URBN Reports Record Q2 Sales and Profits

Rhea-AI Summary

URBN (NASDAQ: URBN) reported Q2 2026 net income of $240.7 million and EPS of $2.78 on record quarterly net sales of $1.66 billion, up 10.4% year over year. Adjusted net income was $149.3 million and adjusted EPS $1.72, excluding one-time IEEPA tariff refunds, related interest income and a tax valuation allowance release.

Total Retail segment sales rose 8.0% with comparable sales up 6.2%, led by FP Group (+10.0%), Urban Outfitters (+8.4%) and Anthropologie (+3.0%). Subscription segment sales (Nuuly) grew 28.6%, while Wholesale increased 18.6%. Gross profit dollars increased 27.4% to $721.6 million, with the gross profit rate up 580 bps; adjusted gross profit dollars rose 10.6% to $625.9 million.

For the first six months, net sales reached a record $3.14 billion, up 10.9%, with adjusted EPS of $3.02. The company repurchased 4.6 million shares for approximately $300 million during the period, leaving 10.0 million shares available under its authorization.

Positive

• Record Q2 net sales $1.66 billion, up 10.4% year over year
• Q2 net income $240.7 million; EPS $2.78
• Adjusted Q2 net income $149.3 million; adjusted EPS $1.72
• Retail comparable sales up 6.2%; FP Group +10.0%, Urban Outfitters +8.4%, Anthropologie +3.0%
• Nuuly subscription sales up 28.6% on 30.4% higher average active subscribers
• Q2 gross profit $721.6 million, up 27.4%; gross margin +580 bps
• Share repurchases 4.6 million shares for about $300 million in six months

Negative

• Adjusted gross margin for first six months down 6 bps year over year
• Retail markdowns increased, driven by Anthropologie, pressuring adjusted gross margin
• SG&A expenses up 10.5% in Q2 and 11.0% year to date
• SG&A deleverage of 4 bps as a percentage of net sales for first six months
• Total inventory up $82.3 million, or 11.8%, versus July 31, 2025

News Explained

As of July 31, inventory was $82.3 million higher year over year, alongside expansion to 801 company-owned stores.

The URBN release reports that, as of July 31, 2026, the company operated 801 company-owned stores, up from 784 at January 31, 2026, after 23 openings and 6 closings.

Total inventory was $82.3 million higher than a year earlier, an 11.8% increase; the company attributed the retail increase to higher sales and the timing of inventory receipts.

Market reaction after Q2 earnings report: URBN -7.17%

-7.17% $77.00 3.9x vol

15m delay

-7.17% Vs previous close

+6.8% Peak in 7 min

$77.00 Last Price

$73.00 $84.00 Day Range

$6.59B Market Cap

3.9x Rel. Volume

Following this news, URBN has declined 7.17%, reflecting a notable negative market reaction. Argus tracked a peak move of +6.8% during the session. Our momentum scanner has triggered 84 alerts so far, indicating high trading interest and price volatility. The stock is currently trading at $77.00. Trading volume is very high at 3.9x the average, suggesting heavy selling pressure.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Market Context

The stock is up +8.7% following this news. URBN’s prior earnings release was followed by a 2.92% 24-...

Analysis

The stock is up +8.7% following this news. URBN’s prior earnings release was followed by a 2.92% 24-hour gain. The current results can be compared with that precedent, while moderate short positioning represented a sourced volatility risk without establishing a causal market response.

Key Figures

Net Income: $240.7 million Diluted EPS: $2.78 Adjusted Net Income: $149.3 million +5 more

8 metrics

Net Income $240.7 million Three months ended July 31, 2026

Diluted EPS $2.78 Three months ended July 31, 2026

Adjusted Net Income $149.3 million Three months ended July 31, 2026

Adjusted Diluted EPS $1.72 Three months ended July 31, 2026

Total Company Net Sales $1.66 billion, up 10.4% Three months ended July 31, 2026

Comparable Retail Sales Up 6.2% Three months ended July 31, 2026

Subscription Sales Up 28.6% Three months ended July 31, 2026

Total Inventory Up 11.8%, or $82.3 million As of July 31, 2026, versus July 31, 2025

Historical Context

1 past event · Latest: May 20 (Positive)

Pattern 1 events

Date	Event	Sentiment	24h Move	Catalyst
May 20	earnings report	Positive	+2.9%	Record Q1 sales and income followed by higher subscription and wholesale growth.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

The prior earnings release was followed by a 2.92% 24-hour gain.

