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Urban Outfitters produces healthy Q4 earnings
06
Mar '09
Urban Outfitters Inc announced earnings of $41 million and $199 million for the fourth quarter and year ended January 31, 2009, respectively. Earnings per diluted share were $0.24 for the quarter and $1.17 for the year.

As stated in the Company's previous sales release on February 5, 2009, total sales for the fourth quarter reached a record $508 million, an increase of 9% over the comparable quarter last year. Comparable retail segment sales, which include our Direct-to-consumer channels, increased 3% for the quarter.

Comparable store sales rose 3% at Urban Outfitters and decreased 6% and 13% at Anthropologie and Free People respectively, for a combined total company comparable store sales decrease of 1%. Direct-to-consumer sales surged 20%, reflecting strong growth across all brands. Free People wholesale sales decreased 3% for the quarter. Total Company net sales for the year ended January 31, 2009 increased 22%, to a record $1.8 billion.

"We are pleased to announce healthy fourth quarter earnings despite an uncertain and challenging environment," said Glen T. Senk, Chief Executive Officer. "We are particularly proud of our team's ability to execute two critical tasks during the quarter: reducing 'comp' inventory levels by 13% versus the prior year, and implementing measurable cost control initiatives resulting in SG&A expense improvements of 73 basis points versus the prior year.

It was another record breaking year for the URBN team, and we enter the spring selling season enthusiastically committed to providing a compelling product assortment and customer experience," finished Mr. Senk.

For the fourth quarter ended January 31, 2009, gross profit margin declined by 555 basis points, versus the prior year's comparable period. This decrease is primarily due to a higher rate of applied and anticipated merchandise markdowns to clear seasonal inventory. For the year ended January 31, 2009, gross profit margin increased by 64 basis points primarily due to the leveraging of store occupancy costs and improvements to initial margins.

As of January 31, 2009, inventories decreased by $2.2 million or 1% on a year-over-year basis as comparable store inventory declines more than offset additions to inventories for new stores. For the quarter ended January 31, 2009, total comparable store inventories decreased by 13%.

For the fourth quarter and year ended January 31, 2009, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 73 and 76 basis points, respectively, versus the prior year comparable periods.

For the quarter, the reduction was primarily driven by cost control across all areas of the business, with the most impact in direct store related expenses. For the year ended January 31, 2009, the favorable rate reduction was primarily due to cost control in direct store related expenses as well as savings related to non-recurring legal fees incurred in the prior year.


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