• URBN Reports Q3 Sales and Earnings

    ソース: Nasdaq GlobeNewswire / 21 11 2022 16:05:00   America/New_York

    PHILADELPHIA, Nov. 21, 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 $37.2 million and earnings per diluted share of $0.40 for the three months ended October 31, 2022. For the nine months ended October 31, 2022, net income was $128.2 million and earnings per diluted share were $1.36.

    Total Company net sales for the three months ended October 31, 2022, increased 3.9% over the same period last year to a record $1.18 billion. Total Retail segment net sales increased 2%, with comparable Retail segment net sales increasing 4%, partially offset by a 2% negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by mid-single-digit positive digital channel sales and low single-digit positive retail store sales. By brand, comparable Retail segment net sales increased 13% at the Anthropologie Group and 8% at the Free People Group and decreased 9% at Urban Outfitters. Wholesale segment net sales decreased 3%, driven by a 4% decrease in Free People Group wholesale sales, partially offset by a 6% increase in Urban Outfitters wholesale sales. Nuuly segment net sales increased by $22.6 million driven by a 185% increase in our subscribers during the quarter versus the prior year’s comparable quarter.

    For the nine months ended October 31, 2022, total Company net sales increased 6.0% compared to the same period last year. Total Retail segment net sales increased 5%, with comparable Retail segment net sales also increasing 5%. The relative proportion of Retail segment sales attributable to store and digital channels changed due in large part to the temporary global store closures and occupancy restrictions in the first nine months of the prior year due to the COVID-19 pandemic. With those restrictions not present in the first nine months of the current year, Retail segment comparable sales increased due to double-digit growth in retail store sales due to increased store traffic, while digital channel sales were flat. By brand, comparable Retail segment net sales increased 13% at the Anthropologie Group and 10% at the Free People Group and decreased 6% at Urban Outfitters. Wholesale segment net sales increased 1%, driven by a 2% increase in Free People Group wholesale sales, partially offset by a decline in Urban Outfitters wholesale sales. Nuuly segment net sales increased by $56.5 million driven by a 200% increase in our subscribers during the period versus the prior year’s comparable period.

    “We are pleased to announce record Q3 sales fueled by strong ‘comps’ at the Anthropologie and Free People brands,” said Richard A. Hayne, Chief Executive Officer. “As we approach the all-important Black Friday/Cyber Monday weekend, we are encouraged by sales quarter-to-date,” finished Mr. Hayne.

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

     Three Months Ended  Nine Months Ended 
     October 31,  October 31, 
     2022  2021  2022  2021 
    Net sales by brand           
    Anthropologie Group$484,158  $431,407  $1,383,063  $1,235,567 
    Urban Outfitters 367,557   415,877   1,121,708   1,207,174 
    Free People Group 280,698   264,995   797,859   727,454 
    Nuuly 35,279   12,688   86,904   30,447 
    Menus & Venues 7,657   6,457   21,137   15,922 
    Total Company$1,175,349  $1,131,424  $3,410,671  $3,216,564 
                
    Net sales by segment           
    Retail Segment$1,067,531  $1,043,905  $3,126,157  $2,990,413 
    Wholesale Segment 72,539   74,831   197,610   195,704 
    Nuuly Segment 35,279   12,688   86,904   30,447 
    Total Company$1,175,349  $1,131,424  $3,410,671  $3,216,564 

    For the three months ended October 31, 2022, the gross profit rate decreased by 416 basis points compared to the prior year’s comparable period. Gross profit dollars decreased 8.6% to $357.0 million. The decrease in gross profit rate and dollars was primarily due to higher markdowns at all three brands as compared to record low markdown rates in the comparable prior year quarter, with the Urban Outfitters brand having the largest variance.

    For the nine months ended October 31, 2022, the gross profit rate decreased by 410 basis points compared to the prior year’s comparable period. Gross profit dollars decreased 6.4% to $1.05 billion. The decrease in gross profit rate and dollars was primarily due to higher markdowns at all three brands as compared to record low markdown rates in the comparable prior year period, as well as lower initial merchandise markups driven largely by higher inbound transportation expenses.

    As of October 31, 2022, total inventory increased by $116.5 million, or 18.6%, on a year-over-year basis. Retail segment inventory increased by 17% driven by higher costs, earlier than planned receipts due to improved supply chain speed and excess slower selling product in certain categories. Wholesale segment inventory increased by 39% due to softness in department store sales.

