• URBN Reports Record Q2 Sales

    ソース: Nasdaq GlobeNewswire / 21 8 2024 16:05:00   America/New_York

    PHILADELPHIA, Aug. 21, 2024 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands including the Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly brands, today announced net income of $117.5 million and earnings per diluted share of $1.24 for the three months ended July 31, 2024. For the six months ended July 31, 2024, net income was $179.3 million and earnings per diluted share were $1.89.

    Total Company net sales for the three months ended July 31, 2024, increased 6.3% to a record $1.35 billion. Total Retail segment net sales increased 3.1%, with comparable Retail segment net sales increasing 2.0%. The increase in Retail segment comparable net sales was driven by low single-digit positive growth in both digital channel sales and retail store sales. Comparable Retail segment net sales increased 7.1% at Free People and 6.7% at Anthropologie and decreased 9.3% at Urban Outfitters. Nuuly segment net sales increased by 62.6% primarily driven by a 55% increase in average active subscribers in the current quarter versus the prior year quarter. Wholesale segment net sales increased 15.1% driven by a 17.5% increase in Free People wholesale sales due to an increase in sales to department stores and specialty customers, partially offset by a decrease in Urban Outfitters wholesale sales.

    For the six months ended July 31, 2024, total Company net sales increased 7.0% to a record $2.55 billion. Total Retail segment net sales increased 4.4%, with comparable Retail segment net sales increasing 3.2%. The increase in Retail segment comparable net sales was driven by mid single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales. Comparable Retail segment net sales increased 11.5% at Free People and 8.4% at Anthropologie and decreased 11.4% at Urban Outfitters. Nuuly segment net sales increased by 57.2% primarily driven by a 50% increase in average active subscribers in the current period versus the prior year period. Wholesale segment net sales increased 9.2% driven by a 11.9% increase in Free People wholesale sales due to an increase in sales to department stores and specialty customers, partially offset by a decrease in Urban Outfitters wholesale sales.

    “We are pleased to report record second quarter sales fueled by strength across all three segments – Retail, Nuuly and Wholesale,” said Richard A. Hayne, Chief Executive Officer. “Equally impressive, four of our five brands delivered record operating profits during the second quarter,” finished Mr. Hayne.

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

     Three Months Ended  Six Months Ended 
     July 31,  July 31, 
     2024  2023  2024  2023 
    Net sales by brand           
    Anthropologie(1)$569,100  $530,087  $1,095,485  $1,003,727 
    Free People(2) 365,129   331,201   683,820   604,936 
    Urban Outfitters 316,715   346,424   586,973   655,132 
    Nuuly 90,696   55,793   168,638   107,263 
    Menus & Venues 10,319   8,690   17,775   14,811 
    Total Company$1,351,959  $1,272,195  $2,552,691  $2,385,869 
                
    Net sales by segment           
    Retail Segment$1,196,456  $1,160,089  $2,259,141  $2,164,190 
    Nuuly Segment 90,696   55,793   168,638   107,263 
    Wholesale Segment 64,807   56,313   124,912   114,416 
    Total Company$1,351,959  $1,272,195  $2,552,691  $2,385,869 

    (1) Anthropologie includes the Anthropologie and Terrain brands.
    (2) Free People includes the Free People and FP Movement brands.


    For the three months ended July 31, 2024, the gross profit rate increased by 68 basis points compared to the three months ended July 31, 2023. Gross profit dollars increased 8.3% to $493.3 million from $455.6 million in the three months ended July 31, 2023. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives, partially offset by higher Retail segment merchandise markdowns, primarily at the Urban Outfitters brand. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

    For the six months ended July 31, 2024, the gross profit rate increased by 67 basis points compared to the six months ended July 31, 2023. Gross profit dollars increased 9.1% to $901.7 million from $826.8 million in the six months ended July 31, 2023. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives, partially offset by higher Retail segment merchandise markdowns, primarily at the Urban Outfitters brand, and a deleverage in logistics expenses. The deleverage in logistics expenses was primarily driven by the increased penetration of Nuuly segment sales to total Company sales, as well as transition and start-up expenses related to the additional Nuuly fulfillment facility that opened during the three months ended April 30, 2024. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

    As of July 31, 2024, total inventory increased by $18.2 million, or 3.1%, compared to total inventory as of July 31, 2023. Total Retail segment inventory increased 3.1%, while Retail segment comparable inventory decreased by 1.3%. Wholesale segment inventory increased by 3.5%.

