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 $77 million and record earnings per diluted share of $0.78 for the three months ended October 31, 2020. For the nine months ended October 31, 2020, net loss was $27 million and loss per diluted share was $0.28.
Total Company net sales for the three months ended October 31, 2020, decreased 1.8% over the same period last year to $970 million. Comparable Retail segment net sales were flat as a result of negative retail store sales driven by lower store productivity due to reduced store traffic, offset by strong double-digit growth in the digital channel. By brand, comparable Retail segment net sales increased 17% at Free People and 4% at Urban Outfitters and decreased 9% at the Anthropologie Group. Wholesale segment net sales decreased 24%.
“I am pleased to announce URBN delivered record Q3 earnings per share in spite of an incredibly difficult operating environment,” said Richard A. Hayne, Chief Executive Officer. “Our 38% increase in net profits was driven by strong product assortments combined with tight control of inventory and expenses,” finished Mr. Hayne.
For the three months ended October 31, 2020, the gross profit rate increased by 79 basis points versus the prior year’s comparable period. Gross profit dollars increased 0.6% to $322.9 million from $321.1 million. The increase in gross profit rate was due in part to record low merchandise markdowns in the Retail segment. The record low Retail segment markdown rate was driven by improvement at all three brands with the Urban Outfitters and Free People brands recording significant improvement. The Wholesale segment also delivered healthy improvement in merchandise margins due to lower discounts and allowances. Additionally, gross profit improved as a result of the benefits associated with negotiated rent concessions with landlords and European government assistance programs. These were partially offset by an increase in delivery and logistics expense primarily due to the penetration of the digital channel.
For the nine months ended October 31, 2020, the gross profit rate decreased to 24.3% from 32.2% in the prior year’s comparable period. The decrease in the gross profit rate was primarily driven by an increase in delivery and logistics expense primarily due to penetration of the digital channel, followed by store occupancy expense rate deleverage. The deleverage in store occupancy expense was due to lower sales as a result of mandated store closures as well as lower store traffic due to the COVID-19 pandemic. Additionally, during the nine months ended October 31, 2020, the Company recorded a $15.9 million year-over-year increase in inventory obsolescence reserves and a $14.5 million store impairment charge.
As of October 31, 2020, total inventory decreased by $42.3 million, or 8.0%, on a year-over-year basis. The decrease in total inventory was primarily due to an 11% decrease in comparable Retail segment inventory at cost.
Net income for the three months ended October 31, 2020, was $77 million and earnings per diluted share was $0.78. Net loss for the nine months ended October 31, 2020, was $27 million and loss per diluted share was $0.28.
details at: http://investor.urbn.com/news-releases/news-release-details/urbn-profits-jump-38-and-produce-record-q3-eps