Urban Outfitters, Inc. announced first quarter earnings of $16.9 million for the three months ended April 30, 2004, a 164% increase over the comparable quarter last year. First quarter diluted earnings per share rose to $0.41 this year versus $0.16 in the prior year.
As previously stated, net sales for the first quarter increased by 59% to a record $170.3 million. Fueling this increase over the prior year was a 32% jump in total Company comparable store sales, coupled with a 24% increase in the number of stores in operation, a 95% surge in direct-to-consumer sales, and a 47% rise in wholesale sales.
Comparable store sales at Anthropologie, Free People and Urban Outfitters were up 32%, 54% and 33%, respectively; or a combined 32% versus a 2% combined increase during the comparable quarter last year. New and non-comparable store sales increases for the quarter totaled $22.1 million.
“Our teams produced an exceptional quarter,” stated Richard A. Hayne, Chairman and President. “All of the performance metrics we look at were sharply positive. Sales and profits reached 'holiday-like' levels in the first quarter, with operating margins nearing 17%. We remain very optimistic about the summer season and even though sales comparisons become more difficult in this year's second quarter, 'comps' in the first few weeks of Q2 continue to run very significantly ahead of plan.”
For the three months, gross profit margins increased by 561 basis points versus the prior year's comparable quarter. These gains were primarily due to higher initial merchandise margins, decreased markdowns and the leveraging of occupancy expenses.
As of April 30, 2004, total Company inventories grew by $24.7 million on a year-over-year basis. The acquisition of inventory to stock new retail stores was the primary factor for this increase. On a comparable store basis, the Company had planned to expedite shipment and receipt of summer merchandise earlier than last year and increase its modestly planned inventory buy to accommodate the current sales trends. These measures have resulted in an 18% increase of comparable store inventory over last year's levels. The Company believes its inventory levels are adequate to meet the current rate of customer demand.
For the three months, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 110 basis points versus the comparable quarter last year. These improvements were primarily a result of the leveraging of store-related expenses.
Thus far this fiscal year, the Company has opened one new Anthropologie store and one new Urban Outfitters store. The Company plans to open approximately 10 additional new stores during the second quarter, and a total of 24 to 27 during the entire fiscal year.
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
Three Months Ended
April 30,
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2004 2003
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Net sales $170,290 $107,028
Cost of sales, including certain buying,
distribution and occupancy costs 100,396 69,095
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Gross profit 69,894 37,933
Selling, general and administrative
expenses 41,498 27,273
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Income from operations 28,396 10,660
Other income (expense), net (44) 84
-------------- -------------
Income before income taxes 28,352 10,744
Income tax expense 11,483 4,351
-------------- -------------
Net income $16,869 $6,393
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Net income per common share:
Basic $0.42 $0.16
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Diluted $0.41 $0.16
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Weighted average common shares
outstanding:
Basic 40,147,971 38,819,574
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Diluted 41,472,332 39,532,440
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PERCENT OF NET SALES
Net sales 100% 100%
Cost of sales, including certain buying,
distribution and occupancy costs 59.0 64.6
-------------- -------------
Gross profit 41.0 35.4
Selling, general and administrative
expenses 24.3 25.4
-------------- -------------
Income from operations 16.7 10.0
Other income (expense), net - 0.1
-------------- -------------
Income before income taxes 16.7 10.1
Income tax expense 6.8 4.1
-------------- -------------
Net income 9.9% 6.0%
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Three months ended
April 30,
2004 2003
--------- ---------
(in thousands)
Urban Outfitters store sales $78,566 $52,109
Anthropologie store sales 66,574 40,954
Direct-to-consumer sales 18,601 9,527
Free People sales 6,549 4,438
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Total net sales $170,290 $107,028
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