    For the three months ended July 31, 2024, selling, general and administrative expenses increased by $24.7 million, or 7.6%, compared to the three months ended July 31, 2023, and expressed as a percentage of net sales, deleveraged 32 basis points. For the six months ended July 31, 2024, selling, general and administrative expenses increased by $58.6 million, or 9.4%, compared to the six months ended July 31, 2023, and expressed as a percentage of net sales, deleveraged 59 basis points. The deleverage in selling, general and administrative expenses as a rate to net sales for both periods was primarily related to the Urban Outfitters brand not being able to reduce expenses at the same rate of net sales. The dollar growth in selling, general and administrative expenses for both periods was primarily related to increased marketing expenses to support customer traffic growth and increased sales in the Retail and Nuuly segments and increased store payroll expenses to support the Retail segment stores comparable sales growth.

    The Company’s effective tax rate for the three months ended July 31, 2024 was 23.0%, compared to 23.2% in the three months ended July 31, 2023. The Company's effective tax rate for the six months ended July 31, 2024 was 23.2%, compared to 24.5% in the six months ended July 31, 2023. The decrease in the effective tax rate for the three and six months ended July 31, 2024 was primarily due to the favorable impact of equity activity in the current year.

    Net income for the three months ended July 31, 2024 was $117.5 million and earnings per diluted share were $1.24. Net income for the six months ended July 31, 2024 was $179.3 million and earnings per diluted share were $1.89.

    On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. During the six months ended July 31, 2024, the Company repurchased and subsequently retired 1.2 million shares for approximately $52 million. As of July 31, 2024, 18.0 million common shares were remaining under the program.

    During the six months ended July 31, 2024, the Company opened a total of 19 new retail locations including: 9 Free People stores (including 7 FP Movement stores), 5 Urban Outfitters stores and 5 Anthropologie stores; and closed 9 retail locations including: 4 Urban Outfitters stores, 3 Anthropologie stores and 2 Free People stores.

    Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 263 Urban Outfitters stores in the United States, Canada and Europe and websites; 239 Anthropologie stores in the United States, Canada and Europe, catalogs and websites; 205 Free People stores (including 45 FP Movement stores) in the United States, Canada and Europe, catalogs and websites, 9 Menus & Venues restaurants, 7 Urban Outfitters franchisee-owned stores and 2 Anthropologie franchisee-owned stores as of July 31, 2024. 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. Nuuly is a women's apparel subscription rental service which offers a wide selection of rental product from the Company's own brands, third-party brands and one-of-a-kind vintage pieces.

    A conference call will be held today to discuss second quarter results and will be webcast at 5:15 pm. ET at: https://edge.media-server.com/mmc/p/o4zr87uy/.

    As used in this document, unless otherwise defined, "Anthropologie" refers to the Company's Anthropologie and Terrain brands and "Free People" refers to the Company's Free People and FP Movement brands.

    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: 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, impacts of the conflict in the Middle East and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises (such as the coronavirus (COVID-19)), labor shortages and 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 unexpected 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  Six Months Ended 
     July 31,  July 31, 
     2024  2023  2024  2023 
    Net sales$1,351,959  $1,272,195  $2,552,691  $2,385,869 
    Cost of sales (excluding store impairment and lease abandonment charges) 858,674   816,614   1,646,420   1,559,057 
    Store impairment and lease abandonment charges       4,601    
    Gross profit 493,285   455,581   901,670   826,812 
    Selling, general and administrative expenses 348,150   323,483   681,911   623,331 
    Income from operations 145,135   132,098   219,759   203,481 
    Other income, net 7,429   3,399   13,675   4,418 
    Income before income taxes 152,564   135,497   233,434   207,899 
    Income tax expense 35,079   31,405   54,184   50,990 
    Net income$117,485  $104,092  $179,250  $156,909 
                
    Net income per common share:           
    Basic$1.26  $1.12  $1.93  $1.69 
    Diluted$1.24  $1.10  $1.89  $1.67 
                
    Weighted-average common shares outstanding:           
    Basic 93,071,401   92,741,888   93,097,694   92,610,499 
    Diluted 94,684,003   94,228,185   94,842,065   94,026,950 
                
