PHILADELPHIA, PA, November 16, 2015 -
Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle specialty
retail company operating under the Anthropologie, Bhldn, Free
People, Terrain and Urban Outfitters brands, today announced net
income of $52 million and $152 million for the three and nine
months ended October 31, 2015, respectively. Earnings per
diluted share were $0.42 and $1.18 for the three and nine months
ended October 31, 2015, respectively.
Total Company net sales for the third quarter of
fiscal 2016 increased 1% over the same quarter last year to a
record $825 million. Comparable Retail segment net sales, which
include our comparable direct-to-consumer channel, increased 1%.
Comparable Retail segment net sales increased 3% at Free People and
1% at Urban Outfitters, while the Anthropologie Group was flat.
Wholesale segment net sales declined 5% due to shipment delays at
our new distribution facility in Gap, Pennsylvania.
"I am pleased we delivered sales, margin and
profit growth in the third quarter despite weaker customer
traffic," said Richard A. Hayne, Chief Executive Officer. "I
believe the strong customer response to expanded category offerings
at each brand bodes well for our future growth," finished Mr.
Hayne.
Net sales by brand and segment for the three and
nine month periods were as follows:
|
Three Months
Ended |
|
Nine Months
Ended |
|
October 31, |
|
October 31, |
Net sales by brand |
2015 |
|
2014 |
|
2015 |
|
2014 |
Urban
Outfitters |
$ 339,616 |
|
$ 340,413 |
|
$ 977,498 |
|
$ 946,701 |
Anthropologie Group1 |
341,112 |
|
332,872 |
|
1,023,160 |
|
987,171 |
Free
People |
144,530 |
|
141,185 |
|
431,070 |
|
378,161 |
Total
Company |
$ 825,258 |
|
$814,470 |
|
$ 2,431,728 |
|
$ 2,312,033 |
|
|
|
|
|
|
|
|
Net sales by segment |
|
|
|
|
|
|
|
Retail
Segment |
$ 765,525 |
|
$ 751,451 |
|
$ 2,246,274 |
|
$ 2,143,997 |
Wholesale
Segment |
59,733 |
|
63,019 |
|
185,454 |
|
168,036 |
Total
Company |
$ 825,258 |
|
$ 814,470 |
|
$ 2,431,728 |
|
$ 2,312,033 |
1Anthropologie
Group consists of the Anthropologie, Bhldn and Terrain brands
For the three months ended October
31, 2015, the gross profit rate increased by 11 basis points versus
the prior year's comparable period. The increase in gross
profit rate was primarily driven by almost 150 basis points of
improvement in the Company's maintained margin due to significant
improvement in the Urban Outfitters brand markdown rate which was
partially offset by lower maintained margins in the Anthropologie
Group and Free People retail segments. The Company's maintained
margin improvement was partially offset by approximately 100 basis
points of deleverage in delivery and fulfillment center expenses
primarily related to the ongoing transition of our South Carolina
fulfillment center to Gap, Pennsylvania, and increased
direct-to-consumer sales penetration. This was further offset by
the impact of currency translation for the quarter. For the
nine months ended October 31, 2015, the gross profit rate declined
by 63 basis points versus the prior year's comparable period. The
decline in gross profit rate was primarily driven by higher
delivery and fulfillment center expenses largely related to the
increase in direct-to-consumer sales penetration as well as
incremental costs associated with the Gap, Pennsylvania,
fulfillment center transition.
As of October 31, 2015, total
inventories decreased by $26 million, or 5%, on a year-over-year
basis. The decrease in total inventories is primarily related to
the decline in comparable Retail segment inventories, which
decreased 9% at cost.
For the three months ended October 31, 2015, selling, general and
administrative expenses, expressed as a percentage of net sales,
decreased by 23 basis points compared to the prior year's
comparable period. The decrease was due to lower incentive based
and share-based compensation expense, as well as foreign currency
translation, which were partially offset by an increase in
technology related expenses used to support our direct-to-consumer
channel investments. For the nine months ended October 31,
2015, selling, general and administrative expenses, expressed as a
percentage of net sales, were flat compared to the prior year's
comparable period.
