SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended July 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File Number 0-16999
-----------------------
Urban Outfitters, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2003332
------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1809 Walnut Street, Philadelphia, PA 19103
--------------------------------------- ----------
(Address of principal executive office) (Zip Code)
(215) 564-2313
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
---------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Title of Each Class Number of Shares Outstanding
of Common Stock at August 31, 1998
------------------- ----------------------------
Common shares, par value, $.0001 per share 17,752,954
<PAGE>
INDEX
PAGE
PART I Financial Information
ITEM 1 Financial Statements
- ------
Condensed Consolidated Balance Sheets at July 31, 1998
(Unaudited), January 31, 1998 and July 31, 1997 (Unaudited) 2
Consolidated Statements of Income for the three and
six months ended July 31, 1998 and 1997 (Unaudited) 3
Consolidated Statements of Changes in Shareholders'
Equity (Unaudited) 4
Consolidated Statements of Cash Flows for the
six months ended July 31, 1998 and 1997 (Unaudited) 5
Notes to Consolidated Financial Statements 6 - 7
ITEM 2 Management's Discussion and Analysis of Financial 8 - 13
- ----- Condition and Results of Operations
PART II Other Information
ITEM 6 Exhibits and Reports on Form 8-K 13
- -----
SIGNATURES 14
1
<PAGE>
URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
July 31, 1998 January 31, 1998 July 31, 1997
(Unaudited) (1) (Unaudited)
------------- ---------------- -------------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents..................................................... $ 22,984 $ 26,712 $ 18,856
Marketable securities......................................................... 11,732 10,865 10,507
Accounts receivable, net of allowance for
doubtful accounts of $792, $616 and $749 at July 31, 1998, January 31, 1998
and July 31, 1997, respectively ............................................ 4,681 4,497 4,782
Inventory..................................................................... 27,073 17,128 20,300
Prepaid expenses and other current assets..................................... 7,607 6,591 6,613
-------- -------- --------
Total current assets............................................................ 74,077 65,793 61,058
Property and equipment, less accumulated depreciation and amortization ......... 34,810 26,893 24,675
Marketable securities........................................................... 11,882 11,993 11,813
Other assets.................................................................... 4,576 2,745 1,523
-------- -------- --------
$125,345 $107,424 $ 99,069
======== ======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable.............................................................. $ 17,650 $ 10,386 $ 10,847
Accrued expenses and other current liabilities................................ 7,100 3,274 4,459
-------- -------- --------
Total current liabilities....................................................... 24,750 13,660 15,306
Accrued rent and other liabilities.............................................. 3,419 3,106 2,769
-------- -------- --------
Total liabilities............................................................... 28,169 16,766 18,075
-------- -------- --------
Shareholders' equity:
Preferred shares; $.0001 par, 10,000,000 authorized, none issued.............. -- -- --
Common shares; $.0001 par, 50,000,000 shares authorized, 17,784,954,
17,649,360 and 17,588,696 issued at July 31, 1998, January 31, 1998, and
July 31, 1997, respectively ................................................ 2 2 2
Additional paid-in capital.................................................... 22,771 21,482 20,420
Retained earnings............................................................. 74,714 69,174 60,572
Cumulative translation adjustment ............................................ (311) -- --
-------- -------- --------
Total shareholders' equity...................................................... 97,176 90,658 80,994
-------- -------- --------
$125,345 $107,424 $ 99,069
======== ======== ========
</TABLE>
(1) Derived from audited financial statements.
See accompanying notes
2
<PAGE>
URBAN OUTFITTERS, INC.
Consolidated Statements of Income
(in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended July 31 Six Months Ended July 31
----------------------------- -----------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 48,068 $ 41,316 $ 87,452 $ 78,513
Cost of sales 23,118 20,966 41,937 39,555
---------- ---------- ---------- ----------
Gross profit 24,950 20,350 45,515 38,958
Selling, general and administrative expenses 19,568 15,824 36,967 30,586
---------- ---------- ---------- ----------
Income from operations 5,382 4,526 8,548 8,372
Interest (income) (547) (406) (1,098) (783)
Other expenses (income), net 95 52 256 133
---------- ---------- ---------- ----------
Income before income taxes 5,834 4,880 9,390 9,022
Income tax expense 2,392 2,025 3,850 3,744
---------- ---------- ---------- ----------
Net income $ 3,442 $ 2,855 $ 5,540 $ 5,278
========== ========== ========== ==========
Net income per common share:
Basic $ 0.19 $ 0.16 $ .31 $ .30
========== ========== ========== ==========
Diluted $ 0.19 $ 0.16 $ .31 $ .30
========== ========== ========== ==========
Weighted average common shares outstanding
Basic 17,782,063 17,588,696 17,738,988 17,563,503
========== ========== ========== ==========
Diluted 18,028,164 17,840,021 18,022,619 17,769,280
========== ========== ========== ==========
</TABLE>
See accompanying notes
3
<PAGE>
URBAN OUTFITTERS, INC.
