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Urban Outfitters reported record Q1 sales

Staff writer ▼ | May 19, 2015
Urban Outfitters announced net income of $33 million for the three months ended April 30, 2015. Earnings per diluted share were $0.25 for the three months ended April 30, 2015.
Urban Outfitters
Urban Outfitters   Earnings per diluted share were $0.25
Total company net sales for the first quarter of fiscal 2016 increased 8% over the same quarter last year to a record $739 million. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, increased 4%. Comparable Retail segment net sales increased 17% at Free People, 5% at Urban Outfitters and 1% at the Anthropologie Group. Wholesale segment net sales rose 18%.

For the three months ended April 30, 2015, the gross profit rate decreased by 141 basis points versus the prior year's comparable period. The decline in gross profit rate was primarily due to lower initial margins at the Urban Outfitters Brand and higher delivery and fulfillment expense across the entire company.

The deleverage in delivery and fulfillment expenses were partially due to the increase in direct-to-consumer penetration and the beginning of the South Carolina fulfillment center transition to Gap, Pennsylvania.

As of April 30, 2015, total inventories increased by $49 million, or 14%, on a year-over-year basis. The growth in total inventories is primarily related to an increase in comparable Retail segment inventories and the acquisition of inventory to stock new and non-comparable stores. Comparable Retail segment inventories increased 8% at cost while decreasing 5% in units.

For the three months ended April 30, 2015, selling, general and administrative expenses, expressed as a percentage of net sales, increased by 13 basis points when compared to the prior year period. The increase was primarily due to increased marketing and technology expenses that were used to drive higher direct-to-consumer traffic.

The company's effective tax rate for the first quarter of fiscal 2016 was 35.6% compared to 37.0% in the prior year period. The tax rate variance is due to state tax adjustments in the prior year quarter.

On May 27, 2014, the Board of Directors authorized the repurchase of 10.0 million common shares under a share repurchase program. During fiscal 2015, the company repurchased and retired 7.7 million common shares for approximately $258 million under this authorization. During the first quarter of fiscal 2016, the company repurchased 0.4 million shares for approximately $17 million under this authorization.

On August 27, 2013, the Board of Directors authorized the repurchase of 10 million common shares under a share repurchase program. During the first quarter of fiscal 2015, the company repurchased and retired 9.7 million common shares for approximately $353 million completing the August 27, 2013 share repurchase authorization.

On February 23, 2015, the Board of Directors authorized the repurchase of 20 million shares under a new share repurchase program. No shares have been repurchased under this authorization.

During the three months ended April 30, 2015, the company opened a total of 7 new stores including: 4 Free People stores, 2 Anthropologie Group stores and 1 Urban Outfitters store. The company closed 1 Urban Outfitters store.


 

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