The Company's effective tax rate for the third
quarter of fiscal 2016 was 35.3% compared to 37.8% in the prior
year's comparable period. The lower quarterly tax rate is primarily
due to a federal rehabilitation credit received in the current
quarter, which was partially offset by valuation allowances on
certain net operating losses.
On February 23, 2015, the Company's Board of Directors
authorized the repurchase of 20 million common shares under a share
repurchase program. Under this authorization, the Company
repurchased and subsequently retired a total of 8.4 million common
shares for approximately $282.7 million during the nine months
ended October 31, 2015.
On May 27, 2014, the Company's Board of Directors authorized
the repurchase of 10 million common shares under a share repurchase
program. During the nine months ended October 31, 2015, the Company
repurchased and subsequently retired 2.3 million shares at a total
cost of $82.8 million, which completed this authorization. The
Company repurchased and subsequently retired 7.7 million common
shares at a total cost of $258.2 million during fiscal 2015.
On July 1, 2015, the Company entered into a five-year $400 million
asset-based revolving credit facility with a group of lenders, with
JPMorgan Chase Bank N.A. as administrative agent. The new credit
facility replaced the Company's existing $175 million line of
credit facility with Wells Fargo Bank, National Association, which
was set to expire in March 2019, and is secured by the Company's
eligible inventory and accounts receivable. As of October 31, 2015,
borrowings under the new revolving credit facility totaled
approximately $115 million. All borrowings under the revolving
credit facilities were used to fund the repurchase of common shares
of the Company.
During the nine months ended October 31, 2015, the Company opened a
total of 23 new stores including: 11 Free People stores, 8
Anthropologie Group stores and 4 Urban Outfitters stores. The
Company closed three stores during the nine months ended October
31, 2015, two Urban Outfitters stores and one Free People
store.
Urban Outfitters, Inc. is an innovative specialty retail company
which offers a variety of lifestyle merchandise to highly defined
customer niches through 240 Urban Outfitters stores in the United
States, Canada, and Europe, catalogs and websites; 214
Anthropologie Group stores in the United States, Canada and Europe,
catalogs and websites; 112 Free People stores in the United States
and Canada, catalogs and websites; and Free People wholesale, which
sells its product to approximately 1,600 specialty stores and
select department stores worldwide; as of October 31, 2015.
A conference call will be held today to discuss third quarter
results and will be webcast at 5:00 pm. ET at:
http://edge.media-server.com/m/p/74gcm9i4/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.
###
(Tables follow)
URBAN OUTFITTERS,
INC.
Condensed Consolidated Statements of Income
(in thousands,
except share and per share data)
(unaudited)
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
October
31, |
|
October
31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ 825,258 |
|
$ 814,470 |
|
$ 2,431,728 |
|
$ 2,312,033 |
Cost
of sales |
537,070 |
|
530,946 |
|
1,579,014 |
|
1,486,740 |
Gross profit |
288,188 |
|
283,524 |
|
852,714 |
|
825,293 |
Selling, general and administrative expenses |
207,863 |
|
207,059 |
|
615,584 |
|
583,890 |
Income from operations |
80,325 |
|
76,465 |
