PHILADELPHIA, Aug. 21, 2018 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands comprised of Anthropologie, BHLDN, Free People, Terrain and Urban Outfitters brands and the Food and Beverage division, today announced net income of $93 million and $134 million for the three and six months ended July 31, 2018, respectively. Earnings per diluted share were $0.84 and $1.22 for the three and six months ended July 31, 2018, respectively.

Total Company net sales for the three months ended July 31, 2018, increased 13.7% over the same period last year to a record $992 million. Comparable Retail segment net sales increased 13%, driven by strong, double-digit growth in the digital channel and positive retail store sales. By brand, comparable Retail segment net sales increased 17% at Free People, 15% at Urban Outfitters and 11% at the Anthropologie Group. Wholesale segment net sales increased 10%.

“I’m pleased to announce our teams produced record Q2 sales and earnings per share,” said Richard A. Hayne, Chief Executive Officer. “All three brands delivered double-digit Retail segment ‘comp’ sales and lower markdown rates to drive these results,” 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, --------------------- ------------------------- 2018 2017 2018 2017 --------- --------- ----------- ----------- Net sales by brand Urban Outfitters $ 379,327 $ 323,828 $ 702,005 $ 608,615 Anthropologie Group 401,275 362,449 748,360 673,505 Free People 206,413 180,228 387,720 339,735 Food and Beverage 5,439 6,426 10,057 12,266 - ------- - ------- - --------- - --------- Total Company $ 992,454 $ 872,931 $ 1,848,142 $ 1,634,121 - ------- - ------- - --------- - --------- Net sales by segment Retail Segment $ 902,027 $ 790,628 $ 1,677,591 $ 1,480,980 Wholesale Segment 90,427 82,303 170,551 153,141 - ------- - ------- - --------- - --------- Total Company $ 992,454 $ 872,931 $ 1,848,142 $ 1,634,121 - ------- - ------- - --------- - ---------

For the three and six months ended July 31, 2018, the gross profit rate improved by 180 basis points and 157 basis points versus the prior year’s comparable periods, respectively. The improvement in gross profit rate for both periods was driven by lower markdowns at all three brands and leverage in store occupancy cost due to strong Retail segment comparable net sales. These gains were partially offset by deleverage in delivery expense due in part to the increased penetration of the digital channel.

As of July 31, 2018, total inventory increased by $10.5 million, or 2.9%, on a year-over-year basis. Comparable Retail segment inventory increased 3% at cost.

Selling, general and administrative expenses increased by $16.8 million, or 7.6%, and $24.8 million, or 5.6%, during the three and six months ended July 31, 2018, compared to the prior year’s comparable periods, respectively. As a percentage of net sales, selling, general and administrative expenses leveraged 136 basis points and 178 basis points during the three and six months ended July 31, 2018, when compared to the prior year’s comparable periods, respectively. The dollar growth in selling, general and administrative expenses in both periods was primarily due to increased direct selling and marketing expenses to support and drive the increase in Retail segment net sales and higher bonus expense due to the strong Company performance. The leverage in both periods was primarily driven by the net sales growth, continued savings associated with the fiscal 2018 store reorganization project and the current year benefit associated with the nonrecurring store reorganization expenses incurred in the prior year.

The Company’s effective tax rate for the three months ended July 31, 2018, was 21.7% compared to 35.1% in the prior year period. The effective tax rate for the six months ended July 31, 2018 was 22.3% compared to 37.1% in the prior year period. The decrease in the effective tax rate for the three and six month periods was primarily due to the lower federal statutory rate resulting from the U.S. Tax Cuts and Jobs Act.

Net income for the three and six months ended July 31, 2018, was $93 million and $134 million, respectively, and earnings per diluted share was $0.84 and $1.22, respectively.

On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program, of which 17.9 million common shares were remaining as of July 31, 2018. No shares were repurchased during the six months ended July 31, 2018. During the year ended January 31, 2018, the Company repurchased and subsequently retired 2.1 million common shares for approximately $46 million under this program.

During the six months ended July 31, 2018, the Company opened a total of seven new locations including: three Free People stores, two Urban Outfitters stores and two Anthropologie Group stores; and closed two locations including: one Urban Outfitters store and one Anthropologie Group store.

Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 246 Urban Outfitters stores in the United States, Canada, and Europe and websites; 227 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 135 Free People stores in the United States and Canada, catalogs and websites and 10 Food and Beverage restaurants, as of July 31, 2018. Free People and Anthropologie Group wholesale sell their products through approximately 2,100 department and specialty stores worldwide, digital businesses and the Company’s Retail segment.

