Form 8-K URBAN OUTFITTERS INC For: Mar 01

March 2, 2022 11:22 AM EST

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Exhibit 99.1

URBAN OUTFITTERS, INC.

Fourth Quarter Results

Philadelphia, PA – March 1, 2022

 

For Immediate Release

 

Contact:

 

Oona McCullough

 

 

 

 

Executive Director of Investor Relations

 

 

 

 

(215) 454-4806

URBN Reports Q4 Results

PHILADELPHIA, PA, March 1, 2022 – 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, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands, today announced net income of $41 million and earnings per diluted share of $0.41 for the three months ended January 31, 2022. For the year ended January 31, 2022, net income was $311 million and earnings per diluted share were a record $3.13.

Due to the material impact of COVID-19 on our business operations in fiscal 2021, including mandated store closures, this release includes a comparison of fiscal 2022 results to fiscal 2020. Management views the comparison of fiscal 2022 results to fiscal 2020 as a meaningful measurement of the Company’s business performance. In addition, adjusted results for the three months ended January 31, 2020, exclude store and goodwill impairment charges and income tax expense related to valuation allowances attributable to net losses of certain foreign operations. See “Reconciliation of Non-GAAP Financial Measures” included at the end of this release for fiscal 2020 adjustments. There were no adjusted financial measures for fiscal 2022.

Total Company net sales for the three months ended January 31, 2022, were a record $1.33 billion. Net sales increased 13.9% compared to the three months ended January 31, 2020. Comparable Retail segment net sales increased 14%, driven by strong double-digit growth in digital channel sales, partially offset by low double-digit negative retail store sales primarily due to reduced store traffic. By brand, comparable Retail segment net sales increased 49% at the Free People Group, 14% at the Anthropologie Group and 3% at Urban Outfitters. Total Retail segment net sales increased 15%. Wholesale segment net sales decreased 22% primarily from reducing the Free People Group’s sales to promotional wholesale customers. Nuuly segment net sales increased by $11.3 million driven by the continued expansion of the number of subscribers since its launch at the end of the second quarter of fiscal 2020.

For the year ended January 31, 2022, total Company net sales increased 14.2% compared to the year ended January 31, 2020. Comparable Retail segment net sales increased 16%, driven by strong double-digit growth in digital channel sales, partially offset by low double-digit negative retail store sales due to reduced store traffic. Wholesale segment net sales decreased 23% primarily from reducing the Free People Group’s sales to promotional wholesale customers. Nuuly segment net sales increased by $39.7 million driven by the continued expansion of the number of subscribers since its launch at the end of the second quarter of fiscal 2020.

“Record fourth quarter sales were driven by positive ‘comps’ at all brands,” said Richard A. Hayne, Chief Executive Officer. “Strong customer response to our early spring offerings bode well for continued sales growth in the first quarter,” finished Mr. Hayne.

Net sales by brand and segment for the three and twelve-month periods were as follows:

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

Net sales by brand

 

 

 

 

 

 

 

 

 

 

 

Anthropologie Group

$

558,699

 

 

$

431,380

 

 

$

491,146

 

Urban Outfitters

 

474,385

 

 

 

428,102

 

 

 

449,939

 

Free People Group

 

276,190

 

 

 

219,279

 

 

 

215,765

 

Menus & Venues

 

5,648

 

 

 

2,980

 

 

 

6,759

 

Nuuly (1)

 

17,277

 

 

 

6,652

 

 

 

5,969

 

Total Company

$

1,332,199

 

 

$

1,088,393

 

 

$

1,169,578

 

 


 

 

 

 

 

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

Net sales by segment

 

 

 

 

 

 

 

 

 

 

 

Retail Segment

$

1,258,268

 

 

$

1,013,889

 

 

$

1,090,552

 

Wholesale Segment

 

56,654

 

 

 

67,852

 

 

 

73,057

 

Nuuly Segment (1)

 

17,277

 

 

 

6,652

 

 

 

5,969

 

Total Company

$

1,332,199

 

 

$

1,088,393

 

 

$

1,169,578

 

 

 

Twelve Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

Net sales by brand

 

 

 

 

 

 

 

 

 

 

 

Anthropologie Group

$

1,794,266

 

 

$

1,319,063

 

 

