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Press release from GlobeNewswire (a Nasdaq OMX company)

Urban Outfitters Reports Record Q3 Sales

Monday, November 14, 2011

Urban Outfitters Reports Record Q3 Sales13:00 EST Monday, November 14, 2011PHILADELPHIA, Nov. 14, 2011 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (Nasdaq:URBN), a leading lifestyle specialty retail company operating under the Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands today announced net income of $50.7 million and $146.0 million for the three and nine months ended October 31, 2011, respectively. Earnings per diluted share were $0.33 for the quarter and $0.91 for the nine months ended October 31, 2011. For the third quarter of fiscal 2012, total company net sales increased 6% over the same quarter last year to $610 million. Comparable retail segment net sales, which include the direct-to-consumer channels, decreased 3% for the quarter, while comparable store net sales decreased 7% for the quarter. Comparable retail segment net sales at Free People increased 14%, were flat at Urban Outfitters, and decreased 7% at Anthropologie. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 13% for the quarter. "We have made progress in many categories during the quarter," said Chief Executive Officer, Glen T. Senk. "We anticipate additional improvements through continued product focus, aggressive inventory management and the organization changes we announced last week." Net sales by brand and channel for the three and nine month periods were as follows:  Three Months EndedNine Months Ended  October 31,October 31,Net sales by brand2011201020112010 Urban Outfitters $291,023 $265,993 $798,524 $719,730 Anthropologie 244,140 247,549 745,327 728,581 Free People 70,090 56,108 180,548 143,552 Other 4,700 3,942 18,754 13,849 Total Company $609,953 $573,592 $1,743,153 $1,605,712          Net sales by channel         Retail Stores $447,952 $433,425 $1,303,788 $1,227,621 Direct-to-consumer 123,120 105,670 338,028 288,508  Retail Segment 571,072 539,095 1,641,816 1,516,129 Wholesale Segment 38,881 34,497 101,337 89,583 Total Company $609,953 $573,592 $1,743,153 $1,605,712 For the three months ended October 31, 2011, gross profit margin percentage declined by 571 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving women's apparel inventory at both Anthropologie and Urban Outfitters, as well as occupancy deleverage caused by negative comparable store sales. For the nine months ended October 31, 2011, gross profit margin percentage declined by 507 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns noted above. As of October 31, 2011, total inventories grew by $78 million or 27%, on a year-over-year basis. Total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 18% at cost while total comparable store inventory increased by 13% at cost. The balance of the increase was driven by the acquisition of inventory to stock new retail stores. For the three months ended October 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 53 basis points versus the prior year comparable period due primarily to  the deleverage of direct selling and supervisory costs driven by negative comparable sales.  For the nine months ended October 31, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 60 basis points versus the prior year comparable period primarily due to ecommerce and related catalog investments, as well as, the deleverage of direct selling and supervisory costs driven by negative comparable store sales. On August 25, 2011, our Board of Directors approved a share repurchase program that authorized the repurchase of 10.0 million additional common shares subject to prevailing market conditions. During the three months ended October 31, 2011, the Company repurchased and retired 13.3 million common shares for approximately $322 million. During the nine months ended October 31, 2011, the Company repurchased and retired 20.5 million common shares for approximately $538 million. These repurchases completed the Company's 2010 and 2011 repurchase authorizations. As of October 31, 2011 no common shares were available for repurchase. During the nine months ended October 31, 2011, the Company opened a total of 36 new stores including: 13 Free People stores, 11 Anthropologie stores, 11 Urban Outfitters stores and 1 BHLDN store. Urban Outfitters, Inc. is an innovative specialty retail company which offers a variety of lifestyle merchandise to highly defined customer niches through 187 Urban Outfitters stores in the United States, Canada and Europe, catalogs and websites; 164 Anthropologie stores in the United States, Canada and Europe, catalogs and websites; Free People wholesale, which sells its product to approximately 1,400 specialty stores and select department stores; 55 Free People stores, catalogs and websites, 1 Terrain garden center and website and 1 BHLDN store and website as of October 31, 2011.  