A conference call will be held today to discuss second quarter results and will be webcast at 5:00 pm. ET at: https://edge.media-server.com/m6/p/8f7kd45c

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: 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, overall economic and market conditions and worldwide political events and the resultant impact on consumer spending patterns, any effects of war, terrorism, and civil unrest, natural disasters or severe or unseasonable weather conditions, increases in labor costs, increases in raw material costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, the departure of one or more key senior executives, import risks, 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, risks associated with internet sales, our ability to maintain and expand our digital sales channels, response to new store concepts, our ability to integrate acquisitions, failure of our manufacturers and third-party vendors to comply with our social compliance program, changes in our effective income tax rate, the impact of the U.S. Tax Cuts and Jobs Act, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in the Company’s 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, --------------------------------- --------------------------------- 2018 2017 2018 2017 --------------- --------------- --------------- --------------- Net sales $ 992,454 $ 872,931 $ 1,848,142 $ 1,634,121 Cost of sales 636,610 575,588 1,211,638 1,096,998 - ----------- - - ----------- - - ----------- - - ----------- - Gross profit 355,844 297,343 636,504 537,123 Selling, general and administrative 238,992 222,163 465,756 440,907 expenses - ----------- - - ----------- - - ----------- - - ----------- - Income from operations 116,852 75,180 170,748 96,216 Other income, net 1,746 1,736 1,826 2,055 - ----------- - - ----------- - - ----------- - - ----------- - Income before income taxes 118,598 76,916 172,574 98,271 Income tax expense 25,789 27,001 38,505 36,418 - ----------- - - ----------- - - ----------- - - ----------- - Net income $ 92,809 $ 49,915 $ 134,069 $ 61,853 - ----------- - - ----------- - - ----------- - - ----------- - Net income per common share: Basic $ 0.85 $ 0.44 $ 1.23 $ 0.54 - ----------- - - ----------- - - ----------- - - ----------- - Diluted $ 0.84 $ 0.44 $ 1.22 $ 0.54 - ----------- - - ----------- - - ----------- - - ----------- - Weighted-average common shares outstanding: Basic 108,831,399 113,500,381 108,663,990 114,865,336 - ----------- - - ----------- - - ----------- - - ----------- - Diluted 110,433,840 113,760,647 110,091,586 115,126,977 - ----------- - - ----------- - - ----------- - - ----------- - AS A PERCENTAGE OF NET SALES Net sales 100.0 % 100.0 % 100.0 % 100.0 % Cost of sales 64.1 % 65.9 % 65.6 % 67.1 % ------------- - ------------- - ------------- - ------------- - Gross profit 35.9 % 34.1 % 34.4 % 32.9 % Selling, general and administrative 24.1 % 25.5 % 25.2 % 27.0 % expenses ------------- - ------------- - ------------- - ------------- - Income from operations 11.8 % 8.6 % 9.2 % 5.9 % Other income, net 0.1 % 0.2 % 0.1 % 0.1 % ------------- - ------------- - ------------- - ------------- - Income before income taxes 11.9 % 8.8 % 9.3 % 6.0 % Income tax expense 2.5 % 3.1 % 2.0 % 2.2 % ------------- - ------------- - ------------- - ------------- - Net income 9.4 % 5.7 % 7.3 % 3.8 % ------------- - ------------- - ------------- - ------------- -

URBAN OUTFITTERS, INC. Condensed Consolidated Balance Sheets (amounts in thousands, except share data) (unaudited) July 31, January 31, July 31, 2018 2018 2017 ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 405,727 $ 282,220 $ 276,759 Marketable securities 198,166 165,125 110,195 Accounts receivable, net of allowance for doubtful accounts 90,646 76,962 75,530 of $1,613, $1,326 and $592, respectively Inventory 375,657 351,395 365,176 Prepaid expenses and other current assets 131,572 103,055 110,017 - --------- - --------- - --------- Total current assets 1,201,768 978,757 937,677 Property and equipment, net 807,084 813,768 843,058 Marketable securities 45,514 58,688 25,960 Deferred income taxes and other assets 104,169 101,567 115,906 - --------- - --------- - --------- Total Assets $ 2,158,535 $ 1,952,780 $ 1,922,601 - --------- - --------- - --------- LIABILITIES AND SHAREHOLDERS’EQUITY Current liabilities: Accounts payable $ 149,947 $ 128,246 $ 159,756 Accrued expenses, accrued compensation and other current 279,991 231,968 210,399 liabilities - --------- - --------- - --------- Total current liabilities 429,938 360,214 370,155 Long-term debt — — — Deferred rent and other liabilities 284,925 291,663 243,633 - --------- - --------- - --------- Total Liabilities 714,863 651,877 613,788 - --------- - --------- - --------- Shareholders’ equity: Preferred shares; $.0001 par value, 10,000,000 shares authorized, — — — none issued Common shares; $.0001 par value, 200,000,000 shares authorized, 108,951,308, 108,248,568 and 111,280,653 issued and outstanding, 11 11 11 respectively Additional paid-in-capital 18,770 684 — Retained earnings 1,451,492 1,310,859 1,332,145 Accumulated other comprehensive loss (26,601 ) (10,651 ) (23,343 ) - --------- - --------- - --------- Total Shareholders’ Equity 1,443,672 1,300,903 1,308,813 - --------- - --------- - --------- Total Liabilities and Shareholders’ Equity $ 2,158,535 $ 1,952,780 $ 1,922,601 - --------- - --------- - ---------

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