                
    AS A PERCENTAGE OF NET SALES           
    Net sales 100.0%  100.0%  100.0%  100.0%
    Cost of sales (excluding store impairment and lease abandonment charges) 63.5%  64.2%  64.5%  65.3%
    Store impairment and lease abandonment charges       0.2%   
    Gross profit 36.5%  35.8%  35.3%  34.7%
    Selling, general and administrative expenses 25.8%  25.4%  26.7%  26.2%
    Income from operations 10.7%  10.4%  8.6%  8.5%
    Other income, net 0.6%  0.3%  0.5%  0.2%
    Income before income taxes 11.3%  10.7%  9.1%  8.7%
    Income tax expense 2.6%  2.5%  2.1%  2.1%
    Net income 8.7%  8.2%  7.0%  6.6%


      
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Balance Sheets
    (amounts in thousands, except share data)
    (unaudited)
     
      
     July 31,  January 31,  July 31, 
     2024  2024  2023 
    ASSETS        
    Current assets:        
    Cash and cash equivalents$209,129  $178,321  $224,744 
    Marketable securities 352,360   286,744   250,832 
    Accounts receivable, net of allowance for doubtful accounts of $1,429, $1,465 and $1,481, respectively 78,749   67,008   79,118 
    Inventory 604,667   550,242   586,514 
    Prepaid expenses and other current assets 228,966   200,188   224,254 
    Total current assets 1,473,871   1,282,503   1,365,462 
    Property and equipment, net 1,314,923   1,286,541   1,222,343 
    Operating lease right-of-use assets 941,404   920,396   961,458 
    Marketable securities 209,469   314,152   122,356 
    Other assets 319,156   307,617   298,317 
    Total Assets$4,258,823  $4,111,209  $3,969,936 
             
    LIABILITIES AND SHAREHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable$299,351  $253,342  $270,464 
    Current portion of operating lease liabilities 227,987   226,645   227,669 
    Accrued expenses, accrued compensation and other current liabilities 483,080   514,218   459,343 
    Total current liabilities 1,010,418   994,205   957,476 
    Non-current portion of operating lease liabilities 875,174   851,853   882,841 
    Other non-current liabilities 131,798   152,611   162,228 
    Total Liabilities 2,017,390   1,998,669   2,002,545 
             
    Shareholders’ equity:        
    Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued        
    Common shares; $.0001 par value, 200,000,000 shares authorized, 92,260,283, 92,787,522, and 92,773,249 shares issued and outstanding, respectively9  9  9 
    Additional paid-in-capital    37,943   23,214 
    Retained earnings 2,279,856   2,113,735   1,982,970 
    Accumulated other comprehensive loss (38,432)  (39,147)  (38,802)
    Total Shareholders’ Equity 2,241,433   2,112,540   1,967,391 
    Total Liabilities and Shareholders’ Equity$4,258,823  $4,111,209  $3,969,936 


      
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Statements of Cash Flows
    (amounts in thousands)
    (unaudited)
     
      
      Six Months Ended 
      July 31, 
      2024  2023 
    Cash flows from operating activities:      
    Net income $179,250  $156,909 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  56,552   47,471 
    Non-cash lease expense  103,146   101,277 
    Provision for deferred income taxes  9,208   526 
    Share-based compensation expense  15,556   15,556 
    Amortization of tax credit investment  8,760   7,953 
    Store impairment and lease abandonment charges  4,601    
    Loss on disposition of property and equipment, net  420   146 
    Changes in assets and liabilities:      
    Receivables  (11,606)  (8,160)
    Inventory  (54,050)  3,299 
    Prepaid expenses and other assets  (48,318)  (48,256)
    Payables, accrued expenses and other liabilities  16,858   54,573 
    Operating lease liabilities  (116,563)  (120,047)
    Net cash provided by operating activities  163,814   211,247 
    Cash flows from investing activities:      
    Cash paid for property and equipment  (98,854)  (78,517)
    Cash paid for marketable securities  (166,428)  (229,446)
    Sales and maturities of marketable securities  204,145   149,921 
    Initial cash payment for tax credit investment     (20,000)
    Net cash used in investing activities  (61,137)  (178,042)
    Cash flows from financing activities:      
    Proceeds from the exercise of stock options  851   594 
    Share repurchases related to share repurchase program  (52,262)   
    Share repurchases related to taxes for share-based awards  (14,977)  (8,184)
    Tax credit investment liability payments  (2,713)  (1,724)
    Net cash used in financing activities  (69,101)  (9,314)
    Effect of exchange rate changes on cash and cash equivalents  (2,768)  (407)
    Increase in cash and cash equivalents  30,808   23,484 
    Cash and cash equivalents at beginning of period  178,321   201,260 
    Cash and cash equivalents at end of period $209,129  $224,744 


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

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