Key Terms

ieepa, non-gaap financial measures, basis points, comparable retail segment net sales

4 terms

ieepa regulatory

"International Emergency Economic Powers Act ("IEEPA")"

A U.S. law that gives the president broad authority to control trade, freeze assets, and block financial transactions during a declared national emergency. Investors care because those powers can abruptly restrict a company's ability to sell products, access cash, or do business with certain countries or parties, creating sudden risks to revenues, supply chains and share prices — like an emergency brake that can stop or reroute parts of a business overnight.

non-gaap financial measures financial

"Reconciliation of Non-GAAP Financial Measures"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

basis points financial

"gross profit rate increased by 580 basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

comparable retail segment net sales financial

"with comparable Retail segment net sales increasing 6.2%"

Net sales for the retail portion of a business that are measured on a 'comparable' basis by excluding revenue from new or closed stores, major acquisitions, or other structural changes so the current period is compared only with outlets and channels that were open in both periods. It isolates underlying sales performance like a same-store-sales measure limited to a defined retail segment. Investors use it to see whether demand at existing stores is growing or shrinking independent of expansion or contraction, similar to checking whether a restaurant’s regular customers are ordering more or less, rather than counting revenue from a newly opened location.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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PHILADELPHIA, Aug. 26, 2026 (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 net income of $240.7 million and earnings per diluted share of $2.78 for the three months ended July 31, 2026. For the six months ended July 31, 2026, net income was $356.4 million and earnings per diluted share were $4.06.

For the three months ended July 31, 2026, adjusted net income was $149.3 million and adjusted earnings per diluted share were $1.72. For the six months ended July 31, 2026, adjusted net income was $265.0 million and adjusted earnings per diluted share were $3.02. Adjusted net income and adjusted earnings per diluted share for the three and six months ended July 31, 2026, excludes one-time benefits related to refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA"), associated interest income and a tax benefit related to the release of a valuation allowance against certain foreign net deferred tax assets. See “Reconciliation of Non-GAAP Financial Measures” included at the end of this release.

Total Company net sales for the three months ended July 31, 2026, increased 10.4% to a record $1.66 billion. Total Retail segment net sales increased 8.0%, with comparable Retail segment net sales increasing 6.2%. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and mid single-digit positive growth in retail store sales. Comparable Retail segment net sales increased 10.0% at FP Group, 8.4% at Urban Outfitters and 3.0% at Anthropologie. Subscription segment net sales increased 28.6% primarily driven by a 30.4% increase in average active subscribers in the current quarter versus the prior year quarter. Wholesale segment net sales increased 18.6% driven by a 19.2% increase in FP Group wholesale sales due to an increase in sales to specialty customers and department stores.

For the six months ended July 31, 2026, total Company net sales increased 10.9% to a record $3.14 billion. Total Retail segment net sales increased 8.0%, with comparable Retail segment net sales increasing 6.0%. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and mid single-digit positive growth in retail store sales. Comparable Retail segment net sales increased 9.9% at FP Group, 8.8% at Urban Outfitters and 2.5% at Anthropologie. Subscription segment net sales increased 31.4% primarily driven by a 31.8% increase in average active subscribers in the current period versus the prior year period. Wholesale segment net sales increased 21.7% driven by a 22.6% increase in FP Group wholesale sales primarily due to an increase in sales to specialty customers.

“We are pleased to report our highest adjusted profit quarter in Company history, marking our eighth consecutive quarter of record sales and profits. These results were driven by positive Retail segment ‘comps’ at every brand and continued double-digit growth in our Wholesale and Subscription segments,” said Richard A. Hayne, Chief Executive Officer. “Our customers continue to respond favorably to our fashion assortments. This gives us confidence in URBN's ongoing success,” 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,
	2026				2025				2026				2025
Net sales by brand
Anthropologie	$	634,535			$	606,954			$	1,223,608			$	1,176,885
FP Group		478,053				415,014				889,772				768,126
Urban Outfitters		360,015				333,171				664,742				606,676
Nuuly		178,605				138,932				345,869				263,286
Menus & Venues		10,707				10,684				19,269				19,283
Total Company	$	1,661,915			$	1,504,755			$	3,143,260			$	2,834,256
Net sales by segment
Retail Segment	$	1,392,520			$	1,289,269			$	2,613,434			$	2,419,779
Subscription Segment		178,605				138,932				345,869				263,286
Wholesale Segment		90,790				76,554				183,957				151,191
Total Company	$	1,661,915			$	1,504,755			$	3,143,260			$	2,834,256

For the three months ended July 31, 2026, the gross profit rate increased by 580 basis points compared to the three months ended July 31, 2025, and gross profit dollars increased 27.4% to $721.6 million from $566.2 million. For the three months ended July 31, 2026, the adjusted gross profit rate increased by 4 basis points compared to the three months ended July 31, 2025, and adjusted gross profit dollars increased 10.6% to $625.9 million from $566.2 million. The increase in the adjusted gross profit rate was primarily due to leverage in store occupancy costs due to the increase in comparable Retail segment store net sales and leverage in delivery expense as a result of several company initiatives to offset fuel surcharges, partially offset by an increase in Retail segment markdowns driven by Anthropologie and the negative impacts of tariffs and inbound freight fuel surcharges on initial merchandise costs. The increase in adjusted gross profit dollars was primarily due to higher net sales.

