Urban Outfitters, Inc. announced record earnings of $31.7 million for the fourth quarter ended January 31, 2005, a 72% increase over the comparable quarter last year. Fourth quarter diluted earnings per share rose to 38 cents this year versus 22 cents in the prior year.
Net sales for the fourth quarter increased by 43% to a record $251.6 million. Fueling this increase over the prior year was:
-- New and noncomparable store sales increases of $40.5 million -- A 13% increase in total Company comparable store sales -- A 69% rise in direct-to-consumer sales -- A 106% jump in wholesale sales
Comparable store sales at Anthropologie, Free People, and Urban Outfitters were up 17%, 58% and 10%, respectively, for a combined 13% increase versus a combined 21% comp increase for the same quarter last year.
“It is gratifying to be able to report such exceptional results for both the quarter and year,'' said Richard A. Hayne, Chairman and President. “In each quarter this past year, we produced strong double-digit 'comp' store sales gains while improving margins and leveraging SG&A expenses. In addition, we opened twenty-eight new stores and produced exceptional growth in both our direct-to-consumer and wholesale businesses. Each of our three brands strengthened their brand positions during the year and delivered results that produced record sales and earnings for the company and record value for our shareholders.''
“Looking forward,'' Mr. Hayne added, “customer reaction to our spring assortments at all of our brands are strong, and February comparable store sales continued to significantly exceed our plan. As such, we remain cautiously optimistic about our spring results.''
Net sales for the periods were as follows:
Three months ended Twelve months ended
January 31, January 31,
2005 2004 2005 2004
---- ---- ---- ----
(in thousands) (in thousands)
Urban Outfitters
store sales $112,241 $ 83,492 $384,371 $267,641
Anthropologie
store sales 98,814 69,451 320,621 211,144
Direct-to-
consumer sales 33,434 19,723 93,913 51,144
Free People
sales 7,134 3,457 28,845 18,432
-------- -------- -------- --------
Total net sales $251,623 $176,123 $827,750 $548,361
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For the quarter and twelve months, gross profit margins increased by 148 and 293 basis points, respectively, versus the comparable prior year periods. These gains were primarily due to higher initial merchandise margins and the leveraging of occupancy expenses.
As of January 31, 2005, total company inventories grew by $35.7 million on a year-over-year basis. The acquisition of inventory to stock new retail stores was the primary factor in this increase. On a comparable store basis, inventories grew by 19.8% versus the prior year. The company believes this inventory position is appropriate to meet existing demand and the comparable inventory increase is primarily a product of last year's inventory attrition due to the extraordinary comparable store sales performance experienced during the fourth quarter.
For the quarter and twelve months, selling, general and administrative expenses, expressed as a percentage of sales, decreased by 91 and 121 basis points, respectively, versus the same periods of the prior year. These improvements were primarily a result of the leveraging of store-related expenses.
During the year ended January 31, 2005, the company opened 13 new Anthropologie stores, 14 new Urban Outfitters stores and 1 Free People store or 28 new stores in total. The company plans to open 30 to 32 new stores, including 2 to 3 new Free People stores, during the current fiscal year.
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
Three Months Ended Twelve Months Ended
January 31, January 31,
------------------- -------------------
2005 2004 2005 2004
------ ------ ------ ------
Net sales $ 251,623 $ 176,123 $ 827,750 $ 548,361
Cost of sales,
including
certain buying,
distribution
and occupancy
costs 143,506 103,042 481,263 334,888
----------- ----------- ----------- -----------
Gross profit 108,117 73,081 346,487 213,473
Selling, general
and
administrative
expenses 57,712 42,014 190,384 132,767
----------- ----------- ----------- -----------
Income from
operations 50,405 31,067 156,103 80,706
Other income
(expense), net 948 (94) 1,826 598
----------- ----------- ----------- -----------
Income before
income taxes 51,353 30,973 157,929 81,304
Income tax
expense 19,615 12,544 62,778 32,928
----------- ----------- ----------- -----------
Net income $ 31,738 $ 18,429 $ 95,151 $ 48,376
=========== =========== =========== ===========
Net income per
common share:
Basic $ 0.39 $ 0.23 $ 1.18 $ 0.62
=========== =========== =========== ===========
Diluted $ 0.38 $ 0.22 $ 1.14 $ 0.60
=========== =========== =========== ===========
Weighted average
common shares
outstanding:
Basic 81,349,760 79,384,036 80,709,949 78,534,926
=========== =========== =========== ===========
Diluted 84,582,132 82,315,342 83,651,725 80,831,138
=========== =========== =========== ===========
PERCENT OF NET
SALES
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales,
including
certain buying,
distribution
and occupancy
costs 57.0 58.5 58.1 61.1
------ ------ ------ ------
Gross profit 43.0 41.5 41.9 38.9
Selling, general
and
administrative
expenses 23.0 23.9 23.0 24.2
------ ------ ------ ------
Income from
operations 20.0 17.6 18.9 14.7
Other income
(expense), net 0.4 -- 0.2 0.1
------ ------ ------ ------
Income before
income taxes 20.4 17.6 19.1 14.8
Income tax
expense 7.8 7.1 7.6 6.0
------ ------ ------ ------
Net income 12.6% 10.5% 11.5% 8.8%
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