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Urban Outfitters Reports Record Q1 Sales

PHILADELPHIA, PA, May 18, 2015 - Urban Outfitters, Inc. (URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Bhldn, Free People, Terrain and Urban Outfitters brands, today announced net income of $33 million for the three months ended April 30, 2015.  Earnings per diluted share were $0.25 for the three months ended April 30, 2015.

Total Company net sales for the first quarter of fiscal 2016 increased 8% over the same quarter last year to a record $739 million. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, increased 4%. Comparable Retail segment net sales increased 17% at Free People, 5% at Urban Outfitters and 1% at the Anthropologie Group. Wholesale segment net sales rose 18%.

"I am pleased to announce record first quarter sales and positive Retail segment comparable net sales at each of our brands," said Richard A. Hayne, Chief Executive Officer.  "I believe our Retail segment comparable net sales growth is being driven by the success of our omni-channel strategy," finished Mr. Hayne.

Net sales by brand and segment for the three month period were as follows:

  Three Months Ended  
  April 30,  
Net sales by brand   2015     2014  
Urban Outfitters $ 295,675   $  277,656  
Anthropologie Group1 311,376   299,983  
Free People 131,959   108,671  
Total Company $  739,010   $  686,310  
         
Net sales by segment        
Retail Segment $  685,009   $  640,430  
Wholesale Segment 54,001   45,880  
Total Company $  739,010   $  686,310  

1Anthropologie Group consists of the Anthropologie, Bhldn and Terrain brands

For the three months ended April 30, 2015, the gross profit rate decreased by 141 basis points versus the prior year`s comparable period. The decline in gross profit rate was primarily due to lower initial margins at the Urban Outfitters Brand and higher delivery and fulfillment expense across the entire company.  The deleverage in delivery and fulfillment expenses were partially due to the increase in direct-to-consumer penetration and the beginning of the South Carolina fulfillment center transition to Gap, Pennsylvania.

As of April 30, 2015, total inventories increased by $49 million, or 14%, on a year-over-year basis. The growth in total inventories is primarily related to an increase in comparable Retail segment inventories and the acquisition of inventory to stock new and non-comparable stores. Comparable Retail segment inventories increased 8% at cost while decreasing 5% in units.

For the three months ended April 30, 2015, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 13 basis points when compared to the prior year period. The increase was primarily due to increased marketing and technology expenses that were used to drive higher direct-to-consumer traffic. 

The Company`s effective tax rate for the first quarter of fiscal 2016 was 35.6% compared to 37.0% in the prior year period. The tax rate variance is due to state tax adjustments in the prior year quarter.

On May 27, 2014, the Board of Directors authorized the repurchase of 10.0 million common shares under a share repurchase program.  During fiscal 2015, the Company repurchased and retired 7.7 million common shares for approximately $258 million under this authorization. During the first quarter of fiscal 2016, the Company repurchased 0.4 million shares for approximately $17 million under this authorization. On August 27, 2013, the Board of Directors authorized the repurchase of 10.0 million common shares under a share repurchase program. During the first quarter of fiscal 2015, the Company repurchased and retired 9.7 million common shares for approximately $353 million completing the August 27, 2013 share repurchase authorization.  On February 23, 2015, the Board of Directors authorized the repurchase of 20.0 million shares under a new share repurchase program. No shares have been repurchased under this authorization.

During the three months ended April 30, 2015, the Company opened a total of 7 new stores including: 4 Free People stores, 2 Anthropologie Group stores and 1 Urban Outfitters store. The Company closed 1 Urban Outfitters store.

Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 238 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and websites; 208 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 106 Free People stores in the United States and Canada, catalogs and websites; Free People wholesale, which sells its product to approximately 1,600 specialty stores and select department stores worldwide; as of April 30, 2015.

Management`s first quarter commentary is located on our website at www.urbanoutfittersinc.com.   A conference call will be held today to discuss first quarter results and will be webcast at 5:00 pm. ET at:  http://edge.media-server.com/m/p/ytgdi8px/lan/en  

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," "will," "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, continuation of lowered levels of consumer spending resulting from a worldwide political and economic crisis, any effects of terrorist acts or war, natural disasters or severe weather conditions, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, the departure of one or more key senior executives, 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, failure of our manufacturers to comply with our social compliance program, changes in accounting standards and subjective assumptions, regulatory changes and legal matters 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.

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 (Tables follow)


URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)

    Three Months Ended  
    April 30,  
    2015     2014  
         
Net sales $  739,010   $  686,310  
Cost of sales  492,589   447,799  
  Gross profit 246,421   238,511

 
 
Selling, general and administrative expenses 193,367   178,690  
  Income from operations 53,054   59,821  
Other expense, net (2,121)   (344)  
  Income before income taxes 50,933   59,477  
Income tax expense 18,157   21,999  
   Net income $  32,776   37,478  
         
Net income per common share:        
  Basic $  0.25   $  0.26  
  Diluted $  0.25    $  0.26   
         
Weighted average common shares and common        
  share equivalents outstanding:        
  Basic 131,202,740   144,075,666  
  Diluted 132,836,144   145,906,544  
         
         
AS A PERCENT OF NET SALES        
Net sales 100.0%   100.0%  
Cost of sales    66.7%     65.2%  
  Gross profit 33.3%   34.8%  
Selling, general and administrative expenses   26.1%     26.1%  
  Income from operations 7.2%   8.7%  
Other expense, net   (0.3%)     (0.0%)  
  Income before income taxes 6.9%   8.7%  
Income tax expense   2.5%     3.2%  
  Net income   4.4%     5.5%  


URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)

           April 30,
 2015
  January 31,
2015
  April 30,
2014


ASSETS          
Current assets:          
  Cash and cash equivalents $  176,931   $  154,558   $  191,825
  Marketable securities 96,626   104,246   149,796
  Accounts receivable, net of allowance for doubtful accounts          
  of $767, $850 and $1,986 respectively 54,283   70,458   59,267
  Inventories 397,998   358,237   349,045
  Prepaid expenses, deferred taxes and other current assets 119,083     121,618     103,097
  Total current assets 844,921   809,117   853,030
           
Property and equipment, net 899,324   889,232   836,244
Marketable securities 83,348   104,448   175,694
Deferred income taxes and other assets 89,763    85,944     80,297
  Total Assets $ 1,917,356   $ 1,888,741   $ 1,945,265
           
LIABILITIES AND SHAREHOLDERS` EQUITY          
Current liabilities:          
  Accounts payable $  145,379   $  156,090   $  172,515
  Accrued expenses, accrued compensation and other current liabilities 175,262    197,650     189,585
  Total current liabilities 320,641   353,740   362,100
           
Deferred rent and other liabilities   208,274     207,032      196,760 
  Total Liabilities 528,915   560,772     558,860
           
Shareholders` equity:          
  Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued -   -   -
  Common shares; $.0001 par value, 200,000,000 shares authorized, 131,543,388          
  130,502,864 and 137,651,372 issued and outstanding respectively 13   13   14
  Additional paid-in-capital 24,593   -   -
  Retained earnings 1,376,159 1,343,383   1,384,671
  Accumulated other comprehensive income (loss)   (12,320)     (15,427)     1,720
  Total Shareholders` Equity   1,388,445     1,327,969     1,386,405
  Total Liabilities and Shareholders` Equity  $ 1,917,356   $ 1,888,741   $ 1,945,265

Contact:  
Oona McCullough
Director of Investor Relations
(215) 454-4806



This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Urban Outfitters via GlobeNewswire

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