    For the three months ended October 31, 2022, selling, general and administrative expenses increased by $24.9 million, or 9.1%, compared to the prior year’s comparable period, and expressed as a percentage of net sales, deleveraged 121 basis points. The deleverage in SG&A as a rate to sales and growth in SG&A dollars was primarily related to increased store payroll expenses incurred due to increased store associate hours to support increased customer traffic and higher average wages in order to attract and retain employees, as well as marketing expenses to support increased sales and customer growth.

    For the nine months ended October 31, 2022, selling, general and administrative expenses increased by $94.1 million, or 12.2%, compared to the prior year’s comparable period, and expressed as a percentage of net sales, deleveraged 139 basis points. The deleverage in SG&A as a rate to sales and growth in SG&A dollars was primarily related to higher store payroll expenses to support retail store sales growth in the nine months ended October 31, 2022, along with increased store associate hours to support increased customer traffic and higher average wages in order to attract and retain employees. Additionally, marketing expenses increased to support sales and customer growth.

    The Company’s effective tax rate for the three months ended October 31, 2022 was 28.8%, compared to 23.0% in the prior year period. The Company’s effective tax rate for the nine months ended October 31, 2022 was 28.8%, compared to 23.6% in the prior year period. The increase in the effective tax rate for the three and nine months ended October 31, 2022, was attributable to the ratio of foreign taxable earnings to global taxable earnings, tax rate law changes and the prior year favorable impact of equity activity.

    Net income for the three months ended October 31, 2022 was $37.2 million and earnings per diluted share were $0.40. Net income for the nine months ended October 31, 2022 was $128.2 million and earnings per diluted share were $1.36.

    On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program; all shares were repurchased and the authorization was completed by the end of June 2022. 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 nine months ended October 31, 2022, the Company repurchased and subsequently retired 4.7 million common shares for approximately $112 million. As of October 31, 2022, 19.2 million common shares were remaining under the program.

    During the nine months ended October 31, 2022, the Company opened a total of 23 new retail locations including: 13 Free People Group stores (including 7 FP Movement stores), 5 Urban Outfitters stores, 4 Anthropologie Group stores and 1 Menus & Venues restaurant; and closed 4 retail locations including: 2 Urban Outfitters stores, 1 Anthropologie Group store and 1 Free People Group store. During the nine months ended October 31, 2022, 2 Urban Outfitters franchisee-owned stores and 1 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 264 Urban Outfitters stores in the United States, Canada and Europe and websites; 241 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 185 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 October 31, 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 third quarter results and will be webcast at 5:15 pm. ET at: https://edge.media-server.com/mmc/p/y32ftj5i.

    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 current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, 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, raw material costs and transportation 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  Nine Months Ended 
     October 31,  October 31, 
     2022  2021  2022  2021 
    Net sales$1,175,349  $1,131,424  $3,410,671  $3,216,564 
    Cost of sales (excluding store impairment) 817,348   740,686   2,354,817   2,089,910 
    Store impairment 958      958    
    Gross profit 357,043   390,738   1,054,896   1,126,654 
    Selling, general and administrative expenses 299,725   274,836   865,523   771,396 
    Income from operations 57,318   115,902   189,373   355,258 
    Other loss, net (5,019)  (551)  (9,270)  (2,503)
    Income before income taxes 52,299   115,351   180,103   352,755 
    Income tax expense 15,068   26,496   51,866   83,091 
    Net income$37,231  $88,855  $128,237  $269,664 
                
    Net income per common share:           
    Basic$0.40  $0.90  $1.37  $2.75 
    Diluted$0.40  $0.89  $1.36  $2.71 
                
    Weighted-average common shares outstanding:           
    Basic 92,174,160   98,202,399   93,544,085   98,209,796 
    Diluted 93,036,066   99,415,838   94,322,783   99,447,551 
                
                
    AS A PERCENTAGE OF NET SALES           
    Net sales 100.0%  100.0%  100.0%  100.0%
    Cost of sales (excluding store impairment) 69.5%  65.5%  69.1%  65.0%
    Store impairment 0.1%     0.0%   
    Gross profit 30.4%  34.5%  30.9%  35.0%
    Selling, general and administrative expenses 25.5%  24.3%  25.3%  24.0%
    Income from operations 4.9%  10.2%  5.6%  11.0%
    Other loss, net (0.5%)  (0.0%)  (0.3%)  (0.0%)
    Income before income taxes 4.4%  10.2%  5.3%  11.0%
    Income tax expense 1.2%  2.3%  1.5%  2.6%
    Net income 3.2%  7.9%  3.8%  8.4%

