Urban Outfitters Inc. (NASDAQ: URBN), one of Wall Street's favorite retailers, says
in an SEC filing today that an unspecified federal tax break for work on its "new offices" helped pushed down its first-quarter effective tax rate to an enviously low 22.3 percent. (The verbatim jargon goes like this:
"This decrease was primarily attributable to receipt of certification for work performed on the development of our new offices that qualifies for certain one-time federal tax incentives and the benefit of certain reorganizational efforts." Ouch). The company doesn't specify which offices qualified for the breaks or what they were for. A company spokesman did not return PhillyInc's calls. The company has done extensive and
praise-winning reconstruction of several buildings in the Navy Yard. It does mention lower in the 10-Q that "construction of our home offices at the Navy Yard" ended this year. The tax breaks, alas, are over. "We anticipate an annual effective tax rate of approximately 36.2% for the remainder of the fiscal year," it says.
Shares of Urban Outfitters have gained more than 41 percent over the last year, outperforming rivals including The Gap Inc. (NYSE: GPS) and Abercrombie & Finch Inc. (NYSE: ANF), and the company expects the good times to continue. Last month, it launched a new store brand "inspired by the greenhouse."
As of April 30, the company operated 110 Urban Outfitters stores, most of which were in the United States. During the last fiscal quarter, it opened three stores in the U.S. and one in Canada. "We plan to open additional stores over the next several years, some of which may be outside the United States," the company said. All of the company's stores opened more than three years are expected to generate positive annual cash flow before the allocation of corporate overhead.
- Jonathan Berr
