Urban Outfitters, Inc. · NASDAQ:URBN
Urban Outfitters — William Blair Conference (2009)
31 slides from Urban Outfitters's conference presentation, 2009
Slide 1: Urban Outfitters Inc.
Slide 2: Safe Harbor Statement
Safe Harbor Statement The following discussions may include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please note that actual financial results of the Company for the periods being discussed may differ materially from the financial results
Slide 3: Overview, The Brands, Historical Performance, Company Goals, Initiatives
OVERVIEW THE BRANDS HISTORICAL PERFORMANCE COMPANY GOALS CURR ENT AND FUTU RE INITIATIVE S
Slide 4: The Brands
THE BRANDS URBAN OUTFITTERS ANTHROPOLOGIE FREE PEOPLE TERRAIN LEIFSDOTTIR
Slide 5: Slide 5
Slide 6: Three Brands, All Channels
TH RE E bRAN Ds ALL CHAN NE LS 1... BRICK & MORTAR 2... DIRECT TO CONSUMER 3... WHOLESALE
Slide 7: Store Differentiation
STORE DIFFERENTIATION 1. Boutique-like HOME AND APARTMENT 3. Environment PRODUCTS WITH APPAREL • Each store is designed independently. • EACH STORE has a visual team to keep the store different. BROAD & SHALLOW 4. RATHER THAN 2. THIRD PARTY BRANDS NARROW & DEEP WITH OUR OWN BRANDS
Slide 8: Store Count: Scarcity = Value
STORE COUNT scarcity = value Full YE JANUARY 31, 02 09 PROJECTED 10 Penetration* ---------------------------------------------------------------------------------------- urban outfitters 49 125 141 200 Urban europe 3 17 21 50 ANTHROPOLOGIE 31 121 137 250 Anthropologie europe 0 0 1 50 FREE PEOPLE 0 3
Slide 9: FY 2009 Full Year Performance
FY 2009 Full Year Perfor mance
Slide 10: Total Company Sales
TOTAL COMPANY SALE S $1834.6M CAGR +28% $1507.7M $1224.7M $1092.2M $827.8M $548.4M $422.7M FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Slide 11: Direct-to-Consumer Sales
DIRECT-TO -CON SUME R SALE S $272.5M CAGR +43% $205.7 M $153.7M $130.6M $93.9M $51.1 M $31.7 M FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 fy 2009
Slide 12: Wholesale Sales
WHOLESALE $110.1 M SALE S $94.5 M CAGR +35% $74.2M $53.3M $27.4M $18.3M $17.6 M FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 fy 2009
Slide 13: Operating Margins
OPERATING MARG IN S % OF NET SALES 19.0% 17.9% 16.4% 14.7% 14.9% 13.4% 10.7% FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Slide 14: Net Earnings
NET EARN ING S $199.9M 39% CAG R $160.2M $130.8M $116.2M $90.5M $48.4M $27.4M FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Slide 15: Q1 FY 2010 Performance
Q1 FY 2010 Perfor mance
Slide 16: Q1 FY 2010 Performance
Q1 FY 2010 PER FOR MANCE TOTAL SALES... -2% COMP SALES... -9.6% EARN INGS... -27%
Slide 17: Q1 FY 2010 New Stores Opened
Q1 FY 2010 NEW STORES OPENED URBAN OUTFITTERS... ....... 1 ANTHROPOLOGIE...... ....... 2 FREE PEOPLE........ ....... 2 TERRAIN................... 0 TOTAL............. 5 NEW STORES
Slide 18: Q1 FY 2010 Store Count
Q1 FY 2010 STORE count JULY 31 FULL 2009 PENETRATION* URBAN OUTFITTERS-NA ....... 126 ... 200 -EU ....... 17 .... 50 ANTHROPOLOGIE-NA... ....... 123 ... 300 -EU.......... 0.. ... 50 FREE PEOPLE............... 32 .... 200 TERRAIN................... 1 ..... 50 TOTAL............. 299... 800 ESTIMATE IN
