct-to-consumer sales surged 28% reflecting strong growth across all brands and wholesale sales continued to improve as compared to previous quarterly trends, down 2% versus the same quarter last year. Total Company net sales for the year ended January 31, 2010 increased 6%, to a record $1.9 billion.
"We are delighted to announce a series of record-breaking results for the quarter and year, including quarterly earnings growth of 92% and a quarterly operating profit of 20%," said Glen T. Senk, Chief Executive Officer. "The sales and profit trend improved in each quarter throughout 2009, and our current February 'comp' sales performance exceeded our fourth quarter 'comp'. Our team continued to exhibit exceptional discipline in managing expenses while simultaneously making strategic investments in design, the supply chain, technology, International, Direct-to-consumer and our newest businesses, Terrain and Leifsdottir," continued Mr. Senk.
Net sales for the periods were as follows:
Three months ended Twelve months ended
January 31, January 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(in thousands) (in thousands)
Urban Outfitters
stores $ 227,858 $ 213,435 $ 760,133 $ 771,362
Anthropologie stores 211,740 172,098 704,849 642,161
Free People stores 11,738 9,588 38,752 32,907
Terrain 1,438 1,165 6,260 5,656
---------- ---------- ---------- ----------
Store net sales 452,774 396,286 1,509,994 1,452,086
---------- ---------- ---------- ----------
Direct-to-consumer 112,231 87,810 323,739 272,472
---------- ---------- ---------- ----------
Retail segment net
sales 565,005 484,096 1,833,733 1,724,558
---------- ---------- ---------- ----------
Wholesale 23,488 23,982 104,082 110,060
---------- ---------- ---------- ----------
Total net sales $ 588,493 $ 508,078 $1,937,815 $1,834,618
========== ========== ========== ==========
For the fourth quarter ended January 31, 2010, gross profit margin improved by 771 basis points, versus the prior year's comparable quarter. The increase was primarily due to significant improvements in initial merchandise margins and a reduction in merchandise markdowns. For the year ended January 31, 2010, gross profit margin increased by 168 basis points versus the prior comparable year. This increase was primarily due to improvements in initial merchandise margins that were partially offset by a higher rate of store occupancy expense driven by the decrease in comparable store sales.
As of January 31, 2010, inventories increased by $16.4 million or 9.7% on a year-over-year basis. This increase was primarily due to the acquisition of inventory to stock new retail stores. For the quarter ended January 31, 2010, total comparable store inventories decreased by 3% at cost.
For the fourth quarter ended January 31, 2010, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by one basis point versus the prior year's comparable quarter. This reduction was primarily driven by cost control across all areas of the business, with the most impact coming from direct store related expenses. These reductions were partially offset by an increase in incentive based compensation related to meeting annual performance targets. For the year ended January 31, 2010, selling, general and administrative expenses expressed as a percentage of net sales increased by 51 basis points versus the prior comparable year. This increase was related to an increase in incentive based compensation partially offset by cost control across all other areas of the business with direct store controllable representing the most significant savings.
The Company's annual effective tax rate for the year ended January 31, 2010 was 36.2% versus 35.6% for the prior year. The increase in the current year rate is primarily attributable to 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 estimates that next year's tax rate will be favorable to this year's annual rate and more comparable with the January 31, 2010 fourth quarter effective rate of 35.9%. The Company expects a favorable change in next year's rate due in part to an increase in income generated from foreign operations.
During the year ended January 31, 2010, the Company opened a total of 33 new stores including: 13 Urban Outfitters stores, 16 Anthropologie stores including our first Anthropologie store in Europe, and 4 Free People stores. The Company plans to open approximately 45 new stores during Fiscal 2011.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 155 Urban Outfitters stores in the United States, Canada, and Europe; 2 websites and a catalog; 137 Anthropologie stores in the United States, Canada and Europe, a web site and a catalog; 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; Leifsdottir wholesale, which sells its product to approximately 65 specialty and select department stores; and one Terrain garden center as of January 31, 2010.
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/playerlink.zhtml?c=115825&s=wm&e=2729530
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)
Quarter Ended Fiscal Year Ended
------------- -----------------
January 31, January 31,
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales $ 588,493 $ 508,078 $ 1,937,815 $ 1,834,618
Cost of sales,
including
certain buying,
distribution
and occupancy
costs 342,832 335,186 1,151,670 1,121,140
----------- ----------- ----------- -----------
Gross profit 245,661 172,892 786,145 713,478
Selling, general
and
administrative
expenses 126,999 109,698 447,161 414,043
----------- ----------- ----------- -----------
Income from
operations 118,662 63,194 338,984 299,435
Other income, net 575 2,953 5,422 10,055
----------- ----------- ----------- -----------
Income before
income taxes 119,237 66,147 344,406 309,490
Income tax
expense 41,562 25,602 124,513 110,126
----------- ----------- ----------- -----------
Net income $ 77,675 $ 40,545 $ 219,893 $ 199,364
=========== =========== =========== ===========
Net income per
common share:
Basic $ 0.46 $ 0.24 $ 1.31 $ 1.20
=========== =========== =========== ===========
Diluted $ 0.45 $ 0.24 $ 1.28 $ 1.17
=========== =========== =========== ===========
Weighted average
common shares
and common share
equivalents
outstanding:
Basic 168,499,260 167,309,239 168,053,502 166,793,062
=========== =========== =========== ===========
Diluted 172,421,607 170,071,913 171,230,245 170,860,605
=========== =========== =========== ===========
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 58.3% 66.0% 59.4% 61.1%
----- ----- ----- -----
Gross profit 41.7% 34.0% 40.6% 38.9%
Selling, general
and
administrative
expenses 21.5% 21.6% 23.1% 22.6%
----- ----- ----- -----
Income from
operations 20.2% 12.4% 17.5% 16.3%
Other income, net 0.1% 0.6% 0.3% 0.6%
----- ----- ----- -----
Income before
income taxes 20.3% 13.0% 17.8% 16.9%
Income tax
expense 7.1% 5.0% 6.4% 6.0%
----- ----- ----- -----
Net income 13.2% 8.0% 11.4% 10.9%
===== ===== ===== =====
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
January 31, January 31,
2010 2009
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 159,024 $ 316,035
Marketable securities 342,512 49,948
Accounts receivable, net of allowance
for doubtful accounts of $1,284 and
$1,229, respectively 38,405 36,390
Inventories 186,130 169,698
Prepaid expenses, deferred taxes and
other current assets 80,142 52,331
----------- -----------
Total current assets 806,213 624,402
Property and equipment, net 539,961 505,407
Marketable securities 243,445 155,226
Deferred income taxes and other assets 46,474 43,974
----------- -----------
Total Assets $ 1,636,093 $ 1,329,009
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 78,041 $ 62,955
Accrued expenses, accrued compensation
and other current liabilities 110,508 78,195
----------- -----------
Total current liabilities 188,549 141,150
Deferred rent and other liabilities 150,769 134,084
----------- -----------
Total Liabilities 339,318 275,234
----------- -----------
Shareholders' equity:
Preferred shares; $.0001 par
value, 10,000,000 shares authorized,
none issued -- --
Common shares; $.0001 par value,
200,000,000 shares authorized,
168,558,371 and 167,712,088 issued and
outstanding, respectively 17 17
Additional paid-in-capital 184,620 170,166
Retained earnings 1,121,232 901,339
Accumulated other comprehensive loss (9,094) (17,747)
----------- -----------
Total Shareholders' Equity 1,296,775 1,053,775
----------- -----------
Total Liabilities and Shareholders' Equity $ 1,636,093 $ 1,329,009
=========== ===========