• URBN Reports Record Q1 Sales and EPS

    ソース: Nasdaq GlobeNewswire / 23 5 2023 16:05:00   America/New_York

    PHILADELPHIA, May 23, 2023 (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, Free People, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands, today announced net income of $53 million and record first quarter earnings per diluted share of $0.56 for the three months ended April 30, 2023.

    Total Company net sales for the three months ended April 30, 2023, increased 5.9% to a record $1.11 billion. Total Retail segment net sales increased 4%, with comparable Retail segment net sales increasing 5%, partially offset by a 1% negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales. By brand, comparable Retail segment net sales increased 17% at the Free People Group and 13% at the Anthropologie Group and decreased 13% at Urban Outfitters. Wholesale segment net sales decreased 11% driven by a 14% decrease in Free People Group wholesale sales due to a decrease in sales to department stores and specialty customers, while Urban Outfitters wholesale sales increased by $1 million. Nuuly segment net sales increased by $28.6 million driven by a 118% increase in our subscribers as of the current quarter end versus the end of the prior year’s comparable quarter.

    “We are pleased to report record first quarter sales and earnings per share driven by a 5% increase in comparable Retail segment sales, strong growth in Nuuly Rent and a significant improvement in gross margins,” said Richard A. Hayne, Chief Executive Officer. “We are equally pleased that Q1’s sales strength has continued quarter-to-date,” finished Mr. Hayne.

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

     Three Months Ended 
     April 30, 
     2023  2022 
    Net sales by brand     
    Anthropologie Group$473,640  $419,677 
    Urban Outfitters 308,708   357,702 
    Free People Group 273,735   245,758 
    Nuuly 51,470   22,849 
    Menus & Venues 6,121   5,948 
    Total Company$1,113,674  $1,051,934 
          
    Net sales by segment     
    Retail Segment$1,004,101  $963,435 
    Wholesale Segment 58,103   65,650 
    Nuuly Segment 51,470   22,849 
    Total Company$1,113,674  $1,051,934 


    For the three months ended April 30, 2023, the gross profit rate increased by 260 basis points compared to the three months ended April 30, 2022. Gross profit dollars increased 14.8% to $371.2 million from $323.3 million in the three months ended April 30, 2022. The increase in gross profit rate was primarily due to higher initial merchandise markups at all three brands primarily driven by lower inbound transportation costs. Additionally, the gross profit rate benefited from lower merchandise markdowns at the Anthropologie Group and Free People Group brands.

    As of April 30, 2023, total inventory decreased by $39.6 million, or 6.3%, compared to total inventory as of April 30, 2022. Total Retail segment inventory decreased by 5% primarily due to better inventory control supported by a more reliable supply chain. Wholesale segment inventory decreased by 23% in line with the reduction in wholesale sales.

    For the three months ended April 30, 2023, selling, general and administrative expenses increased by $22.8 million, or 8.2%, compared to the three months ended April 30, 2022, and expressed as a percentage of net sales, deleveraged 59 basis points. The deleverage in selling, general and administrative expenses as a rate to sales was primarily related to higher compensation costs, including higher incentive-based compensation costs due to improved Company performance. The dollar growth in selling, general and administrative expenses was due to higher compensation costs, including higher incentive-based compensation costs due to improved Company performance, as well as increased marketing expenses to support increased sales and customer growth.

    The Company’s effective tax rate for the three months ended April 30, 2023 was 27.1%, compared to 28.7% in the three months ended April 30, 2022. The decrease in the effective tax rate for the three months ended April 30, 2023 was attributable to the ratio of foreign taxable earnings to global taxable earnings and the favorable impact of general business credits in the current year.

    Net income for the three months ended April 30, 2023 was $52.8 million and record first quarter earnings per diluted share was $0.56.

    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 year ended January 31, 2023, the Company repurchased and subsequently retired 4.7 million common shares for approximately $112 million. During the three months ended April 30, 2023, the Company did not repurchase any common shares. As of April 30, 2023, 19.2 million common shares were remaining under the program.

    During the three months ended April 30, 2023, the Company opened 5 Free People Group stores (including 2 FP Movement stores) and closed 5 retail locations including: 3 Urban Outfitters stores, 1 Anthropologie Group store and 1 Menus & Venues restaurant. During the three months ended April 30, 2023, 1 Urban Outfitters franchisee-owned store was opened.

    Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 260 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; 193 Free People stores (including 33 FP Movement stores) in the United States, Canada and Europe, catalogs and websites, 10 Menus & Venues restaurants, 7 Urban Outfitters franchisee-owned stores and 2 Anthropologie Group franchisee-owned stores as of April 30, 2023. 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/3urrq5ur.

