Press Release:
PHILADELPHIA, Nov 15, 2010 (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 $73 million and $198 million for the three and nine months ended October 31, 2010, respectively. Earnings per diluted share were $0.43 for the quarter and $1.16 for the nine months ended October 31, 2010.
Total Company net sales rose by 13% over the same quarter last year to $574 million.
Comparable retail segment net sales, which include our direct-to-consumer channels, improved 6% for the quarter while comparable store net sales grew 1% for the quarter. Comparable retail segment net sales at Anthropologie, Free People and Urban Outfitters increased 5%, 29%, and 5%, respectively for the quarter. Direct-to-consumer comparable net sales soared 31% and wholesale segment net sales rose 13% for the quarter.
“We are proud to deliver record third quarter sales and earnings results,” said Glen T. Senk, Chief Executive Officer. “In a dynamic environment, the consistency of our performance is a reflection of our team’s discipline, creativity, and skill,” finished Mr. Senk.
Net sales by brand and channel for the three and nine months were as follows:
Three Months Ended
Nine Months Ended
October 31 October 31
—————— ———————-
Net sales by brand 2010 2009 2010 2009
——– ——– ———- ———-
Urban Outfitters $265,993 $240,473 $719,730 $633,155
Anthropologie 247,549 216,270 728,581 584,615
Free People 56,108 45,084 143,552 120,045
Other 3,942 4,073 13,849 11,507
——– ——– ———- ———-
Total Company $573,592 $505,900 $1,605,712 $1,349,322
======== ======== ========== ==========
Net sales by
channel
Retail Stores $433,425 $395,635 $1,227,621 $1,057,220
Direct-to-consumer 105,670 79,772 288,508 211,508
——– ——– ———- ———-
Retail Segment 539,095 475,407 1,516,129 1,268,728
——– ——– ———- ———-
Wholesale Segment 34,497 30,493 89,583 80,594
——– ——– ———- ———-
Total Company $573,592 $505,900 $1,605,712 $1,349,322
======== ======== ========== ==========
For the three months ended October 31, 2010, gross profit margin declined by 39 basis points versus the prior year’s comparable period. This decrease was primarily due to higher shipping costs associated with an increased penetration of international direct-to-consumer business as well as the impact of pre-opening occupancy expense due to the timing of store openings.
During the quarter merchandise margins were flat to the prior year comparable period. For the nine months ended October 31, 2010, gross profit margin improved by 176 basis points versus the prior year’s comparable period. The increase for the nine month period was primarily due to improved merchandise margins and leveraging of store occupancy expense driven by positive comparable store sales.
As of October 31, 2010, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 8% at cost while total comparable store inventory increased by 1% at cost. Total inventories grew by $55 million or 23%, on a year-over-year basis, driven primarily by the acquisition of inventory to stock new retail stores.
For the three months ended October 31, 2010, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 27 basis points. This increase was primarily due to higher fulfillment costs related to the increased penetration of international direct-to-consumer sales, investments in systems and international infrastructure.
For the nine months ended October 31, 2010, selling, general and administration expenses, expressed as a percentage of net sales, decreased by 21 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 nine months ended October 31, 2010.
During the three months ended October 31, 2010, the Company’s quarterly tax rate decreased to 30.8% from 36.1% in the prior year’s comparable quarter. This decrease was due to the favorable mix of earnings in certain foreign jurisdictions, the current year federal rehabilitation credit and favorable revisions to state tax estimates resulting from tax return filings. The Company expects the annual effective tax rate to be approximately 34% for the full year.
On February 28, 2006, our Board of Directors approved a stock repurchase program. The program authorizes the Company to purchase up to 8,000,000 shares of our common shares from time-to-time, based upon prevailing market conditions. We repurchased 1,220,000 common shares during the fiscal year ended January 31, 2007. During the three months ended October 31, 2010, the Company repurchased 4,273,267 common shares for $133 million at an average price of $31.06 per share. During the nine months ended October 31, 2010 the Company repurchased and subsequently retired 6,288,447 common shares. As of October 31, 2010, 491,553 shares were available under the stock repurchase program.
During the nine months ended October 31, 2010, the Company has opened a total of 29 new stores including: 11 Urban Outfitters stores, 13 Anthropologie stores and 5 Free People stores. As of February 1, 2010, the Company converted one Free People store to a new Free People wholesale showroom. The Company expects to open approximately 45 new stores during the fiscal year.
Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 166 Urban Outfitters stores in the United States, Canada, and Europe, catalogs and two web sites; 150 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; 38 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 October 31, 2010.