$

1,639,123

 

Urban Outfitters

 

1,681,559

 

 

 

1,383,361

 

 

 

1,496,249

 

Free People Group

 

1,003,644

 

 

 

711,631

 

 

 

813,371

 

Menus & Venues

 

21,570

 

 

 

11,358

 

 

 

27,045

 

Nuuly (1)

 

47,724

 

 

 

24,336

 

 

 

8,001

 

Total Company

$

4,548,763

 

 

$

3,449,749

 

 

$

3,983,789

 

 

 

Twelve Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

Net sales by segment

 

 

 

 

 

 

 

 

 

 

 

Retail Segment

$

4,248,681

 

 

$

3,228,200

 

 

$

3,648,938

 

Wholesale Segment

 

252,358

 

 

 

197,213

 

 

 

326,850

 

Nuuly Segment (1)

 

47,724

 

 

 

24,336

 

 

 

8,001

 

Total Company

$

4,548,763

 

 

$

3,449,749

 

 

$

3,983,789

 

 

(1)

The Nuuly segment (formerly known as the Subscription segment) is comprised of the Nuuly Rent and Nuuly Thrift brands. Nuuly Rent began operations on July 30, 2019. Nuuly Thrift began operations on October 12, 2021.

For the three months ended January 31, 2022, the gross profit rate decreased by 97 basis points and the adjusted gross profit rate decreased by 222 basis points compared to the three months ended January 31, 2020. Gross profit dollars increased by $33.5 million to $367.3 million from $333.8 million in the three months ended January 31, 2020. Adjusted gross profit dollars increased by $18.9 million from $348.4 million in the three months ended January 31, 2020. The decrease in adjusted gross profit rate was primarily due to lower initial merchandise markups and an increase in delivery and logistics expenses. Lower initial merchandise markups are primarily due to higher inbound transportation expenses. Delivery expense deleveraged due to the increased penetration of the digital channel and increases in carrier costs per package. Logistics expense deleveraged due to increased wages at our distribution and fulfillment centers in order to attract and retain appropriate levels of employees and the increased penetration of the digital channel. This decrease in adjusted gross profit rate was partially offset by a reduction in merchandise markdown rates in the Retail segment and a leverage in store occupancy expense primarily due to the increased penetration of the digital channel in Retail segment net sales.

For the year ended January 31, 2022, the gross profit rate increased by 172 basis points compared to the year ended January 31, 2020. Gross profit dollars increased by $254.1 million to $1.49 billion from $1.24 billion in the year ended January 31, 2020. The increase in gross profit rate was primarily due to record low merchandise markdown rates for all three brands in the Retail segment for the year and leverage in store occupancy expense due to the increased penetration of the digital channel in Retail segment net sales. This was partially offset by a deleverage in delivery and logistics expenses and lower initial merchandise markups. Delivery expense deleveraged due to the increased penetration of the digital channel and increases in carrier costs per package. Logistics expense deleveraged due to increased wages at our distribution and fulfillment centers in order to attract and retain appropriate levels of employees and the increased penetration of the digital channel.

 


 

 

 

 

Lower initial merchandise markups are primarily due to higher inbound transportation expenses. Additionally, during the year ended January 31, 2020, the Company recorded a $14.6 million store impairment charge.

As of January 31, 2022, total inventory increased by $160.2 million, or 39.1%, compared to total inventory as of January 31, 2020. Total Retail segment inventory and Retail segment comparable inventory at cost increased by 46% and 26%, respectively. Both increases were primarily due to the Company continuing to bring certain product categories in earlier to protect against ongoing supply chain disruptions and delays and the increase in inbound transportation costs.

For the three months ended January 31, 2022, selling, general and administrative expenses increased by $32.7 million, or 11.6%, compared to the three months ended January 31, 2020, and expressed as a percentage of net sales, leveraged 48 basis points. The leverage in SG&A as a rate to sales was primarily related to the increased penetration of the digital channel in Retail segment net sales and disciplined store payroll management and overall expense control that was partially offset by an increase in digital marketing and creative expenses during the quarter to support the strong digital sales and customer growth. The growth in SG&A dollars was primarily driven by an increase in digital marketing and creative expenses during the quarter to support the strong digital sales and customer growth partially offset by the reduction in direct selling expenses due to the lower retail store net sales. During the three months ended January 31, 2020, the Company recorded a $13.9 million charge related to goodwill impairment of the Menus & Venues division.

