URBN, An earnings play from last quarter beat estimates by .05
This stock was under 15 a month ago, and has been under accumulation recently.
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URBN
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Thursday May 20, 8:43 am Eastern Time
Company Press Release
SOURCE: Urban Outfitters, Inc.
Urban Outfitters Reports First Quarter Results
PHILADELPHIA, May 20 /PRNewswire/ -- Richard A. Hayne, Chairman of the Board and President of Urban Outfitters, Inc. (Nasdaq: URBN - news), today announced record earnings for the first quarter that ended on April 30, 1999.
Earnings for the quarter increased by 40% to $2,950,000 versus $2,100,000 for the comparable quarter last year. Diluted earnings per share were $0.17 for the quarter as compared to last year's $0.12 per share, an increase of 42%.
Net sales for the three months were $57,991,000 versus $39,383,000 for the same quarter last year, an increase of 47%. Comparable store sales for the first quarter increased by 17%. The Company's catalog circulation during the quarter was approximately 2.2 million versus 325,000 for the test mailing in the comparable quarter last year. Anthropologie's e-commerce sales, which began in December 1998, have grown rapidly throughout the quarter and are currently at a rate of 10% of total direct response sales.
First Quarter
FY 2000
(In thousands)
Retail store sales:
FY 1998 store base $33,070
Comp store increases 5,485
Impact of stores opened since February 1, 1998 10,140
Total $48,695
Direct response (catalog and e-commerce) 3,749
Total retail segment $52,444
Wholesale sales 5,547
Total net sales $57,991
The Company continued its more aggressive store expansion program begun last year by opening three new stores during the quarter: two Urban Retail locations in Burlington, Vermont and Los Angeles, California and one Anthropologie store in Chestnut Hill, Massachusetts. Management plans to open approximately eight additional stores during the remainder of the current fiscal year.
The Company's gross profit margins and margin rates for the quarter increased versus the comparable quarter in the prior year. The gross profit improvement was due to: (1) higher initial markups in the retail segment, accompanied by lower markdown requirements as a result of strong sales performance; (2) occupancy cost leveraging based on comparable store sales increases; and (3) distribution efficiencies. These favorable factors were offset, in part, by investments in merchandising personnel and a decrease in Wholesale division margin.
Selling, general and administrative expenses expressed as a percentage of sales decreased to 26.6% compared to 27.5% for the same quarter last year. The comparable store sales gains and the increase in catalog sales resulted in leveraging of operating expenses.
Accordingly, operating income for the quarter increased by 90% in dollars and from 8.0% of sales in FY 1999 to 10.4% this year.
The change in other income (expense) is primarily attributable to a required charge to earnings to recognize a reserve for the Company's portion of operating losses relating to its investment in MXG media, inc. (''MXG'', formerly HMB Publishing, Inc.). MXG media, inc. is a development stage company which publishes a ''magalog'' and operates a website -- mxgonline.com -- that caters to teenage girls. Management is pleased with MXG's accelerated marketing efforts and website development and has advanced additional amounts to facilitate MXG's expansion. MXG is currently negotiating an additional round of investment with third parties to fund its growth plans. The implicit valuations by these potential investors attribute no decline to the value of the Company's investment. The Company anticipates, however, that the accounting rules regarding the operating losses of MXG will require additional charges be recognized by the Company in subsequent periods. In addition, other income (expense) reflects a decrease in interest income due to decreases in average investable balances and decreased rates versus the prior year.
Total inventories at April 30, 1999 increased by 20% versus the comparable quarter end last year, principally attributable to additional stores. Comparable store inventories increased by 6%. Catalog inventories increased substantially over last year's modest test level and wholesale inventories decreased by 46% due to liquidation of prior season merchandise.
In accordance with its previously announced stock buyback program, the Company repurchased 371,545 shares of its common stock during the quarter in a series of individual open market transactions at a cost of approximately $5 million.
Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 34 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. |