Consolidated Statements of Changes in Shareholders' Equity
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Comprehensive Additional Cumulative
Income Common Paid-In Retained Translation
Quarter Year-To-Date Stock Capital Earnings Adjustment Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at February 1, 1998 $ 2 $21,482 $69,174 -0- $90,658
Net income $3,442 $5,540 5,540 5,540
Foreign currency translation
adjustments, net (311) (311) (311) (311)
------ ------
Comprehensive income $3,131 $5,229
====== ======
Exercise of stock options 1,289 1,289
----- ------- ------- ----- -------
Balance at July 31, 1998 $ 2 $22,771 $74,714 $(311) $97,176
===== ======= ======= ===== =======
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at February 1, 1997 $ 2 $20,396 $55,294 -0- $75,692
Net income $2,855 $5,278 5,278 5,278
Foreign currency translation
adjustments, net -0- -0- -0- -0-
------ ------
Comprehensive income $2,855 $5,278
====== ======
Exercise of stock options 24 24
----- ------- ------- ----- -------
Balance at July 31, 1997 $ 2 $20,420 $60,572 $ -0- $80,994
===== ======= ======= ===== =======
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
4
<PAGE>
URBAN OUTFITTERS, INC.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended July 31
------------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,540 $ 5,278
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,668 2,237
Provision for losses on accounts receivable 176 106
Changes in assets and liabilities:
Increase in receivables (360) (2,061)
Increase in inventory (9,945) (3,335)
(Increase) decrease in prepaid expenses and other assets (2,847) 655
Increase in payables, accrued expenses and other liabilities 11,403 4,092
-------- --------
Net cash provided by operating activities 6,635 6,972
-------- --------
Cash flows from investing activities:
Capital expenditures (10,585) (1,703)
Purchase of investments held-to-maturity (5,735) (3,648)
Purchase of investments available-for-sale (1,095) (3,800)
Maturities of investments held-to-maturity 4,874 5,230
Sale of investments available-for-sale 1,200 1,200
-------- --------
Net cash used in investing activities (11,341) (2,721)
-------- --------
Cash flows from financing activities:
Exercise of stock options 1,289 24
-------- --------
Net cash provided by financing activities 1,289 24
-------- --------
Effect of foreign currency translation, net (311) -0-
-------- --------
Increase (decrease) in cash and cash equivalents (3,728) 4,275
Cash and cash equivalents at beginning of period 26,712 14,581
-------- --------
Cash and cash equivalents at end of period $ 22,984 $ 18,856
======== ========
</TABLE>
See accompanying notes
5
<PAGE>
URBAN OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended January 31, 1998, filed with the Securities and
Exchange Commission on April 21, 1998.
Certain prior period amounts have been reclassified to conform to the current
year's presentation.
2. Marketable Securities
Marketable securities are classified as follows:
<TABLE>
<CAPTION>
July 31, 1998 January 31, 1998 July 31, 1997
------------- ---------------- -------------
<S> <C> <C> <C>
Current portion
Held-to-maturity.......................... $ 9,562 $ 8,590 $ 7,607
Available-for-sale........................ 2,170 2,275 2,900
------- ------- -------
11,732 10,865 10,507
------- ------- -------
Noncurrent portion
Held-to-maturity.......................... 11,882 11,993 11,813
------- ------- -------
Total marketable securities ................. $23,614 $22,858 $22,320
======= ======= =======
</TABLE>
3. Foreign Currency Translation
Financial statements of foreign subsidiaries are translated into U.S. dollars at
current rates, except that revenues, costs and expenses are translated at the
weighted average of exchange rates in effect during the reporting period.
