Urban Outfitters Inc. (NASDAQ:URBN) Q4 2016 Earnings Conference Call - Final Transcript

Mar 07, 2016 • 05:00 pm ET

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Urban Outfitters Inc. (NASDAQ:URBN) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Urban Outfitters Incorporated Fourth Quarter Fiscal 2016 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. [Operator Instructions] 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.

Executive
Oona McCullough

Good afternoon and welcome to the URBN fourth quarter fiscal 2016 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three months and 12-month period ending January 31, 2016.

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 fourth quarter. 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 for today's conference call will be posted to our corporate website at www.urbanoutfittersinc.com.

I'll now turn the call over to Frank.

Executive
Francis John Conforti

Thank you, Oona, and good afternoon, everyone. I will start my prepared commentary discussing our recently completed fiscal year 2016, fourth results versus the prior comparable quarter. Then I will share some of our thoughts concerning the fiscal year 2017 first quarter and full-year. Total company or URBN sales for the fourth quarter increased to $1 billion. This sales increase included a minus 2% retail segment comp, a $1.5 million increase in non-comp sales, including the opening of six net new stores and a 29% jump in wholesale segment sales. Additionally, please note that our sales growth during the quarter was negatively impacted by approximately 160 basis points of foreign currency translation.

Within our retail segment comp, the direct-to-consumer channel continued to outperform stores, posting a double-digit sales increase, driven by increases in sessions, and conversion rate, which more than offset a slight decrease in average order value. Negative comp store sales resulted from decreased transactions and average unit selling price, while units per transaction were flat. The negative transactions could have been affected by traffic, which was down at each of our brands' comp stores during the quarter.

By brand, our Retail segment comp rate increased by 2% at Free People, while decreasing by 3% at Urban Outfitters and 2% at the Anthropologie Group. Our URBN Retail segment comp was negative in all months during the quarter with each month coming in fairly consistent to the minus 2% for the quarter. Free People wholesale segment sales delivered another strong quarter, as sales rose 29% to $75 million. These results came from double-digit growth in specialty and department store doors, domestically and internationally. Please keep