• URBN Reports Q1 Results

    المصدر: Nasdaq GlobeNewswire / 24 مايو 2022 16:05:00   America/New_York

    PHILADELPHIA, May 24, 2022 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands comprised of the Anthropologie, BHLDN, Free People, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands, today announced net income of $32 million and earnings per diluted share of $0.33 for the three months ended April 30, 2022.

    Total Company net sales for the three months ended April 30, 2022, increased 13.4% over the same period last year to a record $1.05 billion. Total Retail segment net sales increased 12%, with comparable Retail segment net sales increasing 11%. The relative proportion of Retail segment sales attributable to store and digital channels changed significantly due in large part to the temporary store closures and occupancy restrictions in the United States, Europe and Canada in the prior year quarter due to the COVID-19 pandemic. With those restrictions not present in the current year quarter, Retail segment comparable sales increased due to double-digit growth in retail store sales due to increased store traffic, partially offset by mid-single-digit negative digital channel sales. By brand, comparable Retail segment net sales increased 18% at the Anthropologie Group, 15% at the Free People Group and 1% at Urban Outfitters. Wholesale segment net sales increased 6%, driven by a 9% increase in Free People Group wholesale sales. Nuuly segment net sales increased by $15.0 million driven by a significant increase in our subscriber base.

    “We are pleased to announce record Q1 sales driven by an 11% Retail segment ‘comp’,” said Richard A. Hayne, Chief Executive Officer. “Unfortunately, the impact of inflation on our costs of doing business more than offset the benefit of record revenues,” finished Mr. Hayne.

    Net sales by brand and segment for the three-month periods were as follows:

     Three Months Ended
     April 30,
     2022 2021
    Net sales by brand     
    Anthropologie Group$419,677 $353,567
    Urban Outfitters 357,702  349,681
    Free People Group 245,758  212,751
    Nuuly 22,849  7,820
    Menus & Venues 5,948  3,596
    Total Company$1,051,934 $927,415
          
    Net sales by segment     
    Retail Segment$963,435 $857,486
    Wholesale Segment 65,650  62,109
    Nuuly Segment 22,849  7,820
    Total Company$1,051,934 $927,415

    For the three months ended April 30, 2022, the gross profit rate decreased by 169 basis points compared to the three months ended April 30, 2021. Gross profit dollars increased 7.5% to $323.3 million compared to the three months ended April 30, 2021. The decrease in gross profit rate was primarily due to lower initial merchandise markups driven largely by higher inbound transportation expenses and raw materials costs.

    As of April 30, 2022, total inventory increased by $152.2 million, or 31.9%, compared to total inventory as of April 30, 2021, and Retail segment comparable inventory at cost increased by 35%, which were driven by three factors. First, inventory costs have increased due to higher product costs driven largely by higher inbound transportation expenses and raw materials costs. Second, due to ongoing global supply chain constraints, we are extending our lead times and holding more inventory. Finally, the Urban Outfitters brand’s sales came in lower than planned resulting in increased inventory levels at this point in time.

    For the three months ended April 30, 2022, selling, general and administrative expenses increased by $49.9 million, or 22.0%, compared to the three months ended April 30, 2021, and expressed as a percentage of net sales, deleveraged 184 basis points. The deleverage in SG&A as a rate to sales and growth in SG&A dollars was primarily related to the increased penetration of retail store sales in the current year quarter as we incurred store payroll expenses to support the retail store sales growth.

    The Company’s effective tax rate for the three months ended April 30, 2022, was 28.7% compared to 27.0% in the three months ended April 30, 2021. The increase in the effective tax rate for the three months ended April 30, 2022, was primarily driven by the ratio of foreign taxable earnings to global taxable earnings.

    Net income for the three months ended April 30, 2022, was $32 million and earnings per diluted share were $0.33.

    On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a new share repurchase program. During the three months ended April 30, 2022, the Company repurchased and subsequently retired 2.4 million common shares for approximately $62 million. As of April 30, 2022, 21.5 million common shares were remaining under the programs.

    During the three months ended April 30, 2022, the Company opened a total of five new retail locations including: two Free People Group stores (including one FP Movement store), two Urban Outfitters stores and one Menus & Venues restaurant; and closed three retail locations including: one Free People Group store, one Urban Outfitters store and one Anthropologie Group store. During the three months ended April 30, 2022, two Urban Outfitters franchisee-owned stores and one Anthropologie Group franchisee-owned store were opened.

    Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 262 Urban Outfitters stores in the United States, Canada and Europe and websites; 237 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 174 Free People stores in the United States, Canada and Europe, catalogs and websites, 11 Menus & Venues restaurants, 4 Urban Outfitters franchisee-owned stores and 2 Anthropologie Group franchisee-owned stores as of April 30, 2022. Free People, FP Movement and Urban Outfitters wholesale sell their products through department and specialty stores worldwide, digital businesses and the Company’s Retail segment.

    A conference call will be held today to discuss first quarter results and will be webcast at 5:15 pm. ET at: https://edge.media-server.com/mmc/p/rorxqy7f

    This news release is being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Certain matters contained in this release may contain forward-looking statements. When used in this release, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: the impacts of public health crises such as the coronavirus (COVID-19) pandemic, overall economic and market conditions (including inflation) and worldwide political events and the resultant impact on consumer spending patterns, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom's withdrawal from membership in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war (including geopolitical instability), terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises, increases in labor costs, increases in raw material costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs, border adjustment taxes or increases in duties or quotas), the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.