    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 and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, the 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 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, 
     2023  2022 
    Net sales$1,113,674  $1,051,934 
    Cost of sales 742,443   728,633 
    Gross profit 371,231   323,301 
    Selling, general and administrative expenses 299,848   277,064 
    Income from operations 71,383   46,237 
    Other income (loss), net 1,019   (1,989)
    Income before income taxes 72,402   44,248 
    Income tax expense 19,585   12,715 
    Net income$52,817  $31,533 
          
    Net income per common share:     
    Basic$0.57  $0.33 
    Diluted$0.56  $0.33 
          
    Weighted-average common shares outstanding:     
    Basic 92,474,688   95,479,927 
    Diluted 93,821,292   96,347,211 
          
          
    AS A PERCENTAGE OF NET SALES     
    Net sales 100.0%  100.0%
    Cost of sales 66.7%  69.3%
    Gross profit 33.3%  30.7%
    Selling, general and administrative expenses 26.9%  26.3%
    Income from operations 6.4%  4.4%
    Other income (loss), net 0.1%  (0.2%)
    Income before income taxes 6.5%  4.2%
    Income tax expense 1.8%  1.2%
    Net income 4.7%  3.0%


      
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Balance Sheets
    (amounts in thousands, except share data)
    (unaudited)
     
      
     April 30,  January 31,  April 30, 
     2023  2023  2022 
    ASSETS        
    Current assets:        
    Cash and cash equivalents$171,655  $201,260  $71,640 
    Marketable securities 209,777   181,378   187,563 
    Accounts receivable, net of allowance for doubtful accounts
    of $1,453, $1,496 and $1,153, respectively
     105,589   70,339   97,058 
    Inventory 590,326   587,510   629,953 
    Prepaid expenses and other current assets 223,894   197,232   221,905 
    Total current assets 1,301,241   1,237,719   1,208,119 
    Property and equipment, net 1,201,506   1,187,735   1,149,772 
    Operating lease right-of-use assets 921,893   959,436   967,639 
    Marketable securities 86,156   102,844   179,458 
    Deferred income taxes and other assets 281,874   195,178   137,322 
    Total Assets$3,792,670  $3,682,912  $3,642,310 
             
    LIABILITIES AND SHAREHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable$263,558  $257,620  $296,673 
    Current portion of operating lease liabilities 233,085   232,672   227,533 
    Accrued expenses, accrued compensation and other current liabilities 431,033   400,082   395,949 
    Total current liabilities 927,676   890,374   920,155 
    Non-current portion of operating lease liabilities 845,643   884,696   913,380 
    Deferred rent and other liabilities 168,669   115,159   112,854 
    Total Liabilities 1,941,988   1,890,229   1,946,389 
             
    Shareholders’ equity:        
    Preferred shares; $.0001 par value, 10,000,000 shares
    authorized, none issued
            
    Common shares; $.0001 par value, 200,000,000 shares
    authorized, 92,677,835, 92,180,709 and 94,434,621 shares
    issued and outstanding, respectively
    9  9  9 
    Additional paid-in-capital 15,133   15,248    
    Retained earnings 1,878,878   1,826,061   1,740,508 
    Accumulated other comprehensive loss (43,338)  (48,635)  (44,596)
    Total Shareholders’ Equity 1,850,682   1,792,683   1,695,921 
    Total Liabilities and Shareholders’ Equity$3,792,670  $3,682,912  $3,642,310 


      
    URBAN OUTFITTERS, INC.
    Condensed Consolidated Statements of Cash Flows
    (amounts in thousands)
    (unaudited)
     
      
      Three Months Ended 
      April 30, 
      2023  2022 
    Cash flows from operating activities:      
    Net income $52,817  $31,533 
    Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
    Depreciation and amortization  23,879   26,702 
    Non-cash lease expense  50,859   47,980 
    Provision for deferred income taxes  2,457   7,420 
    Share-based compensation expense  7,735   7,102 
    Amortization of tax credit investment  3,976    
    Loss on disposition of property and equipment, net  222   85 
    Changes in assets and liabilities:      
    Receivables  (35,030)  (34,109)
    Inventory  (1,649)  (64,511)
    Prepaid expenses and other assets  (35,045)  (22,913)
    Payables, accrued expenses and other liabilities  22,257   (15,184)
    Operating lease liabilities  (56,201)  (63,662)
    Net cash provided by (used in) operating activities  36,277   (79,557)
    Cash flows from investing activities:      
    Cash paid for property and equipment  (32,904)  (73,723)
    Cash paid for marketable securities  (74,101)  (18,703)
    Sales and maturities of marketable securities  69,456   106,043 
    Initial cash payment for tax credit investment  (20,000)   
    Net cash (used in) provided by investing activities  (57,549)  13,617 
    Cash flows from financing activities:      
    Share repurchases related to share repurchase program     (62,052)
    Share repurchases related to taxes for share-based awards  (7,850)  (6,636)
    Tax credit investment liability payments  (468)   
    Net cash used in financing activities  (8,318)  (68,688)
    Effect of exchange rate changes on cash and cash equivalents  (15)  (307)
    Decrease in cash and cash equivalents  (29,605)  (134,935)
    Cash and cash equivalents at beginning of period  201,260   206,575 
    Cash and cash equivalents at end of period $171,655  $71,640 


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

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