URBN - Urban Outfitters, my long term retail hold did well this quarter
Urban Outfitters Reports Record Second Quarter Results
PR Newswire, Thursday, August 19, 1999 at 09:35
PHILADELPHIA, Aug. 19 /PRNewswire/ -- Richard A. Hayne, Chairman of the
Board and President of Urban Outfitters, Inc. (NASDAQ:URBN), today announced
that comparable store sales increases of 19% for the second quarter has
enabled the Company to report a 98% increase in operating earnings for the
three months ended July 31, 1999.
Earnings for the quarter, after recording a $0.14 per share nonoperating
charge related to the Company's investment in MXG media, inc., increased by
19% to $4,097,000 versus $3,442,000 for the comparable quarter last year.
Diluted earnings per share were $0.23 for the quarter as compared to last
year's $0.19 per share, an increase of 21%.
Net sales for the three months were $67,976,000 versus $48,068,000 for the
same quarter last year, an increase of 41%. During the quarter, the Company
moved its catalog call center and order fulfillment process "in-house."
Anthropologie dropped 190,000 of the 2,000,000 copies of its Fall 1999 catalog
in July, and initial response has exceeded plan. Wholesale sales for the
quarter increased 25% over the comparable quarter last year.
Earnings for the six months ended July 31, 1999 increased to $7,047,000 or
$0.40 per share (on a diluted basis) versus $5,540,000 or $0.31 per share (on
a diluted basis) last year. Net sales for the six months increased to
$125,967,000 versus $87,452,000 last year, a 44% increase. Comparable store
sales for the six-month period increased by 18%.
Second Qtr. Six Months
FY 2000 FY 2000
(In thousands)
Retail store sales:
Store base $ 41,948 $ 73,134
Comp store increases 8,020 13,021
Impact of stores
opened since the
beginning
of the period 11,069 23,576
$ 61,037 $ 109,731
Direct response
(catalog and e-commerce) 1,691 5,439
Total retail segment $ 62,728 $ 115,170
Wholesale segment 5,248 10,797
Total net sales $ 67,976 $ 125,967
Thus far this fiscal year, the Company opened four new Urban Retail stores
and one new Anthropologie store. Management plans to open approximately six
new stores during the remainder of the fiscal year, bringing the number of new
stores for the year to eleven.
The Company's gross profit margins and margin rates for the quarter and
the six months increased versus the comparable periods in the prior year. The
gross profit improvement was due to: (1) higher initial markups in the retail
segment; (2) improved wholesale results; (3) continued leveraging of store
occupancy costs based on comparable store sales; and (4) ongoing distribution
efficiencies. Total inventories at July 31, 1999 increased by 15% versus the
comparable quarter end last year, principally attributable to additional
stores and an increase in comparable store inventories of 8%. Catalog
inventories increased substantially over last year's start up levels, while
wholesale inventories decreased by 30%, reflecting a lower level of prior
season inventory.
Selling, general and administrative expenses expressed as a percentage of
sales decreased to 23.1% versus 25.7% for the same quarter last year. The
comparable store sales gains resulted in the leveraging of operating expenses,
despite the additional costs of moving catalog operations "in-house".
Accordingly, as indicated above, operating income for the quarter
increased by 98% in dollars and from 11.2% of sales for last year to 15.6% of
sales this year. Operating income for the six months increased by 95% in
dollars and from 9.8% of sales for last year to 13.2% of sales this year.
Included in other income (expense) is a charge to earnings of $2.5 million
for the quarter and $3.5 million for the six months to recognize a required
accounting reserve for the Company's portion of operating losses relating to
its investment in MXG media, inc. ("MXG", formerly HMB Publishing, Inc.). MXG
is a development stage company which publishes a "magalog" and operates a
website -- www.MXGonline.com -- that caters to teenage girls. MXG has
accelerated its marketing efforts and website development by establishing
strategic advertising relationships with AOL, broadcast.com and iXL, along
with preparing to launch www.MXGtv.com . The Company has advanced additional
amounts during the quarter to fund this expansion. MXG has retained
E*OFFERING to assist in seeking an additional round of investment with third
parties to fund its growth plans. Based on the structure of this financing,
the level and timing of additional charges to be recognized by the Company for
the operating losses of MXG may vary.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler
which offers a variety of lifestyle merchandise to highly defined customer
niches through 36 Urban Retail stores in the United States, Canada and the
United Kingdom; 15 Anthropologie stores in the United States; an Anthropologie
catalog and website; and a wholesale subsidiary which sells to the Company's
retail operations, and to more than 1,300 specialty stores, catalogs and
department stores.
