Direct-to-consumer comparable net sales up at Urban Outfitters
Urban Outfitters Inc, a leading lifestyle specialty retail company operating under the Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands, announced net income of $39 million or earnings per diluted share of $0.23 for the three months ended April 30, 2011.
Total Company net sales rose by 9% over the same quarter last year to $524 million. Comparable retail segment net sales, which include our direct-to-consumer channels, decreased 1% for the quarter while comparable store net sales decreased 5% for the quarter. Comparable retail segment net sales at Free People and Urban Outfitters increased 30%, and 1%, respectively, while comparable retail segment net sales at Anthropologie decreased 6% for the quarter. Direct-to-consumer comparable net sales increased 15% and wholesale segment net sales rose 22% for the quarter.
"I am confident that we are on the right course to bring our business back to its high standards," said Chief Executive Officer, Glen T. Senk. "I am encouraged by the progress each of the brands have made and anticipate improvements to occur gradually during the balance of this fiscal year," finished Senk.
For the first quarter ended April 30, 2011, gross profit margin percentage declined by 493 basis points versus the prior year's comparable period. This decline was primarily due to increased merchandise markdowns to clear slow moving inventory primarily associated with women's apparel at both Anthropologie and Urban Outfitters and a non-recurring loss associated with the sell-off of Leifsdottir wholesale inventories during the current quarter.
As of April 30, 2011, total comparable retail segment inventories (which includes our direct-to-consumer channel) increased by 6% at cost while total comparable store inventory increased by 1% at cost. Total inventories grew by $42 million or 19%, on a year-over-year basis, primarily due to the acquisition of inventory to stock new retail stores, as well as, inventory to support growth in the direct-to-consumer channel.
For the first quarter ended April 30, 2011, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 96 basis points. This increase was primarily due to the deleveraging of store operating costs as a result of the negative comparable store net sales for the three months ended April 30, 2011. Additionally contributing to the deleverage in the quarter were investments in new technology, non-recurring transition costs associated with Leifsdottir and planned transition costs for our new distribution and fulfillment facilities in Europe.
On November 16, 2010, our Board of Directors approved a share repurchase program that authorized the repurchase of 10 million common shares subject to prevailing market conditions. During the quarter ended April 30, 2011, the Company repurchased and retired 4.8 million common shares for approximately $149 million. These repurchases completed the Company's 2006 share repurchase program leaving 5.7 million shares available for repurchase under the 2010 share repurchase program.