For the year ended January 31, 2022, selling, general, and administrative expense increased by $91.4 million, or 9.2%, compared to the year ended January 31, 2020, and expressed as a percentage of net sales, leveraged 109 basis points. The leverage in selling, general and administrative expenses as a rate to sales was primarily related to disciplined store payroll management and overall expense control and the increased penetration of the digital channel in Retail segment net sales, that was partially offset by a deleverage in digital marketing and creative expenses during the period to support the strong digital sales and customer growth. The increase in dollars was primarily driven by the increase in digital marketing and creative expenses to support the overall growth of the Company partially offset by the reduction in direct selling expenses due to the lower retail store net sales. During the year ended January 31, 2020, the Company recorded a charge of approximately $13.9 million related to goodwill impairment of the Menus & Venues division.

The Company’s effective tax rate for the three months ended January 31, 2022, was 21.1% compared to 50.7% in the three months ended January 31, 2020. The adjusted effective tax rate for the three months ended January 31, 2020 was 28.0%. The decrease in the adjusted effective tax rate for the three months ended January 31, 2022, was primarily due to the ratio of foreign taxable profits to global taxable profits. The Company’s effective tax rate for the year ended January 31, 2022, was 23.2% compared to 29.9% in the year ended January 31, 2020. The decrease in the effective tax rate for the year ended January 31, 2022, was primarily due to the ratio of foreign taxable profits to global taxable profits.

Net income for the three months ended January 31, 2022, was $41 million and earnings per diluted share were $0.41. Net income for the year ended January 31, 2022, was $311 million and earnings per diluted share were a record $3.13.

On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase 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. During the year ended January 31, 2022, the Company repurchased and subsequently retired 2.0 million common shares for approximately $56 million. During the year ended January 31, 2021, the Company repurchased and subsequently retired 0.5 million common shares for approximately $7 million. As of January 31, 2022, 23.9 million common shares were remaining under the programs.

During the year ended January 31, 2022, the Company opened a total of 56 new retail locations including: 29 Free People Group stores (including 18 FP Movement stores), 17 Urban Outfitters stores, 9 Anthropologie Group stores and 1 Menus & Venues restaurant; and closed 18 retail locations including: 8 Anthropologie Group stores, 5 Free People Group stores, 3 Urban Outfitters stores and 2 Menus & Venues restaurants. During the year ended January 31, 2022, 1 Urban Outfitters franchisee-owned store and 1 Anthropologie Group franchisee-owned store were opened.

Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 261 Urban Outfitters stores in the United States, Canada and Europe and websites; 238 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 173 Free People stores in the United States, Canada and Europe, catalogs and websites, 10 Menus & Venues restaurants, 2 Urban Outfitters franchisee-owned stores and 1 Anthropologie Group franchisee-owned store, as of January 31, 2022. Free People, FP Movement and Urban Outfitters wholesale sell their products through department and specialty stores worldwide, digital businesses and the Company’s Retail segment.

 


 

 

 

 

A conference call will be held today to discuss fourth quarter results and will be webcast at 5:15 pm. ET at: https://edge.media-server.com/mmc/p/8gen97mq

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 public health crises such as the coronavirus (COVID-19) pandemic, overall economic and market conditions and worldwide political events and the resultant impact on consumer spending patterns, 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, 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 (including as a result of climate change) or public health crises, 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, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), 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, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, 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 Income

(amounts in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

1,332,199

 

 

$

1,088,393

 

 

$

1,169,578

 

Cost of sales (excluding store impairment)

 

964,903

 

 

 

798,341

 

 

 

821,174

 

Store impairment

 

 

 

 

968

 

 

 

14,611

 

          Gross profit

 

367,296

 

 

 

289,084

 

 

 

333,793

 

Selling, general and administrative expenses

 

313,988

 

 

 

254,304

 

 

 

281,307

 

Goodwill impairment

 

 

 

 

 

 

 

13,911

 

          Income from operations

 

53,308

 

 

 

34,780

 

 

 

38,575

 

Other (loss) income, net

 

(1,432

)

 

 

802

 

 

 

