PHILADELPHIA, PA, March 7, 2016 -
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 $73 million and $224 million for the three months and
year ended January 31, 2016, respectively. Earnings per
diluted share were $0.61 and $1.78 for the three months and year
ended January 31, 2016, respectively.
Total Company net sales for the fourth quarter of
fiscal 2016 were flat at $1.01 billion compared to the same quarter
last year. Comparable Retail segment net sales, which include our
comparable direct-to-consumer channel, decreased 2%. Comparable
Retail segment net sales increased 2% at Free People and decreased
2% at the Anthropologie Group and 3% at Urban Outfitters. Wholesale
segment net sales increased 29% partially due to delayed shipments
from the third quarter carrying over into the fourth
quarter.
For the year ended January 31, 2016, total Company net sales
increased to $3.4 billion or 4% over the prior year. Comparable
Retail segment net sales increased 2%. Wholesale segment net sales
increased 15%.
"While apparel sales underperformed during the
fourth quarter, I am pleased with the merchandise margin
improvement delivered by the brands," said Richard A. Hayne, Chief
Executive Officer. "Additionally, our expansion categories
performed above our expectations and continue to give us confidence
in our future growth opportunities," finished Mr. Hayne.
Net sales by brand and segment for the three and
twelve month periods were as follows:
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
January 31, |
|
January 31, |
|
Net
sales by brand |
2016 |
|
2015 |
|
2016 |
|
2015 |
Urban Outfitters |
$
415,830 |
|
$
438,369 |
|
$
1,393,328 |
|
$ 1,385,070 |
|
Anthropologie Group
1 |
419,094 |
|
420,045 |
|
1,442,254 |
|
1,407,216 |
|
Free People |
178,482 |
|
152,630 |
|
609,552 |
|
530,791 |
|
Total Company |
$ 1,013,406 |
|
$ 1,011,044 |
|
$ 3,445,134 |
|
$ 3,323,077 |
|
|
|
|
|
|
|
|
|
|
Net
sales by segment |
|
|
|
|
|
|
|
|
Retail Segment |
$
938,681 |
|
$
953,277 |
|
$
3,184,955 |
|
$ 3,097,274 |
|
Wholesale Segment |
74,725 |
|
57,767 |
|
260,179 |
|
225,803 |
|
Total Company |
$ 1,013,406 |
|
$ 1,011,044 |
|
$ 3,445,134 |
|
$ 3,323,077 |
|
|
|
|
|
|
|
|
|
|
1Anthropologie
Group consists of the Anthropologie, Bhldn and Terrain brands |
|
For the three months ended January
31, 2016, the gross profit rate declined by 12 basis points versus
the prior year's comparable period. The decline in gross
profit rate was driven by approximately 100 basis points of
deleverage in delivery and fulfillment center expense, primarily
related to the increased direct-to-consumer sales penetration and
the impact of the transition of our South Carolina fulfillment
center to Gap, Pennsylvania. Gross margin rate was further impacted
by additional deleverage related to higher store occupancy costs,
store impairment charges and the negative impact of foreign
currency. These decreases were almost entirely offset by
approximately 200 basis points of improvement in maintained margins
primarily driven by significant improvement in the Urban Outfitters
brand markdown rate.
During the three months ended
January 31, 2016, the Company incurred store impairment charges of
$9 million, with $7 million of this charge negatively affecting
gross profit and $2 million negatively affecting selling, general
and administrative expenses. The store impairment charges related
to four Urban Outfitters stores, three stores in Europe and one
store in the United States, and one Anthropologie store in
Canada.
For the year ended January 31,
2016, the gross profit rate declined by 47 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 incremental costs associated with the
Gap, Pennsylvania, fulfillment center transition, increased
direct-to-consumer sales penetration and store impairment
charges.
As of January 31, 2016, total
inventories decreased by $28 million, or 8%, on a year-over-year
basis. The decrease in total inventories is primarily related to
the decline in comparable Retail segment inventories, which
decreased 6% at cost and 8% in units.
For the three months ended January 31, 2016,
selling, general and administrative expenses, expressed as a
percentage of net sales, increased by 65 basis points when compared
to the prior year period. For the year ended January 31,
2016, selling, general and administrative expenses, expressed as a
percentage of net sales, increased 26 basis points when compared to
the prior year period. The increase in both periods is
primarily due to an increase in marketing expense to support our
customer acquisition and retention efforts and an increase in
technology related expenses used to support our omni-channel
initiatives.
The Company's effective tax rate for the fourth
quarter of fiscal 2016 was 36.9% compared to 35.0% in the prior
year period. The higher quarterly tax rate is primarily due to a
change in foreign and state tax positions.
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 12.7
million common shares for approximately $382.5 million during the
year ended January 31, 2016.
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 year ended January 31,
2016, 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.
In summary, for the year ended January 31, 2016,
the Company repurchased and subsequently retired a total of 15.0
million shares at a total cost of $465.3 million under both
authorizations.
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 January 31, 2016,
borrowings under the new revolving credit facility totaled $150
million. All borrowings under the revolving credit facility were
used to fund the repurchase of common shares of the Company.