    URBAN OUTFITTERS, INC.
    Condensed Consolidated Balance Sheets
    (amounts in thousands, except share data)
    (unaudited)

     October 31,  January 31,  October 31, 
     2022  2022  2021 
    ASSETS        
    Current assets:        
    Cash and cash equivalents$147,431  $206,575  $236,354 
    Marketable securities 146,364   239,420   188,375 
    Accounts receivable, net of allowance for doubtful accounts
    of $1,265, $1,348 and $1,313, respectively
     81,422   63,760   114,208 
    Inventory 743,579   569,699   627,103 
    Prepaid expenses and other current assets 226,280   206,293   203,213 
    Total current assets 1,345,076   1,285,747   1,369,253 
    Property and equipment, net 1,175,080   1,145,085   1,088,287 
    Operating lease right-of-use assets 927,092   1,000,255   1,030,776 
    Marketable securities 95,246   223,557   269,780 
    Deferred income taxes and other assets 177,622   136,703   132,510 
    Total Assets$3,720,116  $3,791,347  $3,890,606 
             
    LIABILITIES AND SHAREHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable$326,529  $304,246  $315,481 
    Current portion of operating lease liabilities 224,378   236,315   240,074 
    Accrued expenses, accrued compensation and other
    current liabilities
     457,537   440,912   493,446 
    Total current liabilities 1,008,444   981,473   1,049,001 
    Non-current portion of operating lease liabilities 861,033   951,080   986,026 
    Deferred rent and other liabilities 112,248   113,054   108,848 
    Total Liabilities 1,981,725   2,045,607   2,143,875 
             
    Shareholders’ equity:        
    Preferred shares; $.0001 par value, 10,000,000 shares
    authorized, none issued
            
    Common shares; $.0001 par value, 200,000,000 shares
    authorized, 92,174,487, 96,431,044 and
    97,863,862 shares issued and outstanding, respectively
    9  10  10 
    Additional paid-in-capital 7,850      18,671 
    Retained earnings 1,794,599   1,770,560   1,744,772 
    Accumulated other comprehensive loss (64,067)  (24,830)  (16,722)
    Total Shareholders’ Equity 1,738,391   1,745,740   1,746,731 
    Total Liabilities and Shareholders’ Equity$3,720,116  $3,791,347  $3,890,606 

    URBAN OUTFITTERS, INC.
    Condensed Consolidated Statements of Cash Flows
    (amounts in thousands)
    (unaudited)

      Nine Months Ended 
      October 31, 
      2022  2021 
    Cash flows from operating activities:      
    Net income $128,237  $269,664 
    Adjustments to reconcile net income to net cash (used in) provided by operating activities:      
    Depreciation and amortization  77,529   77,985 
    Non-cash lease expense  143,036   144,347 
    Provision (benefit) for deferred income taxes  366   (5,086)
    Share-based compensation expense  21,971   19,068 
    Store impairment  958    
    Loss on disposition of property and equipment, net  345   193 
    Changes in assets and liabilities:      
    Receivables  (19,235)  (24,387)
    Inventory  (184,800)  (238,094)
    Prepaid expenses and other assets  (56,699)  (10,087)
    Payables, accrued expenses and other liabilities  59,305   161,251 
    Operating lease liabilities  (177,183)  (172,575)
    Net cash (used in) provided by operating activities  (6,170)  222,279 
    Cash flows from investing activities:      
    Cash paid for property and equipment  (143,445)  (159,008)
    Cash paid for marketable securities  (22,000)  (442,249)
    Sales and maturities of marketable securities  230,745   237,879 
    Net cash provided by (used in) investing activities  65,300   (363,378)
    Cash flows from financing activities:      
    Proceeds from the exercise of stock options  376   2,815 
    Share repurchases related to share repurchase program  (112,016)  (14,888)
    Share repurchases related to taxes for share-based awards  (6,680)  (7,684)
    Net cash used in financing activities  (118,320)  (19,757)
    Effect of exchange rate changes on cash and cash equivalents  46   1,575 
    Decrease in cash and cash equivalents  (59,144)  (159,281)
    Cash and cash equivalents at beginning of period  206,575   395,635 
    Cash and cash equivalents at end of period $147,431  $236,354 


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

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