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.”
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye