Urban Outfitters Reports Record Q1 Sales

Urban Outfitters, Inc. (NASDAQ:URBN), a portfolio of global consumer brands comprised of Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters and Vetri Family brands, today announced net income of $30 million for the three months ended April 30, 2016. Earnings per diluted share were $0.25 for the three months ended April 30, 2016.

Total Company net sales for the first quarter of fiscal 2017 increased 3% over the same quarter last year to a record $763 million. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, increased 1%, which includes the benefit of a leap year. Comparable Retail segment net sales increased 2% at Urban Outfitters, were flat at the Anthropologie Group and decreased 2% at Free People. Wholesale segment net sales increased 16%.

“We are pleased to announce record first quarter sales and improved gross profit margins,” said Richard A. Hayne, Chief Executive Officer.  “These results were driven by more compelling product assortments, improved inventory management and stronger marketing,” finished Mr. Hayne.

For the three months ended April 30, 2016, the gross profit rate increased by 100 basis points versus the prior year’s comparable period. The increase in gross profit rate was primarily driven by improvement in the Urban Outfitters and Anthropologie Group brands maintained margins, with Urban Outfitters delivering significantly lower markdowns compared to prior year. The increase was partially offset by a lower gross profit rate at the Free People brand which was primarily driven by higher markdowns.

As of April 30, 2016, total inventory decreased by $38 million, or 10%, on a year-over-year basis. The decrease in total inventory is primarily related to the decline in comparable Retail segment inventory, which decreased 10% at cost.

For the three months ended April 30, 2016, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 155 basis points when compared to the prior year period. The deleverage is primarily due to an increase in marketing expense to support our customer acquisition and retention efforts, deleverage in direct store controllable expenses related to negative store comparable sales, and an increase in technology related expenses used to support our omni-channel initiatives.

The Company’s effective tax rate for the first quarter of fiscal 2017 was 39.6% compared to 35.6% in the prior year period.  This increase in the tax rate was due to the ratio of foreign taxable losses to global taxable profits in the quarter.
more at:  http://investor.urbn.com/phoenix.zhtml?c=115825&p=irol-newsArticle&ID=2169445

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