Urban Outfitters veteran returns
It was back to the future at Urban Outfitters Inc. on Monday, as founder Richard A. Hayne, chief executive since his predecessor CEO's surprise departure in January, lauded a management team that included another recently returned veteran, Ted Marlow, and pledged to return the retailer to a brighter future.
"I have complete confidence in the executive team that's assembled around the table here in Philadelphia," Hayne, whose company has headquarters at the Philadelphia Navy Yard, told investment analysts during his first earnings call as CEO since protege and 18-year veteran Glen T. Senk resigned, rattling markets two months ago.
The company reported thinning profits on $2.5 billion in global sales for the year that ended Jan. 31, capping a yearlong odyssey of fashion mistakes at Anthropologie and its namesake Urban Outfitters division that led to costly discounting at both chains.
Those misses cut into profitability and led to various management shake-ups before Senk resigned in January.
Hayne, who founded the company 42 years ago as a single Urban Outfitters store in University City and remained board chairman after Senk's rise to CEO in 2007, told analysts the problems of the last year could be solved.
"I feel confident that there is no long-term damage done to any of the brands," Hayne said. The company also owns Free People, Terrain, and a bridal division called BHLDN (pronounced "Beholden").
Hayne was greeted warmly as he told analysts of the company's plans to expand into Asia in "the next couple years."
He also discussed efforts to woo its mostly female shoppers again with fresh fashions over the next year - with the hope of also commanding higher prices at checkout. The last year brought backlogs of unwanted wares that were ultimately sold at costly markdowns at two critical divisions for the behemoth retailer.
"It's great to hear everybody back together again," one analyst said after Hayne introduced a five-member executive team that included recently rehired Urban Outfitters brand chief Marlow, as well as the chairman's wife, Meg Hayne (longtime head of Free People), and David W. McCreight, who was named CEO of the Anthropologie division in November as the company struggled to revitalize that brand in Senk's final months.
"My congratulations to getting the band back together again," one analyst joked.
"Welcome back to Dick and Ted," another analyst gushed.
"Nice to beback," replied Hayne, who threw Marlow a separate nod after the newly returned head of global business for the Urban Outfitters division completed his own remarks to analysts.
"It's great to have you back in the business," Hayne told Marlow, a veteran who had left Urban Outfitters for a year and a half before returning last month.
Marlow was rehired a few weeks after Senk abruptly left the company to become CEO of New York jeweler David Yurman Inc.
Hayne and his team said that despite a troubling year in which profits suffered, the company was on track for expansion overseas, more promising fashions, and considerable investment in expanding its catalog and online business.
Although the $2.5 billion in annual sales was an all-time high, the growth was fueled largely by the opening of dozens of new stores, rather than increased sales in existing ones.
As a result, the 9 percent increase in net sales was tempered by a drop in net income - $185.3 million for the year that ended Jan. 31, compared to $273 million in annual earnings on $2.3 billion in sales the previous year, the company reported.
Results for the fourth quarter were similar, with net income falling to $39.3 million, or 27 cents per share, compared to $75 million, or 45 cents per share a year earlier, according to the corporation, which employs roughly 1,500 people along the Delaware River. The corporation expects that number to grow as it expands its operations there.
Contact Maria Panaritis at 215-854-2431, mpanaritis@phillynews.com, or follow @panaritism on Twitter.