Translation adjustments are not included in determining net income but are
accumulated as a separate component of shareholders' equity. In accordance with
SFAS 130, "Reporting Comprehensive Income," components of comprehensive income,
such as foreign
6
<PAGE>
currency transactions and unrealized gains on securities, are required to be
disclosed within the basic financial statements. The Company's adoption of SFAS
130, required for fiscal periods beginning after December 15, 1997, resulted in
comprehensive income which was $311 thousand less than net income reported for
the three- and six-month periods ended July 31, 1998 due to the effect of
currency translation on the financial statements.
4. Effect of New Accounting Pronouncements
The FASB issued SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information," effective for periods beginning after December 15, 1997.
The new standard requires disclosure of revenues, results of operations and
assets of each segment of a public enterprise which qualifies based on
quantifiable and decision-making criteria. The Company is in the process of
reviewing the effect, if any, that SFAS 131 will have on the disclosures
contained in the Company's consolidated financial statements.
5. Subsequent Events
On August 12, 1998, the Company, in accordance with its agreements with HMB
Publishing, Inc., purchased $1,750,000 principal amount of 8% convertible
debentures. As of July 31, 1998, the Company had purchased $1,407,000 of
convertible preferred stock. The agreements call for additional investments if
HMB meets certain performance milestones. HMB publishes moXiegirl(TM), a
combination magazine and catalog catering to teenage girls.
In accordance with its previously announced program, subsequent to July 31,
1998, the Company has repurchased approximately 80,000 shares of its common
stock in a series of individual open market transactions. These shares will be
retained to fund shares issuable under the Company's stock option plans.
7
<PAGE>
PART I
FINANCIAL INFORMATION (continued)
ITEM 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
This Securities and Exchange Commission filing is being made pursuant to the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Certain matters contained in this filing may constitute forward-looking
statements. Any one, or all, of the following factors could cause actual
financial results to differ materially from those financial results mentioned in
the forward-looking statements: industry competition factors, unavailability of
suitable retail space for expansion, timing of store openings, difficulty in
predicting and responding to fashion trend shifts, seasonal fluctuations in
gross sales, the departure of one or more key senior managers and other risks
identified in filings with the Securities and Exchange Commission.
During the second quarter of FY 1999, new Urban Outfitters stores were opened in
San Diego, CA and Columbus, OH, in addition to the Company's Urban Outfitters
store in London, its first in the United Kingdom. An Anthropologie store opened
in Seattle, WA. These openings bring the number of new stores opened in FY 1999
to six.
RESULTS OF OPERATIONS
The Company's operating years end on January 31, and include 12 periods ending
on the last day of the calendar month. For example, fiscal year 1999 ("FY 1999")
will end on January 31, 1999. This discussion of results of operations covers
the second quarter and the first six months of FY 1999 and FY 1998.
8
<PAGE>
The following table sets forth, for the periods indicated, the percentage of the
Company's net sales represented by certain income statement data. The following
discussion should be read in conjunction with the table that follows:
<TABLE>
<CAPTION>
SECOND QUARTER ENDED SIX MONTHS ENDED
JULY 31 JULY 31
--------------------- --------------------
1998 1997 1998 1997
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 48.1% 50.7% 48.0% 50.4%
----- ----- ----- -----
Gross profit 51.9% 49.3% 52.0% 49.6%
Selling, general and
administrative expenses 40.7% 38.3% 42.2% 38.9%
----- ----- ----- -----
Income from operations 11.2% 11.0% 9.8% 10.7%
Net interest & other income 0.9% 0.8% 0.9% 0.8%
----- ----- ----- -----
Income before income taxes 12.1% 11.8% 10.7% 11.5%
Income tax expense 5.0% 4.9% 4.4% 4.8%
----- ----- ----- -----
Net income 7.1% 6.9% 6.3% 6.7%
===== ===== ===== =====
</TABLE>
SECOND QUARTER ENDED JULY 31, 1998 COMPARED
TO THE SECOND QUARTER ENDED JULY 31, 1997
Net sales increased during the second quarter ended July 31, 1998 to $48.1
million, up 16.3 percent from $41.3 million during the same period of the prior
year. The $6.8 million increase over the prior year's second quarter was the
result of new and noncomparable stores' sales of $5.7 million, an 11 percent
comparable store sales increase which contributed $3.7 million and $0.1 million
from the new Anthropologie catalog. These additions more than offset the $2.7
million decrease in Wholesale company sales. Management believes that the
primary cause of this decrease in Wholesale company sales is the continuation of
the trend of larger customers opting to produce their own private label
merchandise rather than purchase branded products from the Wholesale company.
