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Urban Outfitters Inc URBN
Q3 2013 Earnings Call Transcript

Transcript Call Date 11/19/2012

Operator: Good day, ladies and gentlemen, and welcome to the Urban Outfitters Inc. Third Quarter Fiscal 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. Please do not queue for the Q&A portion of this call until announced. Anyone doing so prematurely will be deleted from the queue. As a reminder this conference call is being recorded.

I would now like to introduce Oona McCullough, Director of Investor Relations. Ms. McCullough you may begin.

Oona McCullough - Director, IR: Good afternoon, and welcome to the URBN Third Quarter Fiscal 2013 Conference Call. Earlier this afternoon, the Company issued a press release outlining the financial and operating results for the three months period ending October 31, 2012.

The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the Company's filings with the Securities and Exchange Commission.

We will begin today’s call with Frank Conforti, our Chief Financial Officer, who will provide financial highlights for the third quarter; Meg Hayne, President, Free People brand, will provide a brief update on the Free People brand; Richard Hayne, our Chief Executive Officer, will then comment on our broader strategic initiatives. Following that, we will be pleased to address your questions.

As usual, the text of today's conference call, along with detailed management commentary will be posted to our corporate website at www.urbanoutfittersinc.com.

I’ll now turn the call over to Frank.

Frank J. Conforti - CFO: Thank you, Oona and good afternoon, everyone. We are pleased to announce another quarter of record results for Urban Outfitters. We are proud of these results and especially happy with the progress we've made year-to-date. We entered the year with a clear plan and now we are seeing the benefits of executing that plan. Each quarter we had delivered an acceleration of the sales growth rate versus the prior comparable quarter. In addition, we delivered significant improvement in gross profit margin and operating profit margin rate versus the prior comparable quarter.

Before I discuss the specific financial results in detail let me remind you that URBN quarterly financial periods are based on calendar months, not a 4-5-4 Retail Calendar. This means that Hurricane Sandy, which hit the North Easter United States on October 28th, impacted the last four days of the third quarter.

In total 106 of our stores were affected by Sandy and while we suffered little permanent damage to our stores, there were many store closures. These range from the few hours to more than a weak.

Additionally, we believe our direct-to-customer channel was negatively impacted by customer power outages in the North East including a portion of New York City. We believe the effects of Sandy reduced our retail segment comparable net sales growth rate by approximately 1 percentage point in the third quarter and we're having measurable, but lesser impact on our fourth quarter results.

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