Urban Outfitters Inc. (URBN), the retailer of apparel, footwear, and accessories, recently posted fourth-quarter 2011 earnings of 45 cents a share, falling behind the Zacks Consensus Estimate of 52 cents. However, earnings remained flat compared with the prior-year quarter, battered by mounting costs and increased concessions.
Urban Outfitters, which competes with Gap Inc. (GPS) and Abercrombie & Fitch Co. (ANF), announced that total net sales came in at $668.4 million, up 13.6% from the year-ago quarter, but fell short of the Zacks Consensus Estimate of $674.0 million. Retail segment net sales advanced 12.9% to $637.7 million, whereas wholesale segment’s net sales ascended 30.8% to $30.7 million.
The company also portrayed total net sales by brands. Sales grew 13.3% to $321.8 million at Urban Outfitters, 10.0% to $283.4 million at Anthropologie, 35.2% to $58.9 million at Free People and 38.4% to $4.3 million at other.
The company hinted that comparable retail segment net sales climbed 4.0%, whereas comparable store net sales inched down 2.0% during the quarter. Comparable retail segment net sales by brands rose – 28.0% at Free People, 1.0% at Anthropologie and 5.0% at Urban Outfitters.
Gross profit, aided by top-line growth, climbed 7.9% to $265.1 million despite the increase in cost of sales by 17.6%. Urban Outfitters notified that gross profit margin plunged 208 basis points to 39.7%. Operating income inched up 1.4% to $120.3 million, whereas operating margin came in at 18.0% during the quarter.
During fiscal 2011, Urban Outfitters opened 46 new stores – 16 Anthropologie stores, 21 Urban Outfitters stores and 9 Free People stores. The company plans to open about 50-55 new stores in the coming year. During the quarter, the company opened 10 Urban Outfitters stores, 3 Anthropologie stores and 4 Free People stores.
Urban Outfitters ended the quarter with cash and cash equivalents of $340.3 million and shareholders’ equity of $1,410.9 million. On November 16, 2010, the company authorized the repurchase of 10.0 million additional shares of the company, enhancing the company’s previously announced repurchase program. During fiscal 2011, the company bought back 6.3 million shares, for a total of $205.0 million.
Currently, Urban Outfitters holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
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