PHILADELPHIA, PA, November 22,
2016 - Urban Outfitters, Inc. (NASDAQ:URBN), a portfolio of global
consumer brands comprised of Anthropologie, Bhldn, Free People,
Terrain, Urban Outfitters and Vetri Family brands, today announced
net income of $47 million and $154 million for the three and nine
months ended October 31, 2016, respectively. Earnings per diluted
share were $0.40 and $1.31 for the three and nine months ended
October 31, 2016, respectively.
Total Company net sales for the
third quarter of fiscal 2017 increased 5% over the same quarter
last year to a record $862 million. Comparable Retail segment net
sales, which include our comparable direct-to-consumer channel,
increased 1.0%. Comparable Retail segment net sales increased 5.2%
at Urban Outfitters and decreased 1.5% at Free People and 2.7% at
the Anthropologie Group. Wholesale segment net sales increased 30%,
which benefited from approximately $9 million of shipments moving
out of the third quarter of fiscal 2016 into the fourth quarter of
fiscal 2016 due to delays at our recently opened east coast
fulfillment center
"I am pleased to announce our
teams delivered record third quarter sales," said Richard A. Hayne,
Chief Executive Officer. "These results were driven by the third
consecutive quarter of positive Retail segment 'comps' and
continued strength in our Wholesale segment," 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 |
2016 |
|
2015 |
|
2016 |
|
2015 |
Urban
Outfitters |
$ 348,471 |
|
$ 339,187 |
|
$1,001,197 |
|
$ 976,592 |
Anthropologie Group |
340,727 |
|
339,652 |
|
1,021,410 |
|
1,019,418 |
Free
People |
167,445 |
|
144,530 |
|
476,380 |
|
431,070 |
Food and
Beverage |
5,848 |
|
1,889 |
|
16,649 |
|
4,648 |
Total
Company |
$862,491 |
|
$ 825,258 |
|
$2,515,636 |
|
$ 2,431,728 |
|
|
|
|
|
|
|
|
Net sales by segment |
|
|
|
|
|
|
|
Retail
Segment |
$785,026 |
|
$ 765,525 |
|
$2,300,981 |
|
$ 2,246,274 |
Wholesale
Segment |
77,465 |
|
59,733 |
|
214,655 |
|
185,454 |
Total
Company |
$862,491 |
|
$ 825,258 |
|
$2,515,636 |
|
$ 2,431,728 |
For the three months ended October 31, 2016, the
gross profit rate decreased by 15 basis points versus the prior
year's comparable period. The reduction in gross profit rate
was primarily driven by the increased penetration of the
direct-to-consumer channel resulting in increased customer delivery
and overall logistics expense rates. Within gross profit,
maintained margins for the quarter were approximately flat compared
to the prior year comparable period with initial mark-up lower on a
year over year basis and markdowns coming in favorable on a year
over year basis. Initial mark-up was lower due to increased
penetration of the Wholesale segment sales at Free People which has
a lower initial mark-up compared to the Retail segment. Initial
mark-up in the Retail segment increased due to improvements at each
of the brands. Markdowns were favorable due to lower markdowns at
the Urban Outfitters brand which were partially offset by higher
markdowns at the Free People and Anthropologie brands. For
the nine months ended October 31, 2016, the gross profit rate
increased by 88 basis points versus the prior year's comparable
period. The increase in gross profit rate was primarily driven by
improvement in the Urban Outfitters brand maintained margins due to
lower merchandise markdowns compared to the prior year. This
increase was partially offset by a lower gross profit rate at the
Free People brand, which was primarily driven by lower maintained
margins due to higher merchandise markdowns.
As of October 31, 2016, total inventory increased
by $12 million, or 3%, on a year-over-year basis. The increase in
inventory is primarily due to an increase in non-comparable
inventory to support our new and expanded stores. Comparable Retail
segment inventory increased 1% at cost.
