Urban Outfitters, Inc. announced net income for the fourth quarter increased by 45% to $8.4 million or $0.42 per diluted share versus $5.8 million or $0.33 per diluted share for the comparable quarter last year.

Net income for the twelve months ended January 31, 2003 increased by 83% to $27.4 million or $1.41 per diluted share versus $15.0 million or $0.86 per diluted share for the comparable twelve months last year.

Net sales for the quarter totaled $117.6 million, a 13% increase compared to the same quarter last year. Of the $13.7 million increase, $11.4 million resulted from sales at noncomparable and new stores. Comparable store sales increased $1.2 million or 1% versus an 8% increase last year. Comparable store sales were up 4% at Urban Retail and were down 3% at Anthropologie Retail, as compared to increases of 3% and 17%, respectively, for the prior year. Direct-to-consumer sales increased $1.5 million or 18% for the quarter. Free People sales during the quarter decreased $0.4 million or 12%.

Net sales for the twelve months ended January 31, 2003, increased by 21% to $422.8 million from $349.0 million for the comparable twelve months last year. Over half of the $73.8 million increase resulted from sales at noncomparable and new stores. Comparable store sales increased $25.7 million or 9%: a 7% increase at Urban Retail and a 12% increase at Anthropologie Retail. Direct-to-consumer sales increased $6.9 million or 28%. Free People sales were flat for the twelve months.

“We are very pleased to have delivered an 83% increase in bottom line performance last year. All aspects of the income statement improved – sales were up nicely, margins improved significantly and expenses leveraged,” said Mr. Hayne.

“We are pleased, but not complacent,” Mr. Hayne continued, “We have a lot of room to post even better results this year. Our goal is to produce modest single digit comps this year following last year’s 9% gain. We expect most of the increase to come in the second half of the year.”

Net sales were as follows:

                               Three months ended  Twelve months ended
                                   January 31,         January 31,
                                 (in thousands)      (in thousands)
                                 2003      2002      2003      2002
                               --------- --------- --------- ---------
Urban Outfitters store sales    $59,400   $53,530  $213,990  $184,998
Anthropologie store sales        46,160    39,421   158,737   120,878
Direct-to-consumer sales          9,373     7,923    31,747    24,815
Free People sales                 2,640     2,996    18,280    18,267
                               --------- --------- --------- ---------
  Total net sales              $117,573  $103,870  $422,754  $348,958
                               ========= ========= ========= =========

During the fiscal year, the Company opened thirteen new retail stores: eight Anthropologie stores, four Urban Outfitters stores and the first Free People store.

Gross profit margins increased to 37.2% of net sales in the fourth quarter of fiscal 2003 versus 33.6% in last year’s comparable period. For the full fiscal year, gross profit increased to 35.7% of net sales compared to 32.6% for the twelve months in fiscal 2002. For both the quarter and the year, initial margins improved, markdowns decreased and the rate of shrinkage abated. Total inventories at January 31, 2003 increased by 19%. Comparable store inventories increased by 6%, in line with the Company’s plan. As of year end, total Company inventory was more current than the previous year.

Selling, general and administrative expenses, expressed as a percentage of net sales, increased to 25.6% for the fourth quarter of fiscal 2003 versus 24.3% for the fourth quarter of fiscal 2002. This increase was due to the timing impact of more new store openings and start-up costs of the new Free People retail store, as well as increased marketing costs related to the Direct businesses. Selling, general and administrative expenses, expressed as a percentage of net sales, decreased to 25.0% for the twelve months of fiscal 2003 versus 25.3% for the twelve months of fiscal 2002.

                        URBAN OUTFITTERS, INC.
              Condensed Consolidated Statements of Income
            (in thousands, except share and per share data)
                              (Unaudited)

                        Three Months Ended      Twelve Months Ended
                             January 31,             January 31,
                          2003        2002        2003        2002
                       ----------- ----------- ----------- -----------

Net sales                $117,573    $103,870    $422,754    $348,958
Cost of sales,
 including certain
 buying, distribution
 and occupancy costs       73,883      68,971     271,963     235,311
                       ----------- ----------- ----------- -----------
          Gross profit     43,690      34,899     150,791     113,647
Selling, general and
 administrative
 expenses                  30,099      25,265     105,392      88,149
                       ----------- ----------- ----------- -----------
          Income from
           operations      13,591       9,634      45,399      25,498
Other income (expense),
 net                          489          65         674        (276)
                       ----------- ----------- ----------- -----------
          Income before
           income taxes    14,080       9,699      46,073      25,222
Income tax expense          5,703       3,928      18,660      10,215
                       ----------- ----------- ----------- -----------
          Net income       $8,377      $5,771     $27,413     $15,007