Urban Outfitters, Inc. reported earnings rose 92% in the fourth quarter to $78 million, or 45 cents a share. Fourth-quarter
comparable retail segment sales rose 9%, with total sales up 16% to
$589 million.

Comparable store sales rose 10%
and 11% at Anthropologie and Free People, respectively and were flat at
Urban Outfitters, for a combined comparable store sales increase of 4%.
Direct-to-consumer sales surged 28% reflecting strong growth across all
brands and wholesale sales continued to improve as compared to previous
quarterly trends, down 2% versus the same quarter last year. Total
Company net sales for the year ended January 31, 2010 increased 6%, to
a record $1.9 billion.

“We are delighted to announce a series of
record-breaking results for the quarter and year, including quarterly
earnings growth of 92% and a quarterly operating profit of 20%,” said
Glen T. Senk, Chief Executive Officer. “The sales and profit trend
improved in each quarter throughout 2009, and our current February
comp sales performance exceeded our fourth quarter comp. Our team
continued to exhibit exceptional discipline in managing expenses while
simultaneously making strategic investments in design, the supply
chain, technology, International, Direct-to-consumer and our newest
businesses, Terrain and Leifsdottir,” continued Mr. Senk.

For the fourth quarter ended January 31, 2010, gross
profit margin improved by 771 basis points, versus the prior year’s
comparable quarter. The increase was primarily due to significant
improvements in initial merchandise margins and a reduction in
merchandise markdowns. For the year ended January 31, 2010, gross
profit margin increased by 168 basis points versus the prior comparable
year. This increase was primarily due to improvements in initial
merchandise margins that were partially offset by a higher rate of
store occupancy expense driven by the decrease in comparable store
sales.

As of January 31, 2010, inventories increased by $16.4
million or 9.7% on a year-over-year basis. This increase was primarily
due to the acquisition of inventory to stock new retail stores. For the
quarter ended January 31, 2010, total comparable store inventories
decreased by 3% at cost.

For the fourth quarter ended January 31, 2010, selling,
general and administrative expenses, expressed as a percentage of net
sales, decreased by one basis point versus the prior year’s comparable
quarter. This reduction was primarily driven by cost control across all
areas of the business, with the most impact coming from direct store
related expenses. These reductions were partially offset by an increase
in incentive based compensation related to meeting annual performance
targets. For the year ended January 31, 2010, selling, general and
administrative expenses expressed as a percentage of net sales
increased by 51 basis points versus the prior comparable year. This
increase was related to an increase in incentive based compensation
partially offset by cost control across all other areas of the business
with direct store controllable representing the most significant
savings.

The Company’s annual effective tax rate for the year
ended January 31, 2010 was 36.2% versus 35.6% for the prior year. The
increase in the current year rate is primarily attributable to a lower
proportion of tax free interest income due to a strategic shift to a
mix of lower risk securities versus the prior year’s holdings. The
Company estimates that next year’s tax rate will be favorable to this
year’s annual rate and more comparable with the January 31, 2010 fourth
quarter effective rate of 35.9%. The Company expects a favorable change
in next year’s rate due in part to an increase in income generated from
foreign operations.

During the year ended January 31, 2010, the Company
opened a total of 33 new stores including: 13 Urban Outfitters stores,
16 Anthropologie stores including our first Anthropologie store in
Europe, and 4 Free People stores. The Company plans to open
approximately 45 new stores during Fiscal 2011.

Urban Outfitters has 155 Urban Outfitters stores in the
United States, Canada, and Europe; 2 websites and a catalog; 137
Anthropologie stores in the United States, Canada and Europe, a web
site and a catalog; Free People wholesale which sells its product to
approximately 1,400 specialty stores and select department stores; 34
Free People stores, a web site and catalog; Leifsdottir wholesale,
which sells its product to approximately 65 specialty and select
department stores; and one Terrain garden center as of January 31,
2010.

Net sales for the periods were as follows:

Three months ended Twelve months ended
January 31, January 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(in thousands) (in thousands)

Urban Outfitters
stores $ 227,858 $ 213,435 $ 760,133 $ 771,362
Anthropologie stores 211,740 172,098 704,849 642,161
Free People stores 11,738 9,588 38,752 32,907
Terrain 1,438 1,165 6,260 5,656
---------- ---------- ---------- ----------
Store net sales 452,774 396,286 1,509,994 1,452,086
---------- ---------- ---------- ----------
Direct-to-consumer 112,231 87,810 323,739 272,472
---------- ---------- ---------- ----------
Retail segment net
sales 565,005 484,096 1,833,733 1,724,558
---------- ---------- ---------- ----------
Wholesale 23,488 23,982 104,082 110,060
---------- ---------- ---------- ----------
Total net sales $ 588,493 $ 508,078 $1,937,815 $1,834,618
========== ========== ========== ==========

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


Quarter Ended Fiscal Year Ended
------------- -----------------
January 31, January 31,
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----

Net sales $ 588,493 $ 508,078 $ 1,937,815 $ 1,834,618
Cost of sales,
including
certain buying,
distribution
and occupancy
costs 342,832 335,186 1,151,670 1,121,140
----------- ----------- ----------- -----------
Gross profit 245,661 172,892 786,145 713,478
Selling, general
and
administrative
expenses 126,999 109,698 447,161 414,043
----------- ----------- ----------- -----------
Income from
operations 118,662 63,194 338,984 299,435
Other income, net 575 2,953 5,422 10,055
----------- ----------- ----------- -----------
Income before
income taxes 119,237 66,147 344,406 309,490
Income tax
expense 41,562 25,602 124,513 110,126
----------- ----------- ----------- -----------
Net income $ 77,675 $ 40,545 $ 219,893 $ 199,364
=========== =========== =========== ===========

Net income per
common share:
Basic $ 0.46 $ 0.24 $ 1.31 $ 1.20
=========== =========== =========== ===========
Diluted $ 0.45 $ 0.24 $ 1.28 $ 1.17
=========== =========== =========== ===========

Weighted average
common shares
and common share
equivalents
outstanding:
Basic 168,499,260 167,309,239 168,053,502 166,793,062
=========== =========== =========== ===========
Diluted 172,421,607 170,071,913 171,230,245 170,860,605
=========== =========== =========== ===========