During the year ended January 31, 2016, the
Company opened a total of 31 new stores including: 14 Anthropologie
Group stores, 13 Free People stores, and 4 Urban Outfitters stores;
and closed 5 stores including: 2 Urban Outfitters stores, 2
Anthropologie Group stores and 1 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;
218 Anthropologie Group stores in the United States, Canada and
Europe, catalogs and websites; 114 Free People stores in the United
States and Canada, catalogs and websites; and Free People
wholesale, which sells its product to approximately 1,800 specialty
stores and select department stores worldwide, as of January 31,
2016.
A conference call will be held today to discuss
fourth quarter results and will be webcast at 5:00 pm. ET at:
http://edge.media-server.com/m/p/b7rtu39y/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 |
|
Year
Ended |
|
|
January
31, |
|
January
31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ 1,013,406 |
|
$ 1,011,044 |
|
$ 3,445,134 |
|
$ 3,323,077 |
Cost
of sales |
664,218 |
|
661,407 |
|
2,243,232 |
|
2,148,147 |
Gross profit |
349,188 |
|
349,637 |
|
1,201,902 |
|
1,174,930 |
Selling, general and administrative expenses |
232,739 |
|
225,655 |
|
848,323 |
|
809,545 |
Income from operations |
116,449 |
|
123,982 |
|
353,579 |
|
365,385 |
Other
expense, net |
(894) |
|
(375) |
|
(3,548) |
|
(1,935) |
Income before income taxes |
115,555 |
|
123,607 |
|
350,031 |
|
363,450 |
Income
tax expense |
42,677 |
|
43,309 |
|
125,542 |
|
131,022 |
Net income |
$ 72,878 |
|
$ 80,298 |
|
$ 224,489 |
|
$ 232,428 |
|
|
|
|
|
|
|
|
Net
income per common share: |
|
|
|
|
|
|
|
Basic |
$ 0.61 |
|
$ 0.61 |
|
$ 1.79 |
|
$ 1.70 |
Diluted |
$ 0.61 |
|
$ 0.60 |
|
$ 1.78 |
|
$ 1.68 |
|
|
|
|
|
|
|
|
Weighted average common shares and common |
|
|
|
|
|
|
|
share equivalents outstanding: |
|
|
|
|
|
|
|
Basic |
118,568,962 |
|
132,053,126 |
|
125,232,499 |
|
136,651,899 |
Diluted |
118,606,002 |
|
132,980,947 |
|
126,013,414 |
|
138,192,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS A
PERCENT OF NET SALES |
|
|
|
|
|
|
|
Net
sales |
100.0% |
|
100.0% |
|
100.0% |
|
100.0% |
Cost
of sales |
65.5% |
|
65.4% |
|
65.1% |
|
64.6% |
Gross profit |
34.5% |
|
34.6% |
|
34.9% |
|
35.4% |
Selling, general and administrative expenses |
23.0% |
|
22.3% |
|
24.6% |
|
24.4% |
Income from operations |
11.5% |
|
12.3% |
|
10.3% |
|
11.0% |
Other
expense, net |
(0.1%) |
|
(0.1%) |
|
(0.1%) |
|
(0.1%) |
Income before income taxes |
11.4% |
|
12.2% |
|
10.2% |
|
10.9% |
Income
tax expense |
4.2% |
|
4.3% |
|
3.7% |
|
3.9% |
Net income |
7.2% |
|
7.9% |
|
6.5% |
|
7.0% |
URBAN OUTFITTERS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share and per share
data)
(unaudited)
|
|
|
|
|
January 31,
2016 |
|
January 31,
2015 |
|
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ 265,276 |
|
$ 154,558 |
|
Marketable securities |
61,061 |
|
104,246 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
|
|
|
of
$664 and $850, respectively |
75,723 |
|
70,458 |
|
Inventory |
330,223 |
|
358,237 |
|
Prepaid expenses, deferred taxes and other current assets |
102,078 |
|
121,618 |
|
Total current assets |
834,361 |
|
809,117 |
|
|
|
|
|
|
Property
and equipment, net |
863,137 |
|
889,232 |
|
Marketable securities |
36,600 |
|
104,448 |
|
Deferred
income taxes and other assets |
99,203 |
|
85,944 |
|
Total Assets |
$ 1,833,301 |
|
$ 1,888,741 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
$ 118,035 |
|
$ 156,090 |
|
Accrued expenses, accrued compensation and other current
liabilities |
211,196 |
|
197,650 |
|
Total current liabilities |
329,231 |
|
353,740 |
|
|
|
|
|
|
Long-term
debt |
150,000 |
|
- |
|
Deferred
rent and other liabilities |
216,843 |
|
207,032 |
|
Total Liabilities |
696,074 |
|
560,772 |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Preferred shares; $.0001 par value, 10,000,000 shares authorized,
none issued |
- |
|
- |
|
Common shares; $.0001 par value, 200,000,000 shares authorized,
117,321,120 an |
|
|
|
|
and 130,502,864 issued and outstanding, respectively |
12 |
|
13 |
|
Additional paid-in-capital |
- |
|
- |
|
Retained earnings |
1,160,666 |
1,343,383 |
|
Accumulated other comprehensive loss |
(23,451) |
|
(15,427) (157427) |
|
Total Shareholders' Equity |
1,137,227 |
|
1,327,969 |
|
Total Liabilities and Shareholders' Equity |
$ 1,833,301 |
|
$ 1,888,741 |
|
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#1992514
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