Slide 19: Total Company Sales Q1 FY 2010
TOTAL COM PANY SALES Q1 FY 2010 FY 2009 FY 2010 $159.9 Urban Outfitters $153.0 Urban Outfitters $145.5 Anthropologie $138.2 Anthropologie $58.2 Direct $60.8 Direct $30.1 Free People $29.7 Free People $.6 TERRAIN $1.3 TERRAIN $— LEIfsDottir ------ $1.8 LEIfsDottir ------ $394.3M $384.8M
Slide 20: Q1 FY 2010 Operating Margins
Q1 FY 2010 OPE RATI NG MARGINS % OF NET SALES 16.0% 12.0% FY 2009 FY 2010
Slide 21: Q1 FY 2010 Selling, General + Administrative
Q1 FY 2010 SELLING, GEN ERAL + ADM INISTRATIVE EXPENS E INCREASE/ DECREASE FY 2009 FY 2010 TO LY EXPENSE $ 95.7 97.2 1.5% % TO SALES 24.3% 25.3%
Slide 22: Q1 FY 2010 Net Earnings
Q1 FY 2010 NET EAR NING S $42.6M $30.8M FY 2009 FY 2010
Slide 23: Goals
GOALS
Slide 24: Goals
GOALS • GROW SALES, 20+%/YR • DELIVER 20+% OPERATING MARGINS • BUILD SHARED SERVICE CAPACITY TO SUPPORT BRANDS • REDUCE EFFECTIVE TAX RATE
Slide 25: Initiative: Grow Sales Through Existing Businesses
INITIATIVE: GROW SALES Through EXISTING BUSINESSES OPEN NEW grow direct STORES to con su m er • 35—38 in FY 10 busine ss DEliver grow positive whole sale comps busine ss
Slide 26: Initiative: Grow Sales Through New Concepts
INITIATIVE: GROW SALES through NEW CONCEPTS SPACE Terrain 15Twenty • Garden Center • Lifestyle center in Los Angeles • First store opened in PA April 2008 • Targeted at Urban customer • URBN is the Landlord Other Leifsdottir • Probably will have 2-3 other retail concepts • Wholesale brand • Will be
Slide 27: Initiative: Operating Margins
INITIATIVE: Operating Margins Leverage Occupancy • Continue to control Grow Initial store fit-out costs Margins • Concept to market • Invest in design and merchaNT Talent for own brands Leverage SG&A for FY10 • Reaction started last summer • Budget lower sales comps Reduce • Reduce leverage point fr
Slide 28: Build Shared Service Capacity
FUTURE INITIATIVES: BUILD SHARED SERVICE CAPACITY CONCEPT REAL ESTATE TO MARKET • Extend deal pipeline • Optimize selection of retail • Calendar compression format and retail sites • Logistics changes for speed and cost • Leverage in-house architectural • Evaluation of tax impact design and developm
Slide 29: Advantageous Company Characteristics During Recessions
FUTURE INITIATIVES: Advantageous Company Characteristics During Recessions Good Operating Model Differentiated • Can realize earnings and generate CoNcepts cash in spite of sales challenges • Each brand is distinctive in its space Strong Balance sheet Aggressive • Year end cash of $521 million Manag
Slide 30: Advantageous Company Characteristics During Recessions
FUTURE INITIATIVES: ADVANTAGEOUS COMPANY CHARACTERISTICS DURING RECESSIONS OPPERTUNITY FOR NIMBLE AND STORE GROWTH RESPONSIVE • ONLY 299 OF THE POTENTIAL 800 ARE OPEN • REAL ESTATE IS AVAILABLE DUE TO SMALL COMPANY • RECESSION PLANNING BEGAN LAST NUMBER OF STORES AND DESIRABILITY SUMMER AS A TENANT
Slide 31: Slide 31