Gross profit as a percentage of sales increased by 2.6 percent during the second
quarter ended July 31, 1998 compared to the prior year quarter. The increase in
percentage resulted from the increase in retail sales as a proportion of total
sales (since the retail divisions have a higher gross profit margin percentage
than the Wholesale company), as well as higher initial retail markups and lower
retail markdowns.
Selling, general and administrative expenses during the second quarter ended
July 31, 1998 were $19.6 million, up $3.7 million or 23.7% from the prior year.
The dollar increases were principally from the following areas:
o operating expenses of new stores opened in Urban Retail and Anthropologie
9
<PAGE>
o startup expenses aggregating approximately $0.9 million for the European
operation and for the Anthropologie catalog
The increase in selling, general and administrative expenses as a percent of
sales is a result of the following factors:
o the aforementioned $0.9 million in startup expenses of the two new
operations with modest sales
o the Wholesale company, while spending fewer dollars, had a much more
significant drop in revenues (38%), increasing the percent to sales
o additions to the corporate overhead structure to support the increased rate
of store expansion
o conversely, the retail companies, due to higher sales in both existing and
new stores, leveraged expenses and offset, in part, the above increases in
the percent to sales
Accordingly, income from operations during the quarter ended July 31, 1998 was
$5.4 million, up $0.9 million (18.9%) from the prior year.
The effective income tax rate for the quarter was 41.0%, down from 41.5% last
year. The reduction is a result of a lower average state income tax rate.
SIX MONTHS ENDED JULY 31, 1998
COMPARED TO THE SIX MONTHS ENDED JULY 31, 1997
Net sales increased during the six months ended July 31, 1998 to $87.5 million,
up 11.4 percent from the same period last year. The $8.9 million increase over
the prior year's first six months was the result of sales from new and
noncomparable stores of $8.1 million, a 10 percent comparable store sale
increase that yielded $6.3 million and sales of $0.5 million from the test of
the new Anthropologie catalog, which more than offset the $5.6 million decrease
in Wholesale company sales.
Gross profit margins stated as a percentage of sales during the six months ended
July 31, 1998. The dollar increases came from the volume growth previously
described. Gross profit increased to 52.0 percent this year versus 49.6 percent
last year. The increase in percentage resulted from the increase in retail
sales as a proportion of total sales (since the retail divisions have a higher
gross profit margin percentage than the Wholesale company), as well as higher
initial retail markups and lower retail markdowns.
Selling, general and administrative expenses during the six months ended July
31, 1998 were $37.0 million, up $6.4 million or 20.9 percent from the same
period in the prior year. These dollar increases were attributed principally to
newly opened stores and the $2.1 million of costs to fund the startup expenses
10
<PAGE>
of the European subsidiary and the test of the new Anthropologie catalog. Stated
as a percentage of sales, selling, general and administrative expenses increased
from 38.9 percent to 42.2 percent during the six months compared to the same
period in the preceding year. The increase in percent of sales is attributable
to the aforementioned startup costs and the Wholesale company's inability to
reduce expenses commensurate with its 37 percent decrease in sales. These
factors more than offset the leveraging of retail expenses due to the 10 percent
comparable store sales increase.
Income from operations during the six months ended July 31, 1998 was $8.5
million, up 2.1 percent from the same period in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $23.0 million at July 31, 1998, as compared to
$26.7 million at January 31, 1998 and $18.9 million at July 31, 1997. The
Company's net working capital was $49.3 million at July 31, 1998, as compared to
$52.1 million at January 31, 1998 and $45.8 million at July 31, 1997.
The decrease in cash and cash equivalents on July 31, 1998 from year end
reflects the funding of FY 1999's increased level of capital expenditures ($10.6
million versus $1.7 million for the six months ended July 31, 1997), primarily
for new store construction, and the increase in inventory for new stores and the
seasonal building of inventory in existing stores. These activities more than
offset the amounts generated from earnings and the increase in accounts payable
and accrued expenses.
