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URBN’s Q2 Profits Rebound Sharply

Nachrichtenquelle: globenewswire
25.08.2020, 22:05  |  125   |   |   

PHILADELPHIA, Aug. 25, 2020 (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, BHLDN, Free People, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands, today announced net income of $34 million and earnings per diluted share of $0.35 for the three months ended July 31, 2020. For the six months ended July 31, 2020, net loss was $104 million and loss per diluted share was $1.06.

Total Company net sales for the three months ended July 31, 2020, decreased 16.5% over the same period last year to $803 million. Comparable Retail segment net sales decreased 13%, driven by negative retail store sales due to stores being closed for part of the quarter and lower store productivity once opened, partially offset by strong double-digit growth in the digital channel. By brand, comparable Retail segment net sales increased 11% at Free People and decreased 8% at Urban Outfitters and 25% at the Anthropologie Group. Total Retail segment net sales decreased 14%. Wholesale segment net sales decreased 51%.

“I’m pleased to announce URBN produced solid revenues and profits for the second quarter driven by strength in the digital channel,” said Richard A. Hayne, Chief Executive Officer. “Notably, all brands were profitable and enter the fall selling season with lean inventories and positive momentum,” 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,  
  2020     2019     2020     2019  
Net sales by brand                              
Anthropologie Group $ 295,126     $ 394,280     $ 529,201     $ 749,268  
Urban Outfitters   323,889       355,045       561,209       671,851  
Free People   178,019       205,940       285,683       392,131  
Menus & Venues   1,560       7,064       4,714       13,492  
Nuuly   4,672             10,942        
Total Company $ 803,266     $ 962,329     $ 1,391,749     $ 1,826,742  
                               
Net sales by segment                              
Retail Segment $ 757,471     $ 878,693     $ 1,318,703     $ 1,661,256  
Wholesale Segment   41,123       83,636       62,104       165,486  
Subscription Segment   4,672             10,942        
Total Company $ 803,266     $ 962,329     $ 1,391,749     $ 1,826,742  
                               

For the three months ended July 31, 2020, the gross profit rate decreased to 29.6% from 32.8% in the prior year’s comparable period. Gross profit dollars decreased 24.6% to $238.0 million from $315.9 million. The decrease in gross profit rate was primarily due to an increase in delivery and logistics expense due to penetration of the digital channel, followed by store occupancy expense rate deleverage. The deleverage in store occupancy expense was due to store closures during the quarter as well as lower store sales productivity once stores reopened. Merchandise markdowns were lower in the quarter while initial merchandise mark-up rate was flat versus the prior year’s comparable period. Both the Urban Outfitters and Free People brands delivered record low markdown rates in the quarter. Lastly, due to disciplined inventory control and better than planned product performance, inventory reserves for the Retail and Wholesale segments were reduced by $21.7 million in total during the quarter versus the prior year’s comparable period. For the six months ended July 31, 2020, the gross profit rate decreased to 18.0% from 32.0% versus the prior year’s comparable period. The decrease in the gross profit rate was primarily driven by an increase in delivery and logistics expense due to penetration of the digital channel, followed by store occupancy expense rate deleverage. The deleverage in store occupancy expense was due to mandated store closures as well as lower store sales productivity once stores reopened. Additionally, during the six months ended July 31, 2020, the Company recorded a $21.7 million year-over-year increase in inventory obsolescence reserves and a $14.5 million store impairment charge.

As of July 31, 2020, total inventory decreased by $88.3 million, or 20.1%, on a year-over-year basis. Comparable Retail segment inventory decreased 14% at cost. The decrease in inventory was due to a 14% decrease in Retail segment inventory and a 53% decrease in Wholesale segment inventory.

For the three months ended July 31, 2020, selling, general and administrative expenses decreased by $69.2 million, or 29.1%, compared to the prior year’s comparable period and expressed as a percentage of net sales, leveraged by 372 basis points. The leverage and decrease in selling, general and administrative expenses for the three months ended July 31, 2020, was primarily related to disciplined store payroll management, overall expense control measures and the benefit of COVID-19 related government relief packages. Digital marketing expenses grew during the quarter to support strong digital channel sales and customer growth. For the six months ended July 31, 2020, selling, general and administrative expenses decreased by $87.7 million, or 18.8%, compared to the prior year’s comparable period and expressed as a percentage of net sales, deleveraged by 169 basis points. The deleverage was primarily driven by an increase in digital marketing expenses in order to support strong digital channel sales and customer growth. The decrease in selling, general and administrative expenses for the six months ended July 31, 2020, was primarily due to disciplined store payroll management, overall expense control measures and the benefit of COVID-19 related government relief packages.