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 news release may constitute forward-looking statements. 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: industry competition factors, unavailability of suitable
retail space for expansion, difficulty in predicting and responding to fashion
trend shifts, seasonal fluctuations in gross sales, the departure of one or
more key senior managers and other risks identified in filings with the
Securities and Exchange Commission.
URBAN OUTFITTERS, INC.
Consolidated Statements of Income
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
1999 1998 1999 1998
Net sales $ 67,976 $48,068 $ 125,967 $87,452
Cost of sales,
including
certain buying,
distribution and
occupancy costs (1) 41,680 30,310 78,243 55,720
Gross profit 26,296 17,758 47,724 31,732
Selling, general
and administrative
expenses 15,664 12,376 31,080 23,184
Income from
operations 10,632 5,382 16,644 8,548
Other income
(expense), net (1,905) 452 (2,469) 842
Income before
income taxes 8,727 5,834 14,175 9,390
Income tax expense 4,630 2,392 7,128 3,850
Net income $4,097 $3,442 $7,047 $5,540
Net income per
common share:
Basic $0.23 $ 0.19 $0.40 $0.31
Diluted $0.23 $ 0.19 $0.40 $0.31
Weighted average common
shares outstanding:
Basic 17,463,954 17,782,063 17,477,153 17,738,988
Diluted 17,854,249 18,028,164 17,780,847 18,022,619
PERCENT OF SALES
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales,
including
certain buying,
distribution and
occupancy costs 61.3% 63.1% 62.1% 63.7%
Gross profit 38.7% 36.9% 37.9% 36.3%
Selling, general
and administrative
expenses 23.1% 25.7% 24.7% 26.5%
Income from
operations 15.6% 11.2% 13.2% 9.8%
Other income
(expense), net (2.8%) 0.9% (1.9%) 0.9%
Income before
income taxes 12.8% 12.1% 11.3% 10.7%
Income tax expense 6.8% 5.0% 5.7% 4.4%
Net income 6.0% 7.1% 5.6% 6.3%
(1) The Company has revised its manner of reporting gross margin to group
certain buying, distribution and occupancy costs with cost of goods
sold in order to enhance the comparability of its results with other
specialty apparel retailers. Prior period amounts have been
reclassified to conform to the current year's presentation.
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
July 31, 1999 January 31, 1999 July 31, 1998
Assets
Current assets:
Cash and cash equivalents $8,879 $25,165 $22,984
Marketable securities 10,188 13,032 11,732
Accounts receivable,
net of allowance for
doubtful accounts of $594,
$603 and $792 at
July 31, 1999,
January 31, 1999
and July 31, 1998,
respectively 6,176 4,824 4,681
Inventory 31,083 21,881 27,073
Prepaid expenses
and other current assets 7,040 6,653 7,607
Total current assets 63,366 71,555 74,077
Property and equipment,
less accumulated depreciation
and amortization 51,593 43,066 34,810
Marketable securities 17,294 12,218 11,882
Other assets 9,143 6,524 4,576
$141,396 $133,363 $125,345
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $17,285 $14,763 $17,650
Accrued expenses
and other current
liabilities 8,581 9,265 7,100
Total current liabilities 25,866 24,028 24,750
Capital lease obligations,
net of current portion 129 185 --
Accrued rent and
other liabilities 4,250 3,856 3,419
Total liabilities 30,245 28,069 28,169
Shareholders' equity:
Preferred shares;
$.0001 par, 10,000,000
authorized, none issued -- -- --
Common shares; $.0001 par,
50,000,000 shares authorized,
17,537,041 issued at
July 31, 1999, 17,639,754
issued at January 31, 1999,
and 17,784,954 issued at
July 31,1998, respectively 2 2 2
Additional paid-in capital 19,633 20,825 22,771
Retained earnings 91,981 84,934 74,714
Accumulated other
comprehensive income (465) (467) (311)
Total shareholders' equity 111,151 105,294 97,176
$141,396 $133,363 $125,345
(1) Derived from audited financial statements.
SOURCE Urban Outfitters, Inc.
-0- 08/19/99
/CONTACT: Stephen A. Feldman, Chief Financial Officer of Urban
Outfitters, 215-564-2313/
/Web site: anthropologie.com
mxgtv.com
Companies or Securities discussed in this article:
Symbol Name
NASDAQ:URBN Urban Outfitters |