For the three and nine months
ended October 31, 2016, selling, general and administrative
expenses, expressed as a percentage of net sales, increased by 143
basis points and 114 basis points when compared to the prior year's
comparable periods, respectively. The deleverage in the three
months ended October 31, 2016 was partially due to the net effect
of one-time legal settlements, which accounted for approximately 50
basis points of deleverage. The remaining deleverage related
to an increase in direct store controllable expenses largely due to
pre-opening expenses and initial staffing levels for several large
format Anthropologie stores recently opened or opened in the
quarter. The deleverage in the nine months ended October 31,
2016 was primarily due to direct store controllable expenses to
support our 5% square footage growth and an increase in direct
marketing and technology related expenses to support our
direct-to-consumer growth.
The Company's effective tax rate
for the third quarter of fiscal 2017 was 33.5% compared to 35.3% in
the prior year period. The decrease in the third quarter tax
rate was due to the ratio of foreign taxable losses to global
taxable profits for the year. The effective tax rate for the first
nine months of fiscal 2017 is 35.7% compared to 35.3% in the first
nine months of fiscal 2016.
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 1.3
million common shares for approximately $46 million during the nine
months ended October 31, 2016. The Company repurchased and
subsequently retired a total of 12.7 million common shares for
approximately $382 million during fiscal 2016 under this
authorization. As of October 31, 2016, 6.0 million common shares
are remaining under this authorization.
On May 27, 2014, the
Company's Board of Directors authorized the repurchase of 10
million common shares under a share repurchase program. During
fiscal 2016, the Company repurchased and subsequently retired 2.3
million shares at a total cost of $83 million, which completed this
authorization.
During the nine months ended
October 31, 2016, the Company opened a total of 23 new stores
including: 11 Free People stores, 9 Anthropologie Group stores and
3 Urban Outfitters stores; and closed 3 stores including: 1 Free
People store, 1 Anthropologie Group store and 1 Urban Outfitters
store. During the nine months ended October 31, 2016, the Company
opened 2 new restaurants and acquired 6 Vetri Family restaurants
which are included in the Food and Beverage division.
Urban Outfitters, Inc. is a
portfolio of global consumer brands which offers a variety of
lifestyle merchandise and consumer products to highly defined
customer niches through 242 Urban Outfitters stores in the United
States, Canada, and Europe, catalogs and websites; 226
Anthropologie Group stores in the United States, Canada and Europe,
catalogs and websites; 124 Free People stores in the United States
and Canada, catalogs and websites; Free People wholesale, which
sells its product to approximately 1,800 specialty stores and
select department stores worldwide; and 11 Food and Beverage
restaurants, as of October 31, 2016.
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/qjw5enes
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
October 31, |
|
Nine Months Ended
October 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net
sales |
|
$862,491 |
|
$ 825,258 |
|
$2,515,636 |
|
$ 2,431,728 |
Cost
of sales |
|
562,594 |
|
537,070 |
|
1,611,337 |
|
1,579,014 |
Gross profit |
|
299,897 |
|
288,188 |
|
904,299 |
|
852,714 |
Selling, general, and administrative expenses |
|
229,592 |
|
207,863 |
|
665,299 |
|
615,584 |
Income from operations |