The Company’s effective tax rate for the three months ended July 31, 2020, was 50.1% compared to 26.0% in the prior year period. The Company’s effective tax rate for the six months ended July 31, 2020, was a benefit of 19.8% compared to an expense of 25.2% in the prior year period. The increase in expense for the three months ended July 31, 2020, was due to the partial reversal of the tax benefit recorded in the three months ended April 30, 2020, based on the improved company performance in the second quarter. The change in the effective tax rate for the six months ended July 31, 2020, was primarily driven by the year-to-date operating loss compared to operating income in the prior year period.

Net income for the three months ended July 31, 2020, was $34 million and earnings per diluted share was $0.35. Net loss for the six months ended July 31, 2020, was $104 million and loss per diluted share was $1.06.

On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. The Company did not repurchase any shares during the second quarter, while during the six months ended July 31, 2020, the Company repurchased and subsequently retired 0.5 million common shares for approximately $7 million under this program. These shares were repurchased prior to the known spread of the coronavirus pandemic in the United States which forced the Company to close its stores for an extended period of time. During the year ended January 31, 2020, the Company repurchased and subsequently retired 8.1 million common shares for approximately $217 million under this program. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a new share repurchase program. As of July 31, 2020, 25.9 million common shares were remaining under the programs.

During the six months ended July 31, 2020, the Company opened a total of five new retail locations including: three Urban Outfitters stores and two Anthropologie Group stores; and closed four retail locations including: three Urban Outfitters stores and one Free People store. During the six months ended July 31, 2020, three Urban Outfitters franchisee-owned stores and one Free People franchisee-owned store were closed.

Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 248 Urban Outfitters stores in the United States, Canada and Europe and websites; 233 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 143 Free People stores in the United States, Canada and Europe, catalogs and websites, 11 Menus & Venues restaurants, 2 Urban Outfitters franchisee-owned stores and 1 Anthropologie Group franchisee-owned store, as of July 31, 2020. Free People, Anthropologie Group and Urban Outfitters wholesale sell their products through approximately 2,300 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 5:30 pm. ET at: https://edge.media-server.com/mmc/p/9nrrdtyy

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 impacts of the coronavirus (COVID-19) pandemic, 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, 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, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions or public health crises such as the coronavirus (COVID-19) pandemic, 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 digital sales, our ability to maintain and expand our digital sales channels, response to new store concepts, our ability to integrate acquisitions, any material disruptions or security breaches with respect to our technology systems, failure of our manufacturers and third-party vendors to comply with our social compliance program, changes in our effective income tax rate (including the uncertainties associated with 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 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 Operations
(amounts in thousands, except share and per share data)
(unaudited)
           
  Three Months Ended     Six Months Ended
 
  July 31,     July 31,
 
  2020     2019     2020     2019  
                             
Net sales $ 803,266     $ 962,329     $ 1,391,749     $ 1,826,742  
Cost of sales (excluding store impairment)   565,228       646,454       1,127,340       1,241,811  
Store impairment               14,528        
Gross profit   238,038       315,875       249,881       584,931  
Selling, general and administrative expenses   168,619       237,814       379,197       466,850  
Income (loss) from operations   69,419       78,061       (129,316 )     118,081  
Other (loss) income, net   (533 )     3,498       (371 )     6,178  
Income (loss) before income taxes   68,886       81,559       (129,687 )     124,259  
Income tax expense (benefit)   34,486       21,239       (25,645 )     31,354  
Net income (loss) $ 34,400     $ 60,320     $ (104,042 )   $ 92,905  
                               
Net income (loss) per common share:                              
Basic $ 0.35     $ 0.61     $ (1.06 )   $ 0.91  
Diluted $ 0.35     $ 0.61     $ (1.06 )   $ 0.91  
                               
Weighted-average common shares outstanding:                              
Basic   97,778,749       99,095,562       97,843,796       101,722,244  
Diluted   98,104,918       99,602,465       97,843,796       102,427,040  
                               
                               
AS A PERCENTAGE OF NET SALES                              
Net sales 100.0%     100.0%     100.0%     100.0%  
Cost of sales (excluding store impairment) 70.4%     67.2%     81.0%     68.0%  
Store impairment         1.0%      
Gross profit 29.6%     32.8%     18.0%     32.0%  
Selling, general and administrative expenses 21.0%     24.7%     27.3%     25.5%  
Income (loss) from operations 8.6%     8.1%     -9.3%     6.5%  
Other (loss) income, net     0.4%         0.3%  
Income (loss) before income taxes 8.6%     8.5%     -9.3%     6.8%  
Income tax expense (benefit) 4.3%     2.2%     -1.8%     1.7%  
Net income (loss) 4.3%     6.3%     -7.5%     5.1%  
                       


