US: Urban Outfitters income slides despite sales boost
Lifestyle fashion company Urban Outfitters has announced earnings of US$41m and $199m for the fourth quarter and year ended 31 January respectively. Both were down on last year's Q4 net income of $53.6m and full-year income of $160.2m.
The company, which operates under the Anthropologie, Free People, Terrain and Urban Outfitters brands, said total Q4 sales reached $508m, an increase of 9% over the comparable quarter last year. Same-store sales, which included direct-to-consumer channels, increased 3% for the quarter.
Total company net sales for the year increased 22%, to $1.8bn.
Q4 gross profit margin declined by 555 basis points versus the prior year's comparable period. This decrease is primarily due to a higher rate of applied and anticipated merchandise markdowns to clear seasonal inventory.
Inventories decreased by $2.2m or 1% on a year-over-year basis as comparable store inventory declines more than offset additions to inventories for new stores, the company said.
For the fourth quarter and year ended 31 January, selling, general and administrative expenses, expressed as a percentage of net sales, decreased by 73 and 76 basis points, respectively, versus the prior year comparable periods.
"We are pleased to announce healthy fourth quarter earnings despite an uncertain and challenging environment,'' said Glen T Senk, chief executive officer. "We are particularly proud of our team's ability to execute two critical tasks during the quarter: reducing 'comp' inventory levels by 13% versus the prior year, and implementing measurable cost control initiatives resulting in SG&A expense improvements of 73 basis points versus the prior year."
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