1,041

 

         Income before income taxes

 

51,876

 

 

 

35,582

 

 

 

39,616

 

Income tax expense

 

10,924

 

 

 

7,008

 

 

 

20,077

 

          Net income

$

40,952

 

 

$

28,574

 

 

$

19,539

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

       Basic

$

0.42

 

 

$

0.29

 

 

$

0.20

 

       Diluted

$

0.41

 

 

$

0.29

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

       Basic

 

97,467,049

 

 

 

97,798,872

 

 

 

97,976,236

 

       Diluted

 

98,738,272

 

 

 

99,085,513

 

 

 

98,934,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS A PERCENTAGE OF NET SALES

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Cost of sales (excluding store impairment)

 

72.4

%

 

 

73.3

%

 

 

70.2

%

Store impairment

 

 

 

 

0.1

%

 

 

1.3

%

         Gross profit

 

27.6

%

 

 

26.6

%

 

 

28.5

%

Selling, general and administrative expenses

 

23.6

%

 

 

23.4

%

 

 

24.1

%

Goodwill impairment

 

 

 

 

 

 

 

1.1

%

          Income from operations

 

4.0

%

 

 

3.2

%

 

 

3.3

%

Other (loss) income, net

 

(0.1

%)

 

 

0.1

%

 

 

0.1

%

         Income before income taxes

 

3.9

%

 

 

3.3

%

 

 

3.4

%

Income tax expense

 

0.8

%

 

 

0.7

%

 

 

1.7

%

          Net income

 

3.1

%

 

 

2.6

%

 

 

1.7

%

 

 

 

 

 

 

 


 

 

 

 

 

URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

(amounts in thousands, except share and per share data)

(unaudited)

 

 

Twelve Months Ended

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

4,548,763

 

 

$

3,449,749

 

 

$

3,983,789

 

Cost of sales (excluding store impairment)

 

3,054,813

 

 

 

2,572,347

 

 

 

2,729,352

 

Store impairment

 

 

 

 

15,496

 

 

 

14,611

 

          Gross profit

 

1,493,950

 

 

 

861,906

 

 

 

1,239,826

 

Selling, general and administrative expenses

 

1,085,384

 

 

 

857,934

 

 

 

993,990

 

Goodwill impairment

 

 

 

 

 

 

 

13,911

 

          Income from operations

 

408,566

 

 

 

3,972

 

 

 

231,925

 

Other (loss) income, net

 

(3,935

)

 

 

(459

)

 

 

7,795

 

         Income before income taxes

 

404,631

 

 

 

3,513

 

 

 

239,720

 

Income tax expense

 

94,015

 

 

 

2,277

 

 

 

71,624

 

          Net income

$

310,616

 

 

$

1,236

 

 

$

168,096

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

       Basic

$

3.17

 

 

$

0.01

 

 

$

1.68

 

       Diluted

$

3.13

 

 

$

0.01

 

 

$

1.67

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

       Basic

 

98,022,583

 

 

 

97,817,651

 

 

 

99,833,011

 

       Diluted

 

99,268,705

 

 

 

98,522,776

 

 

 

100,588,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS A PERCENTAGE OF NET SALES

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Cost of sales (excluding store impairment)

 

67.2

%

 

 

74.6

%

 

 

68.5

%

Store impairment

 

 

 

 

0.4

%

 

 

0.4

%

         Gross profit

 

32.8

%

 

 

25.0

%

 

 

31.1

%

Selling, general and administrative expenses

 

23.8

%

 

 

24.9

%

 

 

25.0

%

Goodwill impairment

 

 

 

 

 

 

 

0.3

%

          Income from operations

 

9.0

%

 

 

0.1

%

 

 

5.8

%

Other (loss) income, net

 

(0.1

%)

 

 

(0.0

%)

 

 

0.2

%

         Income before income taxes

 

8.9

%

 

 

0.1

%

 

 

6.0

%

Income tax expense

 

2.1

%

 

 

0.1

%

 

 

1.8

%

          Net income

 

6.8

%

 

 

0.0

%

 

 

4.2

%

 


 

 

 

 

 

URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(amounts in thousands, except share data)

(unaudited)

 

 

 

January 31,

 

 

January 31,

 

 

January 31,

 

 