|
70,305 |
|
80,325 |
|
239,000 |
|
237,130 |
Other
income (expense), net |
|
854 |
|
63 |
|
348 |
|
(2,654) |
Income before income taxes |
|
71,159 |
|
80,388 |
|
239,348 |
|
234,476 |
Income
tax expense |
|
23,804 |
|
28,394 |
|
85,516 |
|
82,865 |
Net income |
|
$47,355 |
|
$ 51,994 |
|
$153,832 |
|
$ 151,611 |
|
|
|
|
|
|
|
|
|
Net
income per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ 0.41 |
|
$ 0.42 |
|
$ 1.31 |
|
$ 1.19 |
Diluted |
|
$ 0.40 |
|
$ 0.42 |
|
$ 1.31 |
|
$ 1.18 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares and |
|
|
|
|
|
|
|
|
common share equivalents outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
116,829,912 |
|
123,442,931 |
|
117,087,696 |
|
127,478,092 |
Diluted |
|
117,393,710 |
|
123,725,581 |
|
117,453,005 |
|
128,506,955 |
|
|
|
|
|
|
|
|
|
AS A
PERCENT OF NET SALES |
|
|
|
|
|
|
|
|
Net
sales |
|
100.0% |
|
100.0% |
|
100.0% |
|
100.0% |
Cost
of sales |
|
65.2% |
|
65.1% |
|
64.1% |
|
64.9% |
Gross profit |
|
34.8% |
|
34.9% |
|
35.9% |
|
35.1% |
Selling, general, and administrative expenses |
|
26.6% |
|
25.2% |
|
26.4% |
|
25.3% |
Income from operations |
|
8.2% |
|
9.7% |
|
9.5% |
|
9.8% |
Other
income (expense), net |
|
0.1% |
|
0.0% |
|
0.0% |
|
(0.2%) |
Income before income taxes |
|
8.3% |
|
9.7% |
|
9.5% |
|
9.6% |
Income
tax expense |
|
2.8% |
|
3.4% |
|
3.4% |
|
3.4% |
Net income |
|
5.5% |
|
6.3% |
|
6.1% |
|
6.2% |
URBAN OUTFITTERS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share and per share
data)
(unaudited)
|
|
October 31,
2016 |
|
January 31,
2016 |
|
October 31,
2015 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$234,886 |
|
$ 265,276 |
|
$ 149,597 |
Marketable securities |
|
24,644 |
|
61,061 |
|
69,545 |
Accounts receivable, net of allowance for doubtful
accounts
of $568, $664 and $675, respectively |
|
68,896 |
|
75,723 |
|
68,332 |
Inventory |
|
453,826 |
|
330,223 |
|
441,550 |
Prepaid expenses, deferred taxes and other current assets |
|
107,767 |
|
102,078 |
|
118,202 |
Total current assets |
|
890,019 |
|
834,361 |
|
847,226 |
Property and equipment, net |
|
872,309 |
|
863,137 |
|
891,871 |
Marketable securities |
|
5,605 |
|
36,600 |
|
54,138 |
Deferred income taxes and other assets |
|
117,258 |
|
99,203 |
|
83,300 |
Total Assets |
|
$1,885,191 |
|
$ 1,833,301 |
|
$ 1,876,535 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$199,421 |
|
$ 118,035 |
|
$ 190,542 |
Accrued expenses, accrued compensation and other current
liabilities |
|
205,812 |
|
211,196 |
|
187,345 |
Total current liabilities |
|
405,233 |
|
329,231 |
|
377,887 |
Long-term debt |
|
- |
|
150,000 |
|
115,000 |
Deferred rent and other liabilities |
|
232,325 |
|
216,843 |
|
211,979 |
Total Liabilities |
|
637,558 |
|
696,074 |
|
704,866 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred shares; $.0001 par value, 10,000,000 shares
authorized,
none issued |
|
- |
|
- |
|
- |
Common shares; $.0001 par value, 200,000,000 shares
authorized,
116,233,584, 117,321,120 and 121,545,740 shares issued
and
outstanding, respectively |
|
12 |
|
12 |
|
12 |
Additional paid-in capital |
|
- |
|
- |
|
- |
Retained earnings |
|
1,285,268 |
|
1,160,666 |
|
1,184,308 |
Accumulated other comprehensive loss |
|
(37,647) |
|
(23,451) |
|
(12,651) |
Total Shareholders' Equity |
|
1,247,633 |
|
1,137,227 |
|
1,171,669 |
Total Liabilities and Shareholders' Equity |
|
$1,885,191 |
|
$ 1,833,301 |
|
$ 1,876,535 |
Contact:
Oona McCullough
Director of Investor Relations
(215) 454-4806
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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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