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Earnings Calls: 
Urban Outfitters First Quarter Earnings Call
Author: Rozalina Destanova
123jump.com
Last Update: 5:33 AM EDT May 19 2008


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Same-store sales rose 10%, with the biggest increase of 19% seen at its Free People business. Gross profit margins rose 4.44 percentage points due to fewer markdowns and improvements to initial merchandise costs. Website visits were up 31% to 15.3 million visits, a gain of 3.6 million visits over the same quarter last year. The company opened 12 new stores. Total company comparable inventory was down 3%, with a 2% decrease at Anthropologie and a 5% reduction at Urban Outfitters.

 
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Glen Senik: I do not want to go into too much detail on the CTM because a lot of it is competitive information that I would not want to share in this venue. The goal is to compress the product line so that we can get the right product in the right place at the right time. When you look at the inventory reductions both at Anthropologie and especially at Urban, what you are seeing is in part due to the improvements we have made with our sourcing. I spoke on the last conference call about a key item at Anthropologie that unexpectedly came in and sold 40% or 45% in the first week and I congratulated Barbara Roseus and her team for literally getting the brand back in inventory in two-and-a-half weeks. When you have that flexibility or reaction time, it has a profound impact on the open to buy. I would not say that we are early stages in CTM, I would say that we are 40%, 45% of the way through. We have made a lot of progress in the last 18 months. We started, we identified this several years back and we started working on it as a group about 18 months ago and I am pleased with where we are in our status. We are in the midst of a software initiative.

Jennifer Black (Jennifer Black & Associates): Lifestyle centers comps were flat. Is that an opportunity going forward?

Glen Senik: What I mentioned was they were flat at Urban Outfitters, at Anthropologie they were with the group and I am hesitant to mention those kinds of things because if you drill down into the details it is typically a management issue. I said that we have one store that I can think of that has been cannibalized in our entire company and that one store happens to fall in the lifestyle grouping at Urban Outfitters so that had an impact. I do not think there is anything meaningful to take away, we believe in the lifestyle center concept, we will continue to open stores in them and that is it.

Tanya Daconian (William Blair & Co.): What growth pace do you believe is reasonable to expect for the wholesale sales for the rest of the year?

John Kyees: Wholesale has been double-digit positive growth for the last 17 quarters so we would not see any reason why that should change. As far as quantifying how high the double-digits would be, I would not want to guess at that.
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