Management's third quarter commentary is located on our website at www.urbanoutfittersinc.com.   A conference call will be held today to discuss third quarter results and will be web cast at 5:00 pm. EST at: http://investor.urbn.com/phoenix.zhtml?c=115825&p=irol-irhomeThis 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," "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, and continuation of lowered levels of consumer spending resulting from the continuing worldwide economic downturn, 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, 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, potential difficulty liquidating certain marketable security investments 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,  2011201020112010           Net sales $609,953 $573,592 $1,743,153 $1,605,712 Cost of sales, including certain buying,           distribution and occupancy costs 393,850 337,599 1,102,595 934,152  Gross profit 216,103 235,993 640,558 671,560           Selling, general and administrative expenses 142,742 131,193 420,366 377,680  Income from operations 73,361 104,800 220,192 293,880 Other income, net 2,018 876 4,318 1,915  Income before income taxes 75,379 105,676 224,510 295,795 Income tax expense 24,700 32,570 78,514 98,075  Net income $50,679 $73,106 $145,996 $197,720           Net income per common share:           Basic $0.34 $0.44 $0.93 $1.18  Diluted $0.33 $0.43 $0.91 $1.16           Weighted average common shares and common          share equivalents outstanding:          Basic 151,170,175 165,699,540 157,313,818 167,808,729  Diluted 153,434,811 168,575,637 159,751,493 171,228,883                     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 64.6% 58.9% 63.2% 58.2%  Gross profit 35.4% 41.1% 36.8% 41.8% Selling, general and administrative expenses 23.4% 22.8% 24.2% 23.5%  Income from operations 12.0% 18.3% 12.6% 18.3% Other income, net 0.4% 0.1% 0.3% 0.1%  Income before income taxes 12.4% 18.4% 12.9% 18.4% Income tax expense 4.1% 5.7% 4.5% 6.1%  Net income 8.3% 12.7% 8.4% 12.3%  URBAN OUTFITTERS, INC.Condensed Consolidated Balance Sheets(in thousands, except share data) (unaudited)           October 31,January 31,October 31,  201120112010  Assets       Current assets:        Cash and cash equivalents  $83,370 $340,257 $253,546  Marketable securities  46,649 116,420 250,078  Accounts receivable, net of allowance for doubtful accounts        of $1,046, $1,015 and $1,538, respectively  46,830 36,502 47,653  Inventories  367,407 229,561 289,256  Prepaid expenses, deferred taxes and other current assets  64,074 81,237 59,073 Total current assets 608,330 803,977 899,606         Property and equipment, net  670,752 586,346 582,786 Marketable securities  129,146 351,988 186,202 Deferred income taxes and other assets  69,877 52,010 53,377 Total Assets  $1,478,105 $1,794,321 $1,721,971          Liabilities and Shareholders' Equity       Current liabilities:        Accounts payable  $134,480 $82,904 $114,967  Accrued expenses, accrued compensation and other current liabilities  130,590 128,120 123,061 Total current liabilities  265,070 211,024 238,028         Deferred rent and other liabilities  179,229 171,749 164,044 Total Liabilities  444,299 382,773 402,072         Shareholders' equity:         Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued – –  –  Common shares; $.0001 par value, 200,000,000 shares authorized,         144,201,664, 164,413,427 and 163,914,628 issued and outstanding respectively 15 17 17  Additional paid-in-capital  -- 27,603 10,165  Retained earnings  1,041,847 1,394,190 1,318,952  Accumulated other comprehensive loss  (8,056) (10,262) (9,235) Total Shareholders' Equity  1,033,806 1,411,548 1,319,899 Total Liabilities and Shareholders' Equity  $1,478,105 $1,794,321 $1,721,971CONTACT: Oona McCullough Director of Investor Relations (215) 454-4806