PHILADELPHIA, PA, August 16, 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 $77 million and $106 million for the three and six
months ended July 31, 2016, respectively. Earnings per diluted
share were $0.66 and $0.91 for the three and six months ended July
31, 2016, respectively.
Total Company net sales for the
second quarter of fiscal 2017 increased 3% over the same quarter
last year to a record $891 million. Comparable Retail segment net
sales, which include our comparable direct-to-consumer channel,
increased 1%. Comparable Retail segment net sales increased 5% at
Urban Outfitters, was flat at Free People, and decreased 3% at the
Anthropologie Group. Wholesale segment net sales increased 4%.
"I am pleased to announce our
teams delivered record second quarter sales and earnings per
share," said Richard A. Hayne, Chief Executive Officer. "These
results were driven by a positive Retail segment 'comp' and
substantial improvement in merchandise margins," finished Mr.
Hayne.
Net sales by brand and segment for the three and
six month periods were as follows:
|
Three Months
Ended |
|
Six Months
Ended |
|
July 31, |
|
July 31, |
Net sales by brand |
2016 |
|
2015 |
|
2016 |
|
2015 |
Urban
Outfitters |
$ 354,260 |
|
$ 342,207 |
|
$ 653,560 |
|
$ 637,882 |
Anthropologie Group |
368,283 |
|
370,672 |
|
683,617 |
|
682,048 |
Free
People |
164,421 |
|
154,581 |
|
308,935 |
|
286,540 |
Other1 |
3,604 |
|
0 |
|
7,033 |
|
0 |
Total
Company |
$ 890,568 |
|
$ 867,460 |
|
$ 1,653,145 |
|
$ 1,606,470 |
|
|
|
|
|
|
|
|
Net sales by segment |
|
|
|
|
|
|
|
Retail
Segment |
$ 815,762 |
|
$ 795,740 |
|
$ 1,515,955 |
|
$ 1,480,749 |
Wholesale
Segment |
74,806 |
|
71,720 |
|
137,190 |
|
125,721 |
Total
Company |
$ 890,568 |
|
$ 867,460 |
|
$ 1,653,145 |
|
$ 1,606,470 |
1 Other
consists of Vetri Family restaurants that were acquired during the
first quarter of fiscal 2017. |
For the three and six months ended
July 31, 2016, the gross profit rate increased by 179 basis points
and 142 basis points versus the prior year's comparable periods,
respectively. The increase in gross profit rate for the three
months ended July 31, 2016 was primarily driven by improvement in
the Urban Outfitters and Anthropologie Group brands maintained
margins, with both brands delivering higher initial margins and
lower merchandise markdowns compared to the prior year. The
increase in gross profit rate for the six months ended July 31,
2016 was primarily driven by improvement in the Urban Outfitters
and Anthropologie Group brands maintained margins, with both brands
delivering lower merchandise markdowns compared to the prior year.
For the three and six months ended July 31, 2016, the 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 July 31, 2016, total
inventory decreased by $17 million, or 4%, on a year-over-year
basis. The decrease in total inventory is primarily related to the
decline in comparable Retail segment inventory, which decreased 4%
at cost.
For the three and six months ended
July 31, 2016, selling, general and administrative expenses,
expressed as a percentage of net sales, increased by 48 basis
points and 98 basis points when compared to the prior year's
comparable periods, respectively. The deleverage in both periods
was primarily due to an increase in direct marketing and technology
related expenses to support our direct-to-consumer growth and
direct store controllable expenses in order to support our 4%
square footage growth.
The Company's effective tax rate
for the second quarter of fiscal 2017 was 35.5% compared to 35.2%
in the prior year period. The effective tax rate for the
first half of fiscal 2017 is 36.7% compared to 35.4% in the first
half of fiscal 2016. The increase in the year-to-date tax
rate was due to the ratio of foreign taxable losses to global
taxable profits for the year.
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 0.3
million common shares for approximately $11 million during the six
months ended July 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.
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
six months ended July 31, 2015, the Company repurchased and
subsequently retired 2.3 million shares at a total cost of $83
million, which completed this authorization.
During the six months ended July
31, 2016, the Company opened a total of 12 new stores including: 8
Free People stores, 3 Anthropologie Group stores and 1 Urban
Outfitters store; and closed 3 stores including: 1 Free People
store, 1 Anthropologie Group store and 1 Urban Outfitters store.
During the six months ended July 31, 2016, the Company opened 1 new
Vetri Family restaurant and acquired 6 Vetri Family
restaurants.
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 240 Urban Outfitters stores in the United
States, Canada, and Europe, catalogs and websites; 220
Anthropologie Group stores in the United States, Canada and Europe,
catalogs and websites; 121 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 7 Vetri family restaurants,
as of July 31, 2016.