The Company has a $16.5 million revolving line of credit available to facilitate
letter of credit transactions and cash advances. Interest on any outstanding
cash advance balance is payable monthly and is based on an "as offered" basis
not to exceed the London Interbank Offered Rate (LIBOR) plus 3/8 of 1%. No cash
borrowing has ever taken place on this line and, accordingly, no principal
amounts were outstanding at July 31, 1998, January 31, 1998 or July 31, 1997.
Outstanding letters of credit totaled $6.8 million, $4.7 million and $7.7
million at July 31, 1998, January 31, 1998 and July 31, 1997, respectively.
These letters of credit, which have terms from one month to one year,
collateralize the Company's obligation to third parties for the purchase of
inventory. The fair value of these letters of credit is estimated to be the same
as the contract values. There were no loan balances of any kind at July 31,
1998, January 31, 1998 or July 31, 1997.
The Company expects that capital expenditures during FY 1999 will be
approximately $18 million, depending upon the number of stores opened, enlarged
or improved during the year. Five stores are currently under construction. The
Company believes that existing cash and investments at July 31, 1998, as well as
cash from future operations, will be sufficient to meet the Company's cash needs
through January 31, 2000. The Company has increased the number of new store
openings in FY 1999 over historical trends, and management expects to maintain
this higher rate of expansion over the next several years. If the need for
additional capital after FY 2000 is forecasted and if deemed by management to be
in the best interests of the Company, then additional equity, long-term debt,
capital leases or other permanent financing may be considered.
11
<PAGE>
OTHER MATTERS
Outlook
Management has planned for a moderation in the Company's rate of comparable
store sales increases during the second half of the fiscal year from those
achieved during the first half; but the added sales of noncomparable and new
stores are planned to more than offset the planned decrease in the level of
Wholesale company sales.
Year 2000 Systems Readiness
The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue. The
Company has also reviewed the implemented changes or planned changes of its
major suppliers that management believes could be affected by the Year 2000
date. Based on the review, the Company's major systems that would be adversely
affected by the Year 2000 will be upgraded or replaced through the normal course
of business. Internal resources will be used in a timely manner to evaluate,
modify and test the Company's other systems that are not scheduled to be
upgraded or replaced through the normal course of business. Management believes
the combination of these efforts will prepare the Company's computer systems for
the Year 2000 on a timely basis. The Company's core merchandising and financial
system upgrade and the store register system upgrades have been completed, and
testing of these upgrades continues. However, if all such modifications and
conversions are not completed timely by the Company or its key suppliers, the
Year 2000 problem may have a material impact on the operations of the Company.
The incremental costs associated with major system upgrades and/or replacements,
as well as internal efforts to evaluate, modify and test the Company's other
systems are not expected to be of a material nature to the Company.
Effect of New Accounting Pronouncements
The FASB issued SFAS 130, "Reporting Comprehensive Income," which requires
disclosure of comprehensive income within the basic financial statements for
those entities with items that qualify as components of comprehensive income
such as foreign currency transactions and unrealized gains on securities. The
Company's adoption of SFAS 130, required for fiscal periods beginning after
December 15, 1997, resulted in comprehensive income which was $311 thousand less
than net income reported for the three- and six-month periods ended July 31,
1998 due to the effect of currency translation on the financial statements.
The FASB issued SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information," effective for periods beginning after December 15, 1997.
The new standard requires disclosure of revenues, results of operations and
assets of each segment of a public enterprise that qualifies based on
quantifiable and decision-making criteria. The Company is in the process of
12
<PAGE>
reviewing the effect, if any, that SFAS 131 will have on the disclosures
contained in the Company's consolidated financial statements.
Subsequent Events
On August 12, 1998, the Company, in accordance with its agreements with HMB
Publishing, Inc., purchased $1,750,000 principal amount of 8% convertible
debentures. As of July 31, 1998, the Company had purchased $1,407,000 of
convertible preferred stock. The agreement calls for additional investments if
HMB meets certain performance milestones. HMB publishes moXiegirl(TM), a
combination magazine and catalog catering to teenage girls.
In accordance with its previously announced program, subsequent to July 31,
1998, the Company has repurchased approximately 80,000 shares of its common
stock in a series of individual open market transactions. These shares will be
retained to fund shares issuable under the Company's stock option plans.
