Urban Outfitters Q1 Net Income Up 34% on 14% Sales Gain

Urban Outfitters, Inc. announced net income for the first quarter ended April 30, 2003 increased by 34% to $6.4 million or $0.32 per diluted share versus $4.8 million or $0.26 per diluted share for the comparable first quarter last year.

“We had outstanding results this past quarter,” said Mr. Hayne. “We are very pleased to deliver positive “comp” store sales and a 34% increase in bottom line performance. Our retail brands, Urban Outfitters and Anthropologie, have never been stronger. The summer apparel assortments have been well received, and May sales, thus far, continue to modestly exceed our plan.”

Net sales for the quarter totaled $107.0 million, a 14% increase compared to the same quarter last year. Of the $12.9 million increase, $9.1 million resulted from sales at noncomparable and new stores. Comparable store sales increased $1.5 million or 2% versus an 18% increase last year. Comparable store sales were up 5% at Urban Retail and were down 2% at Anthropologie Retail, as compared to increases of 12% and 27%, respectively, for the comparable period. Direct-to-consumer sales jumped $2.4 million or 35% for the quarter.

Net sales were as follows:

                                Three months ended April 30,
                                    2003           2002
                                -------------- --------------
                                       (in thousands)

Urban Outfitters store sales          $52,109        $45,788
Anthropologie store sales              40,954         36,615
Direct-to-consumer sales                9,527          7,082
Free People sales                       4,438          4,589
                                -------------- --------------
  Total net sales                    $107,028        $94,074
                                ============== ==============

Gross profit margins increased to 35.4% of net sales in the first quarter of fiscal 2004 versus 34.2% in last year’s comparable period. This gain was primarily due to the higher initial margins associated with the continued growth of private label and better sourcing of apparel merchandise. Total inventories at April 30, 2003 increased by 27.5%. Comparable store inventories increased by 7.8%, consistent with the Company’s plan.

Selling, general and administrative expenses, expressed as a percentage of net sales were 25.4% compared to last year’s 25.5%. The continuing cost controls in place more than offset the costs associated with the successful testing of a catalog at Urban Direct.

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

                                                Three Months Ended
                                                     April 30,
                                                  2003        2002
                                               ----------- -----------

Net sales                                        $107,028     $94,074
Cost of sales, including certain buying,
  distribution and occupancy costs                 69,095      61,904
                                               ----------- -----------
          Gross profit                             37,933      32,170
Selling, general and administrative expenses       27,273      24,002
                                               ----------- -----------
          Income from operations                   10,660       8,168
Other income (expense), net                            84        (177)
                                               ----------- -----------
          Income before income taxes               10,744       7,991
Income tax expense                                  4,351       3,236
                                               ----------- -----------
          Net income                               $6,393      $4,755