2022

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

    Cash and cash equivalents

$

206,575

 

 

$

395,635

 

 

$

221,839

 

    Marketable securities

 

239,420

 

 

 

174,695

 

 

 

211,453

 

    Accounts receivable, net of allowance for doubtful accounts

         of $1,348, $4,028 and $880, respectively

 

63,760

 

 

 

89,952

 

 

 

88,288

 

    Inventory

 

569,699

 

 

 

389,618

 

 

 

409,534

 

    Prepaid expenses and other current assets

 

206,293

 

 

 

173,432

 

 

 

122,282

 

            Total current assets

 

1,285,747

 

 

 

1,223,332

 

 

 

1,053,396

 

Property and equipment, net

 

1,145,085

 

 

 

967,422

 

 

 

890,032

 

Operating lease right-of-use assets

 

1,000,255

 

 

 

1,114,762

 

 

 

1,170,531

 

Marketable securities

 

223,557

 

 

 

123,662

 

 

 

97,096

 

Deferred income taxes and other assets

 

136,703

 

 

 

117,167

 

 

 

104,578

 

           Total Assets

$

3,791,347

 

 

$

3,546,345

 

 

$

3,315,633

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

    Accounts payable

$

304,246

 

 

$

237,386

 

 

$

167,871

 

    Current portion of operating lease liabilities

 

236,315

 

 

 

254,703

 

 

 

221,593

 

    Accrued expenses, accrued compensation and other

         current liabilities

 

440,912

 

 

 

414,043

 

 

 

249,306

 

           Total current liabilities

 

981,473

 

 

 

906,132

 

 

 

638,770

 

Non-current portion of operating lease liabilities

 

951,080

 

 

 

1,074,009

 

 

 

1,137,495

 

Long-term debt

 

 

 

 

 

 

 

 

Deferred rent and other liabilities

 

113,054

 

 

 

88,846

 

 

 

84,013

 

           Total Liabilities

 

2,045,607

 

 

 

2,068,987

 

 

 

1,860,278

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

    Preferred shares; $.0001 par value, 10,000,000 shares

         authorized, none issued

 

 

 

 

 

 

 

 

    Common shares; $.0001 par value, 200,000,000 shares

         authorized, 96,431,044, 97,815,985 and

         97,976,815 shares issued and outstanding, respectively

10

 

 

10

 

 

10

 

    Additional paid-in-capital

 

 

 

 

19,360

 

 

 

9,477

 

    Retained earnings

 

1,770,560

 

 

 

1,475,108

 

 

 

1,473,872

 

    Accumulated other comprehensive loss

 

(24,830

)

 

 

(17,120

)

 

 

(28,004

)

           Total Shareholders’ Equity

 

1,745,740

 

 

 

1,477,358

 

 

 

1,455,355

 

           Total Liabilities and Shareholders’ Equity

$

3,791,347

 

 

$

3,546,345

 

 

$

3,315,633

 


 


 

 

 

 

URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

 

 

Twelve Months Ended

 

 

 

January 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

310,616

 

 

$

1,236

 

 

$

168,096

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

105,672

 

 

 

103,771

 

 

 

112,256

 

Non-cash lease expense

 

 

193,032

 

 

 

197,088

 

 

 

190,652

 

(Benefit) provision for deferred income taxes

 

 

(2,695

)

 

 

(14,270

)

 

 

1,451

 

Share-based compensation expense

 

 

25,741

 

 

 

20,300

 

 

 

21,109

 

Goodwill impairment

 

 

 

 

 

 

 

 

13,911

 

Store impairment

 

 

 

 

 

15,496

 

 

 

14,611

 

Loss on disposition of property and equipment, net

 

 

1

 

 

 

779

 

 

 

1,643

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Receivables

 

 

26,029

 

 

 

(1,223

)

 

 

(7,825

)

Inventory

 

 

(181,898

)

 

 

22,381

 

 

 

(39,101

)

Prepaid expenses and other assets

 

 

(10,209

)

 

 

(25,239

)

 

 

(16,308

)

Payables, accrued expenses and other liabilities

 

 

124,840

 

 

 

152,905

 

 

 

22,661

 

Operating lease liabilities

 

 

(231,810

)

 

 

(187,410

)

 

 

(209,263

)

