URBN Reports Record Q2 Sales and Income
PHILADELPHIA, Aug. 27, 2025 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands including the Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly brands, today announced record net income of $143.9 million and earnings per diluted share of $1.58 for the three months ended July 31, 2025. For the six months ended July 31, 2025, net income was a record $252.2 million and earnings per diluted share were $2.73.
Total Company net sales for the three months ended July 31, 2025, increased 11.3% to a record $1.50 billion. Total Retail segment net sales increased 7.8%, with comparable Retail segment net sales increasing 5.6%. The increase in Retail segment comparable net sales was driven by mid single-digit positive growth in both retail store sales and digital channel sales. Comparable Retail segment net sales increased 6.7% at Free People, 5.7% at Anthropologie and 4.2% at Urban Outfitters. Subscription segment net sales increased by 53.2% primarily driven by a 48.1% increase in average active subscribers in the current quarter versus the prior year quarter. Wholesale segment net sales increased 18.1% driven by a 19.5% increase in Free People wholesale sales primarily due to an increase in sales to specialty customers.
For the six months ended July 31, 2025, total Company net sales increased 11.0% to a record $2.83 billion. Total Retail segment net sales increased 7.1%, with comparable Retail segment net sales increasing 5.2%. The increase in Retail segment comparable net sales was driven by mid single-digit positive growth in both retail store sales and digital channel sales. Comparable Retail segment net sales increased 6.3% at Anthropologie, 5.0% at Free People and 3.2% at Urban Outfitters. Subscription segment net sales increased by 56.1% primarily driven by a 50.3% increase in average active subscribers in the current period versus the prior year period. Wholesale segment net sales increased 21.0% driven by a 22.4% increase in Free People wholesale sales primarily due to an increase in sales to specialty customers.
"We are proud to announce record revenues, profits, and earnings per share for the quarter," said Richard A. Hayne, Chief Executive Officer. "Our success was broad-based, with all five brands achieving positive comparable sales across all geographies. We saw exceptional performance across all of our segments, Retail, Subscription, and Wholesale, and believe these results reflect the strength of our brands, the effectiveness of our strategy, and the talent of our teams. We are confident in our continued momentum," finished Mr. Hayne.
Net sales by brand and segment for the three and six-month periods were as follows:
Three Months Ended
Six Months Ended
July 31,
July 31,
2025
2024
2025
2024
Net sales by brand
Anthropologie
$
606,954
$
569,100
$
1,176,885
$
1,095,485
Free People
415,014
365,129
768,126
683,820
Urban Outfitters
333,171
316,715
606,676
586,973
Nuuly
138,932
90,696
263,286
168,638
Menus & Venues
10,684
10,319
19,283
17,775
Total Company
$
1,504,755
$
1,351,959
$
2,834,256
$
2,552,691
Net sales by segment
Retail Segment
$
1,289,269
$
1,196,456
$
2,419,779
$
2,259,141
Subscription Segment
138,932
90,696
263,286
168,638
Wholesale Segment
76,554
64,807
151,191
124,912
Total Company
$
1,504,755
$
1,351,959
$
2,834,256
$
2,552,691
For the three months ended July 31, 2025, the gross profit rate increased by 113 basis points compared to the three months ended July 31, 2024, and gross profit dollars increased 14.8% to $566.2 million from $493.3 million. The increase in gross profit rate was primarily due to improved Retail segment markdowns primarily driven by lower markdowns at the Urban Outfitters brand and leverage in occupancy costs due to the increase in comparable Retail segment and Subscription segment net sales. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.
For the six months ended July 31, 2025, the gross profit rate increased by 191 basis points compared to the six months ended July 31, 2024, and gross profit dollars increased 17.0% to $1.06 billion from $901.7 million. The gross profit rate benefited from a non-recurring gain of $4.8 million, or 17 basis points, recorded in the first quarter of fiscal 2026 and store impairment and lease abandonment charges of $4.6 million, or 18 basis points, recorded in the first quarter of fiscal 2025 not repeated in the current year period. The remaining 156 basis point increase in gross profit rate was primarily due to improved Retail segment markdowns primarily driven by lower markdowns at the Urban Outfitters brand and leverage in occupancy costs due to the increase in comparable Retail segment and Subscription segment net sales. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.
