Urban Outfitters Inc. on Monday reported record second-quarter net income and admitted it’s on the hunt for acquisitions.
The retailer had net income of $76 million for the three months ended July 31 and net income of $123 million for the six months ended July 31. Earnings per diluted share were 51 cents for the three months and 83 cents for the six months.
Total company net sales for the second quarter rose 12 percent over the same quarter last year to $759 million. Comparable retail segment net sales, which include the comparable direct-to-consumer channel, increased 9 percent. Comp retail segment net sales jumped 38 percent at Free People, 9 percent at Anthropologie and 5 percent at Urban Outfitters. Wholesale segment net sales rose 17 percent.
“There’s enormous growth potential in the Asian market, especially China and Hong Kong,” said Richard Hayne, chief executive officer.
Regarding acquisitions, Hayne said, “We’re in discussions with a couple folks. That’s moving along nicely and hopefully we’ll have more to report. We have the opportunity to make one or more acquisitions. We want to complement and add product expertise in areas where we don’t have it or add whole new adjacent businesses. The perfect candidate would be a slightly smaller company rather than a larger one.”
He declined to reveal potential acquisition candidates.
During the second quarter, operating income rose 24 percent to $119.3 million, from $95.9 million, in the prior quarter. For the six months, operating income rose to $192.3 million from $148.8 million.
Gross profit in the second quarter rose 17 percent to $298.5 million from $135.5 million in the year-ago second quarter.
The gross profit rate in the second quarter improved by 169 basis points versus the prior year’s comparable period. For the six months, the gross profit rate improved by 148 basis points versus last year. The improvement for both periods was due to fewer markdowns, primarily at Anthropologie.
As of July 31, total inventories increased by $24 million, or 8 percent, on a year-over-year basis. Comparable retail segment inventories were flat.
For the three months, selling, general and administrative expenses as a percentage of net sales rose by 14 basis points compared to the year-ago period. SG&A expressed as a percentage of net sales for the six months fell by 24 basis points compared to last year’s period due to the leverage of direct selling controllable expenses driven by strong positive retail segment sales. The leverage in direct-selling controllable expenses was partially offset by increases in marketing expenses.
Urban plans to open 16 Urban Outfitters next year, five of which will be in Europe; nine Anthropologie units, and 14 Free People stores in North America. The company has budgeted capital expenditure of $210 million for new stores and the expansion of the home office.
“We continue to look at the entire world as an expansion opportunity for all our brands in terms of the direct-to-consumer channel,” Hayne said. “Urban leads with 140 countries. We’re in the very early stages of realizing the worldwide potential each brand possesses.”
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)