Net cash provided by operating activities

 

 

359,319

 

 

 

285,814

 

 

 

273,893

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for property and equipment

 

 

(262,429

)

 

 

(159,242

)

 

 

(217,433

)

Cash paid for marketable securities

 

 

(505,936

)

 

 

(338,918

)

 

 

(397,220

)

Sales and maturities of marketable securities

 

 

280,701

 

 

 

396,260

 

 

 

428,508

 

Net cash used in investing activities

 

 

(487,664

)

 

 

(101,900

)

 

 

(186,145

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings under debt

 

 

 

 

 

220,000

 

 

 

 

Repayments of debt

 

 

 

 

 

(220,000

)

 

 

 

Proceeds from the exercise of stock options

 

 

3,290

 

 

 

495

 

 

 

974

 

Share repurchases related to share repurchase program

 

 

(55,765

)

 

 

(7,036

)

 

 

(217,421

)

Share repurchases related to taxes for share-based awards

 

 

(7,790

)

 

 

(3,876

)

 

 

(5,600

)

Net cash used in financing activities

 

 

(60,265

)

 

 

(10,417

)

 

 

(222,047

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(450

)

 

 

299

 

 

 

(2,122

)

(Decrease) increase in cash and cash equivalents

 

 

(189,060

)

 

 

173,796

 

 

 

(136,421

)

Cash and cash equivalents at beginning of period

 

 

395,635

 

 

 

221,839

 

 

 

358,260

 

Cash and cash equivalents at end of period

 

$

206,575

 

 

$

395,635

 

 

$

221,839

 

 


 


 

 

 

 

 

Important Information Regarding Non-GAAP Financial Measures

In addition to evaluating the financial condition and results of our operations in accordance with U.S. generally accepted accounting principles (“GAAP”), from time to time our management evaluates and analyzes results and any impact on the Company of certain events outside of normal, or “core,” business and operations, by considering adjusted financial measures not prepared in accordance with GAAP. Examples of items that we consider non-core include store and goodwill impairment charges and income tax expense related to valuation allowances attributable to net losses of certain foreign operations. In order to improve the transparency of our disclosures, provide a meaningful presentation of results from our core business operations and improve period-over-period comparability, we have included certain adjusted financial measures for fiscal 2020 that exclude the impact of these non-core business items. There were no adjusted financial measures for fiscal 2022.

We believe these adjusted financial measures are important indicators of our recurring results of operations because they exclude items that may not be indicative of, or are unrelated to, our underlying results of operations and provide a useful baseline for analyzing trends in our underlying business. Management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the Company’s financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company’s financial position, results of operations or cash flows and should therefore be considered in assessing the Company’s actual and future financial condition and performance. These adjusted financial measures are not consistent with GAAP and may not be calculated the same as similarly titled measures used by other companies.


 


 

 

 

 

 

URBAN OUTFITTERS, INC.

Reconciliation of Non-GAAP Financial Measures

(amounts in thousands, except per share data)

(unaudited)

 

Reconciliation of Adjusted Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2020

 

 

$'s

 

% of Net Sales

 

 

$'s

 

% of Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (GAAP)

$

367,296

 

 

27.6

%

 

$

333,793

 

 

28.5

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Store impairment charges (a)

 

 

 

 

 

 

 

14,611

 

 

 

 

Adjusted gross profit (Non-GAAP)

$

367,296

 

 

27.6

%

 

$

348,404

 

 

29.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Income from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2020

 

 

$'s

 

% of Net Sales

 

 

$'s

 

% of Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations (GAAP)

$

53,308

 

 

4.0

%

 

$

38,575

 

 

3.3

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Store impairment charges (a)

 

 

 

 

 

 

 

14,611

 

 

 

 

Goodwill impairment charge (b)

 

 

 

 

 

 

 

13,911

 

 

 

 

Adjusted income from operations (Non-GAAP)

$

53,308

 

 

4.0

%

 

$

67,097

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Income Tax Expense and Adjusted Effective Tax Rate:

 

 

Three Months Ended

 

 

January 31,

 

 

2022

 

 

2020

 

 

$'s

 

 

 

 

 

$'s

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes (GAAP)

$

51,876

 

 

 

 

 

$

39,616

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Store impairment charges (a)