    (Tables follow)

       
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Statements of Income
    (amounts in thousands, except share and per share data)
    (unaudited)
       
     Three Months Ended 
     April 30, 
     2022  2021 
            
    Net sales$1,051,934  $927,415 
    Cost of sales 728,633   626,764 
    Gross profit 323,301   300,651 
    Selling, general and administrative expenses 277,064   227,148 
    Income from operations 46,237   73,503 
    Other loss, net (1,989)  (155)
    Income before income taxes 44,248   73,348 
    Income tax expense 12,715   19,801 
    Net income$31,533  $53,547 
            
    Net income per common share:       
    Basic$0.33  $0.55 
    Diluted$0.33  $0.54 
            
    Weighted-average common shares outstanding:       
    Basic 95,479,927   98,108,245 
    Diluted 96,347,211   99,322,220 
            
            
    AS A PERCENTAGE OF NET SALES       
    Net sales 100.0%  100.0%
    Cost of sales 69.3%  67.6%
    Gross profit 30.7%  32.4%
    Selling, general and administrative expenses 26.3%  24.5%
    Income from operations 4.4%  7.9%
    Other loss, net (0.2%)  (0.0%)
    Income before income taxes 4.2%  7.9%
    Income tax expense 1.2%  2.1%
    Net income 3.0%  5.8%


     
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Balance Sheets
    (amounts in thousands, except share data)
    (unaudited)
     
     April 30,  January 31,  April 30, 
     2022  2022  2021 
    ASSETS           
    Current assets:           
    Cash and cash equivalents$71,640  $206,575  $364,247 
    Marketable securities 187,563   239,420   164,430 
    Accounts receivable, net of allowance for doubtful accounts of $1,153, $1,348 and $2,155, respectively 97,058   63,760   85,307 
    Inventory 629,953   569,699   477,777 
    Prepaid expenses and other current assets 221,905   206,293   189,268 
    Total current assets 1,208,119   1,285,747   1,281,029 
    Property and equipment, net 1,149,772   1,145,085   988,973 
    Operating lease right-of-use assets 967,639   1,000,255   1,093,037 
    Marketable securities 179,458   223,557   100,680 
    Deferred income taxes and other assets 137,322   136,703   115,888 
    Total Assets$3,642,310  $3,791,347  $3,579,607 
                
    LIABILITIES AND SHAREHOLDERS’ EQUITY           
    Current liabilities:           
    Accounts payable$296,673  $304,246  $251,944 
    Current portion of operating lease liabilities 227,533   236,315   246,226 
    Accrued expenses, accrued compensation and other current liabilities 395,949   440,912   393,430 
    Total current liabilities 920,155   981,473   891,600 
    Non-current portion of operating lease liabilities 913,380   951,080   1,060,228 
    Deferred rent and other liabilities 112,854   113,054   93,270 
    Total Liabilities 1,946,389   2,045,607   2,045,098 
                
    Shareholders’ equity:           
    Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued        
    Common shares; $.0001 par value, 200,000,000 shares authorized, 94,434,621, 96,431,044 and 98,235,127 shares issued and outstanding, respectively9  10  10 
    Additional paid-in-capital       17,585 
    Retained earnings 1,740,508   1,770,560   1,528,655 
    Accumulated other comprehensive loss (44,596)  (24,830)  (11,741)
    Total Shareholders’ Equity 1,695,921   1,745,740   1,534,509 
    Total Liabilities and Shareholders’ Equity$3,642,310  $3,791,347  $3,579,607 


     
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Statements of Cash Flows
    (amounts in thousands)
    (unaudited)
     
      Three Months Ended 
      April 30, 
      2022  2021 
    Cash flows from operating activities:        
    Net income $31,533  $53,547 
    Adjustments to reconcile net income to net cash (used in) provided by operating activities:        
    Depreciation and amortization  26,702   25,633 
    Non-cash lease expense  47,980   45,422 
    Provision for deferred income taxes  7,420   37 
    Share-based compensation expense  7,102   4,570 
    Loss on disposition of property and equipment, net  85   121 
    Changes in assets and liabilities:        
    Receivables  (34,109)  4,760 
    Inventory  (64,511)  (87,427)
    Prepaid expenses and other assets  (22,913)  (1,355)
    Payables, accrued expenses and other liabilities  (15,184)  43,442 
    Operating lease liabilities  (63,662)  (51,644)
    Net cash (used in) provided by operating activities  (79,557)  37,106 
    Cash flows from investing activities:        
    Cash paid for property and equipment  (73,723)  (42,589)
    Cash paid for marketable securities  (18,703)  (94,889)
    Sales and maturities of marketable securities  106,043   73,848 
    Net cash provided by (used in) investing activities  13,617   (63,630)
    Cash flows from financing activities:        
    Proceeds from the exercise of stock options     1,073 
    Share repurchases related to share repurchase program  (62,052)   
    Share repurchases related to taxes for share-based awards  (6,636)  (7,418)
    Net cash used in financing activities  (68,688)  (6,345)
    Effect of exchange rate changes on cash and cash equivalents  (307)  1,481 
    Decrease in cash and cash equivalents  (134,935)  (31,388)
    Cash and cash equivalents at beginning of period  206,575   395,635 
    Cash and cash equivalents at end of period $71,640  $364,247 

     

    Contact: Oona McCullough
      Executive Director of Investor Relations
      (215) 454-4806



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