A conference call will be held today to discuss
second quarter results and will be webcast at 5:00 pm. ET at:
http://edge.media-server.com/m/p/6bkgzor3
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
July 31, |
|
Six Months Ended
July 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net
sales |
|
$ 890,568 |
|
$ 867,460 |
|
$ 1,653,145 |
|
$ 1,606,470 |
Cost
of sales |
|
548,057 |
|
549,355 |
|
1,048,743 |
|
1,041,944 |
Gross profit |
|
342,511 |
|
318,105 |
|
604,402 |
|
564,526 |
Selling, general, and administrative expenses |
|
224,299 |
|
214,354 |
|
435,707 |
|
407,721 |
Income from operations |
|
118,212 |
|
103,751 |
|
168,695 |
|
156,805 |
Other
income (expense), net |
|
1,071 |
|
(596) |
|
(506) |
|
(2,717) |
Income before income taxes |
|
119,283 |
|
103,155 |
|
168,189 |
|
154,088 |
Income
tax expense |
|
42,368 |
|
36,314 |
|
61,712 |
|
54,471 |
Net income |
|
$ 76,915 |
|
$ 66,841 |
|
$ 106,477 |
|
$ 99,617 |
|
|
|
|
|
|
|
|
|
Net
income per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ 0.66 |
|
$ 0.52 |
|
$ 0.91 |
|
$ 0.77 |
Diluted |
|
$ 0.66 |
|
$ 0.52 |
|
$ 0.91 |
|
$ 0.76 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares and |
|
|
|
|
|
|
|
|
common share equivalents outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
117,133,169 |
|
127,910,026 |
|
117,218,013 |
|
129,529,108 |
Diluted |
|
117,383,132 |
|
129,080,594 |
|
117,484,131 |
|
130,931,093 |
|
|
|
|
|
|
|
|
|
AS A
PERCENT OF NET SALES |
|
|
|
|
|
|
|
|
Net
sales |
|
100.0% |
|
100.0% |
|
100.0% |
|
100.0% |
Cost
of sales |
|
61.5% |
|
63.3% |
|
63.4% |
|
64.9% |
Gross profit |
|
38.5% |
|
36.7% |
|
36.6% |
|
35.1% |
Selling, general, and administrative expenses |
|
25.2% |
|
24.7% |
|
26.4% |
|
25.3% |
Income from operations |
|
13.3% |
|
12.0% |
|
10.2% |
|
9.8% |
Other
income (expense), net |
|
0.1% |
|
(0.1%) |
|
0.0% |
|
(0.2%) |
Income before income taxes |
|
13.4% |
|
11.9% |
|
10.2% |
|
9.6% |
Income
tax expense |
|
4.8% |
|
4.2% |
|
3.8% |
|
3.4% |
Net income |
|
8.6% |
|
7.7% |
|
6.4% |
|
6.2% |
URBAN OUTFITTERS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share and per share
data)
(unaudited)
|
|
July 31,
2016 |
|
January 31,
2016 |
|
July 31,
2015 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ 243,116 |
|
$ 265,276 |
|
$ 194,441 |
Marketable securities |
|
59,231 |
|
61,061 |
|
71,926 |
Accounts receivable, net of allowance for doubtful
accounts
of $876, $664 and $813, respectively |
|
95,003 |
|
75,723 |
|
70,014 |
Inventory |
|
367,197 |
|
330,223 |
|
384,404 |
Prepaid expenses, deferred taxes and other current assets |
|
94,663 |
|
102,078 |
|
118,678 |
Total current assets |
|
859,210 |
|
834,361 |
|
839,463 |
Property and equipment, net |
|
878,607 |
|
863,137 |
|
900,302 |
Marketable securities |
|
26,000 |
|
36,600 |
|
72,764 |
Deferred income taxes and other assets |
|
110,279 |
|
99,203 |
|
94,804 |
Total Assets |
|
$ 1,874,096 |
|
$ 1,833,301 |
|
$ 1,907,333 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ 134,825 |
|
$ 118,035 |
|
$ 134,673 |
Accrued expenses, accrued compensation and other current
liabilities |
|
222,352 |
|
211,196 |
|
218,604 |
Total current liabilities |
|
357,177 |
|
329,231 |
|
353,277 |
Long-term debt |
|
50,000 |
|
150,000 |
|
115,000 |
Deferred rent and other liabilities |
|
221,901 |
|
216,843 |
|
207,808 |
Total Liabilities |
|
629,078 |
|
696,074 |
|
676,085 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred shares; $.0001 par value, 10,000,000 shares
authorized,
none issued |
|
- |
|
- |
|
- |
Common shares; $.0001 par value, 200,000,000 shares
authorized,
117,136,520, 117,321,120 and 125,126,008 shares issued
and
outstanding, respectively |
|
12 |
|
12 |
|
13 |
Additional paid-in capital |
|
7,112 |
|
- |
|
- |
Retained earnings |
|
1,264,821 |
|
1,160,666 |
|
1,241,227 |
Accumulated other comprehensive loss |
|
(26,927) |
|
(23,451) |
|
(9,992) |
Total Shareholders' Equity |
|
1,245,018 |
|
1,137,227 |
|
1,231,248 |
Total Liabilities and Shareholders' Equity |
|
$ 1,874,096 |
|
$ 1,833,301 |
|
$ 1,907,333 |
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#2035553
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