As of July 31, 2025, total inventory increased by $91.5 million, or 15.1%, compared to total inventory as of July 31, 2024. Total Retail segment inventory increased by 15.0% and comparable Retail segment inventory increased by 11.3%. Wholesale segment inventory increased by 16.4%. The increase in inventory for both segments was due to increased sales and planned early receipts of merchandise.
For the three months ended July 31, 2025, selling, general and administrative expenses increased by $43.6 million, or 12.5%, compared to the three months ended July 31, 2024. Selling, general and administrative expenses deleveraged 28 basis points as a percentage of net sales compared to the three months ended July 31, 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to increased marketing expenses to support customer growth and increased sales in the Retail and Subscription segments. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer growth and increased sales in the Retail and Subscription segments, as well as increased store payroll expenses to support the Retail segment stores net sales growth.
For the six months ended July 31, 2025, selling, general and administrative expenses increased by $70.7 million, or 10.4%, compared to the six months ended July 31, 2024. Selling, general and administrative expenses leveraged 16 basis points as a percentage of net sales compared to the six months ended July 31, 2024. The leverage in selling, general and administrative expenses as a percentage of net sales was primarily related to lower litigation expenses in the current year period as compared to the prior year period. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer growth and increased sales in the Retail and Subscription segments, as well as increased store payroll expenses to support the Retail segment stores net sales growth.
The Company's effective tax rate for the three months ended July 31, 2025, was 21.5%, compared to 23.0% in the three months ended July 31, 2024. The Company's effective tax rate for the six months ended July 31, 2025, was 21.5%, compared to 23.2% in the six months ended July 31, 2024. The decrease in the effective tax rate for the three and six months ended July 31, 2025, was primarily attributable to the ratio of foreign taxable earnings to global taxable earnings and the release of certain state and local valuation allowances.
Net income for the three months ended July 31, 2025, was a record $143.9 million and earnings per diluted share were $1.58. Net income for the six months ended July 31, 2025, was a record $252.2 million and earnings per diluted share were $2.73.
On June 4, 2019, the Company's Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. During the six months ended July 31, 2025, the Company repurchased and subsequently retired 3.3 million shares for approximately $152 million. During the twelve months ended January 31, 2025, the Company repurchased and subsequently retired 1.2 million shares for approximately $52 million. As of July 31, 2025, 14.7 million common shares were remaining under the program.
During the six months ended July 31, 2025, the Company opened a total of 27 new retail locations including: 19 Free People stores (including 10 FP Movement stores), 4 Anthropologie stores and 4 Urban Outfitters stores; and closed 4 retail locations including: 2 Free People stores and 2 Urban Outfitters stores.
Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 257 Urban Outfitters stores in the United States, Canada and Europe and websites; 247 Free People stores (including 73 FP Movement stores) in the United States, Canada and Europe, catalogs and websites; 243 Anthropologie stores in the United States, Canada and Europe, catalogs and websites; 9 Menus & Venues restaurants; 7 Urban Outfitters franchisee-owned stores and 2 Anthropologie franchisee-owned stores as of July 31, 2025. Free People, FP Movement and Urban Outfitters wholesale sell their products through department and specialty stores worldwide, digital businesses and the Company's Retail segment. Nuuly is primarily a women's apparel subscription rental service which offers a wide selection of rental product from the Company's own brands, third-party brands and one-of-a-kind vintage pieces.
A conference call will be held today to discuss second quarter results and will be webcast at 5:00 pm. ET at: https://edge.media-server.com/mmc/p/itmnjypu/.
As used in this document, unless otherwise defined, "Anthropologie" refers to the Company's Anthropologie and Terrain brands and "Free People" refers to the Company's Free People and FP Movement brands.
This news release is being made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Certain matters contained in this release may contain forward-looking statements. When used in this release, the words "project," "believe," "plan," "will," "anticipate," "expect" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom's withdrawal from membership in the European Union (commonly referred to as "Brexit"), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war, including geopolitical instability, impacts of the conflict in the Middle East and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises (such as the coronavirus (COVID-19)), labor shortages and increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, our effective utilization of technological advancements, including in artificial intelligence, the departure of one or more key senior executives, import risks (including any shortage ...