 
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)
                 
  July 31,     January 31,     July 31,  
  2020     2020     2019  
ASSETS                      
Current assets:                      
Cash and cash equivalents $ 662,860     $ 221,839     $ 162,018  
Marketable securities   501       211,453       171,398  
Accounts receivable, net of allowance for doubtful accounts of $4,123, $880 and $939, respectively   60,441       88,288       95,131  
Inventory   351,771       409,534       440,087  
Prepaid expenses and other current assets   195,393       122,282       131,763  
Total current assets   1,270,966       1,053,396       1,000,397  
                       
Property and equipment, net   889,126       890,032       867,434  
Operating lease right-of-use assets   1,134,678       1,170,531       1,085,543  
Marketable securities   9,216       97,096       78,857  
Deferred income taxes and other assets   121,292       104,578       105,814  
Total Assets $ 3,425,278     $ 3,315,633     $ 3,138,045  
                       
LIABILITIES AND SHAREHOLDERS EQUITY                      
Current liabilities:                      
Accounts payable $ 207,261     $ 167,871     $ 181,955  
Current portion of operating lease liabilities   270,326       221,593       209,072  
Accrued expenses, accrued compensation and other current liabilities   293,629       249,306       235,106  
Total current liabilities   771,216       638,770       626,133  
Non-current portion of operating lease liabilities   1,102,250       1,137,495       1,090,623  
Long-term debt   120,000              
Deferred rent and other liabilities   81,219       84,013       59,885  
Total Liabilities   2,074,685       1,860,278       1,776,641  
                       
Shareholders’ equity:                      
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued                
Common shares; $.0001 par value, 200,000,000 shares authorized, 97,779,586, 97,976,815 and 97,965,012 issued and outstanding, respectively 10     10     10  
Additional paid-in-capital   9,956       9,477        
Retained earnings   1,369,830       1,473,872       1,398,681  
Accumulated other comprehensive loss   (29,203 )     (28,004 )     (37,287 )
Total Shareholders’ Equity   1,350,593       1,455,355       1,361,404  
Total Liabilities and Shareholders’ Equity $ 3,425,278     $ 3,315,633     $ 3,138,045  
                       


 
URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
       
    Six Months Ended  
    July 31,  
    2020     2019  
Cash flows from operating activities:                
Net (loss) income   $ (104,042 )   $ 92,905  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:                
Depreciation and amortization     53,388       55,395  
Non-cash lease expense     97,655       94,173  
(Benefit) provision for deferred income taxes     (17,074 )     1,107  
Share-based compensation expense     11,257       11,461  
Store impairment     14,528        
Loss on disposition of property and equipment, net     679       593  
Changes in assets and liabilities:                
Receivables     27,912       (15,032 )
Inventory     58,002       (71,899 )
Prepaid expenses and other assets     (62,170 )     (23,121 )
Payables, accrued expenses and other liabilities     94,196       16,009  
Operating lease liabilities     (59,115 )     (100,338 )
Net cash provided by operating activities     115,216       61,253  
Cash flows from investing activities:                
Cash paid for property and equipment     (72,103 )     (116,465 )
Cash paid for marketable securities     (92,949 )     (235,094 )
Sales and maturities of marketable securities     383,056       320,411  
Net cash provided by (used in) investing activities     218,004       (31,148 )
Cash flows from financing activities:                
Borrowings under long-term debt     220,000        
Repayments of long-term debt     (100,000 )      
Proceeds from the exercise of stock options           974  
Share repurchases related to share repurchase program     (7,036 )     (217,421 )
Share repurchases related to taxes for share-based awards     (3,742 )     (5,429 )
Net cash provided by (used in) financing activities     109,222       (221,876 )
Effect of exchange rate changes on cash and cash equivalents     (1,421 )     (4,471 )
Increase (decrease) in cash and cash equivalents     441,021       (196,242 )
Cash and cash equivalents at beginning of period     221,839       358,260  
Cash and cash equivalents at end of period   $ 662,860     $ 162,018  
                 


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

Urban Outfitters Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



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Disclaimer

URBN’s Q2 Profits Rebound Sharply PHILADELPHIA, Aug. 25, 2020 (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, BHLDN, Free People, …

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