PART II
OTHER INFORMATION
ITEM 6 Exhibits and Reports on Form 8-K
- -----
(a) Exhibits: Income Per Share Calculation
(b) Reports on Form 8-K: None
13
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
URBAN OUTFITTERS, INC.
(Registrant)
By: /s/ Richard A. Hayne
------------------------
Richard A. Hayne
Chairman of the Board of
Directors
By: /s/ Stephen A. Feldman
-----------------------
Stephen A. Feldman
Treasurer
(Chief Financial Officer)
Dated: September 11, 1998
14
Urban Outfitters, Inc. Exhibit 11
INCOME PER SHARE CALCULATION:
JULY 31, 1998 & 1997
<TABLE>
<CAPTION>
INCOME PER SHARE CALCULATION:
Three Months Ended July 31
------------------------------------------------------
1998 1997
----------------------- -----------------------
<S> <C> <C> <C> <C>
Per Share $ Per Share
NET INCOME 3,442,000 $0.19 2,855,000 $0.16
========= ========== ========= ==========
WEIGHTED AVERAGE COMMON
SHARES & COMMON SHARE
EQUIVALENTS OUTSTANDING-
ASSUMING DILUTION 18,028,164 17,840,021
========== ==========
<CAPTION>
Six Months Ended July 31
------------------------------------------------------
1998 1997
----------------------- -----------------------
<S> <C> <C> <C> <C>
$ Per Share $ Per Share
NET INCOME 5,540,000 $0.13 5,278,000 $0.30
========= ========== ========= ==========
WEIGHTED AVERAGE COMMON
SHARES & COMMON SHARE
EQUIVALENTS OUTSTANDING-
ASSUMING DILUTION 18,022,619 17,769,280
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
COMPUTATION OF COMMON SHARES
& COMMON SHARE EQUIVALENTS
OUTSTANDING:
Three Months Ended July 31,
-----------------------------------------------------------------
1998 1997
------------------------------ -------------------------------
End of Period Weighted Ave. End of Period Weighted Ave.
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
COMMON SHARES OUTSTANDING-
BASIC 17,784,954 17,782,063 17,588,696 17,588,696
---------- ----------
COMMON SHARE EQUIVALENTS:
OPTIONS 1,390,000 1,325,445 1,320,772 1,320,772
ASSUMED REPURCHASED
AT AVERAGE PRICE (1,079,344) (1,069,447)
---------- ----------
WEIGHTED AVERAGE COMMON
EQUIVALENTS 246,101 251,325
---------- ----------
TOTAL WEIGHTED AVERAGE
COMMON SHARES & COMMON
SHARE EQUIVALENTS OUTSTANDING-
ASSUMING DILUTION 18,028,164 17,840,021
========== ==========
<CAPTION>
Six Months Ended July 31,
----------------------------------------------------------------
1998 1997
------------------------------ ------------------------------
End of Period Weighted Ave. End of Period Weighted Ave.
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
COMMON SHARES OUTSTANDING-
BASIC 17,784,954 17,738,988 17,588,696 17,563,503
---------- ----------
COMMON SHARE EQUIVALENTS:
OPTIONS 1,390,000 1,303,375 1,320,772 1,320,551
ASSUMED REPURCHASED
AT AVERAGE PRICE (1,019,744) (1,114,774)
---------- ----------
WEIGHTED AVERAGE COMMON
EQUIVALENTS 283,631 205,777
---------- ----------
TOTAL WEIGHTED AVERAGE
COMMON SHARES & COMMON
SHARE EQUIVALENTS OUTSTANDING-
ASSUMING DILUTION 18,022,619 17,769,280
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> JUL-31-1998
<CASH> 22,984
<SECURITIES> 11,732
<RECEIVABLES> 4,681
<ALLOWANCES> 0
<INVENTORY> 27,073
<CURRENT-ASSETS> 74,077
<PP&E> 34,810
<DEPRECIATION> 0
<TOTAL-ASSETS> 125,345
<CURRENT-LIABILITIES> 24,750
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> 97,174
<TOTAL-LIABILITY-AND-EQUITY> 125,345
<SALES> 87,452
<TOTAL-REVENUES> 87,452
<CGS> 41,937
<TOTAL-COSTS> 41,937
<OTHER-EXPENSES> 37,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,098)
<INCOME-PRETAX> 9,390
<INCOME-TAX> 3,850
<INCOME-CONTINUING> 5,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,540
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