|
237,130 |
|
241,403 |
Other
income (expense), net |
63 |
|
(693) |
|
(2,654) |
|
(1,560) |
Income before income taxes |
80,388 |
|
75,772 |
|
234,476 |
|
239,843 |
Income
tax expense |
28,394 |
|
28,629 |
|
82,865 |
|
87,713 |
Net income |
$ 51,994 |
|
$ 47,143 |
|
$ 151,611 |
|
$ 152,130 |
|
|
|
|
|
|
|
|
Net
income per common share: |
|
|
|
|
|
|
|
Basic |
$ 0.42 |
|
$ 0.35 |
|
$ 1.19 |
|
$ 1.10 |
Diluted |
$ 0.42 |
|
$ 0.35 |
|
$ 1.18 |
|
$ 1.09 |
|
|
|
|
|
|
|
|
Weighted average common shares and common |
|
|
|
|
|
|
|
share equivalents outstanding: |
|
|
|
|
|
|
|
Basic |
123,442,931 |
|
134,267,259 |
|
127,478,092 |
|
138,201,670 |
Diluted |
123,725,581 |
|
135,948,454 |
|
128,506,955 |
|
139,946,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS A
PERCENT OF NET SALES |
|
|
|
|
|
|
|
Net
sales |
100.0% |
|
100.0% |
|
100.0% |
|
100.0% |
Cost
of sales |
65.1% |
|
65.2% |
|
64.9% |
|
64.3% |
Gross profit |
34.9% |
|
34.8% |
|
35.1% |
|
35.7% |
Selling, general and administrative expenses |
25.2% |
|
25.4% |
|
25.3% |
|
25.3% |
Income from operations |
9.7% |
|
9.4% |
|
9.8% |
|
10.4% |
Other
income (expense), net |
0.0% |
|
(0.1%) |
|
(0.2%) |
|
0.0% |
Income before income taxes |
9.7% |
|
9.3% |
|
9.6% |
|
10.4% |
Income
tax expense |
3.4% |
|
3.5% |
|
3.4% |
|
3.8% |
Net income |
6.3% |
|
5.8% |
|
6.2% |
|
6.6% |
URBAN OUTFITTERS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share and per share
data)
(unaudited)
|
|
|
|
|
October 31,
2015 |
|
January 31,
2015 |
|
October 31,
2014 |
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$
149,597 |
|
$ 154,558 |
|
$ 128,191 |
Marketable securities |
69,545 |
|
104,246 |
|
115,005 |
Accounts receivable, net of allowance for doubtful accounts |
|
|
|
|
|
of
$675, $850 and $1,004, respectively |
68,332 |
|
70,458 |
|
70,803 |
Inventories |
441,550 |
|
358,237 |
|
467,097 |
Prepaid expenses, deferred taxes and other current assets |
118,202 |
|
121,618 |
|
116,969 |
Total current assets |
847,226 |
|
809,117 |
|
898,065 |
|
|
|
|
|
|
Property
and equipment, net |
891,871 |
|
889,232 |
|
886,810 |
Marketable securities |
54,138 |
|
104,448 |
|
114,600 |
Deferred
income taxes and other assets |
83,300 |
|
85,944 |
|
89,290 |
Total Assets |
$ 1,876,535 |
|
$ 1,888,741 |
|
$ 1,988,765 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
$
190,542 |
|
$
156,090 |
|
$ 218,251 |
Accrued expenses, accrued compensation and other current
liabilities |
187,345 |
|
197,650 |
|
190,819 |
Total current liabilities |
377,887 |
|
353,740 |
|
409,070 |
Long-term
debt |
115,000 |
|
- |
|
- |
Deferred
rent and other liabilities |
211,979 |
|
207,032 |
|
201,712 |
Total Liabilities |
704,866 |
|
560,772 |
|
610,782 |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Preferred shares; $.0001 par value, 10,000,000 shares authorized,
none issued |
- |
|
- |
|
- |
Common shares; $.0001 par value, 200,000,000 shares authorized,
121,545,740, |
|
|
|
|
|
130,502,864 and 130,502,864 issued and outstanding
respectively |
12 |
|
13 |
|
13 |
Additional paid-in-capital |
- |
|
- |
|
3,870 |
Retained earnings |
1,184,308 |
1,343,383 |
|
1,380,801 |
Accumulated other comprehensive loss |
(12,651) |
|
(15,427) |
|
(6,701) |
Total Shareholders' Equity |
1,171,669 |
|
1,327,969 |
|
1,377,983 |
Total Liabilities and Shareholders' Equity |
$ 1,876,535 |
|
$ 1,888,741 |
|
$ 1,988,765 |
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
HUG#1967267
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