For the six months ended July 31, 2026, the gross profit rate increased by 299 basis points compared to the six months ended July 31, 2025, and gross profit dollars increased 19.8% to $1.26 billion from $1.06 billion. For the six months ended July 31, 2026, the adjusted gross profit rate decreased by 6 basis points compared to the six months ended July 31, 2025, and adjusted gross profit dollars increased 10.7% to $1.17 billion from $1.06 billion. The decrease in the adjusted gross profit rate was primarily due to an increase in Retail segment markdowns driven by Anthropologie and the impact of a prior year gain of $4.8 million, or 17 basis points, not repeated in the current year period, partially offset by leverage in store occupancy costs due to the increase in comparable Retail segment store net sales. The increase in adjusted gross profit dollars was primarily due to higher net sales.

As of July 31, 2026, total inventory increased by $82.3 million, or 11.8%, compared to total inventory as of July 31, 2025. Total Retail segment inventory increased 12.0% and Retail segment comparable inventory increased 8.4%. Wholesale segment inventory increased 10.0%. The increase in Retail segment inventory was due to the increase in net sales and timing of inventory receipts. The increase in Wholesale segment inventory was due to the increase in net sales.

For the three months ended July 31, 2026, selling, general and administrative expenses increased by $41.0 million, or 10.5%, compared to the three months ended July 31, 2025. Selling, general and administrative expenses were flat as a percentage of net sales compared to the three months ended July 31, 2025. The leverage in store payroll expenses due to the growth in Retail segment store net sales was offset by the deleverage in marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, along with increased artificial intelligence technology investments benefiting the Company's current and future operations. The dollar growth in selling, general and administrative expenses was primarily due to increased marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, as well as increased store payroll expenses to support the growth in Retail segment store net sales.

For the six months ended July 31, 2026, selling, general and administrative expenses increased by $83.1 million, or 11.0%, compared to the six months ended July 31, 2025. Selling, general and administrative expenses deleveraged 4 basis points as a percentage of net sales compared to the six months ended July 31, 2025. The deleverage in selling, general and administrative expenses was primarily related to deleverage in marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, along with increased artificial intelligence technology investments benefiting the Company's current and future operations. This was partially offset by a discrete benefit of $6.9 million, or 22 basis points, in the current year period resulting from the reversal of a litigation accrual, as well as leverage in store payroll expenses due to the growth in Retail segment store net sales. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, increased store payroll expenses to support the growth in Retail segment store net sales and increased artificial intelligence technology investments benefiting the Company's current and future operations.

The Company’s effective tax rate for the three months ended July 31, 2026, was 19.4%, compared to 21.5% in the three months ended July 31, 2025. The Company's adjusted effective tax rate for the three months ended July 31, 2026, was 24.8%. The Company's effective tax rate for the six months ended July 31, 2026, was 19.8%, compared to 21.5% in the six months ended July 31, 2025. The Company's adjusted effective tax rate for the six months ended July 31, 2026, was 23.0%. The change in the adjusted effective tax rate for the three and six months ended July 31, 2026, was primarily attributable to the ratio of foreign taxable earnings to global taxable earnings.

Net income for the three months ended July 31, 2026, was $240.7 million and earnings per diluted share were $2.78. Adjusted net income for the three months ended July 31, 2026, was $149.3 million and adjusted earnings per diluted share were $1.72. Net income for the six months ended July 31, 2026, was $356.4 million and earnings per diluted share were $4.06. Adjusted net income for the six months ended July 31, 2026, was $265.0 million and adjusted earnings per diluted share were $3.02.

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, 2026, the Company repurchased and subsequently retired 4.6 million shares for approximately $300 million. During the year ended January 31, 2026, the Company repurchased and subsequently retired 3.3 million shares for approximately $154 million. As of July 31, 2026, 10.0 million common shares were remaining under the program.

Store data for the six months ended July 31, 2026, was as follows:

		January 31,												July 31,
		2026				Openings				Closings				2026
Anthropologie NA			234				3				1				236
Anthropologie EU			20				1				—				21
Total Anthropologie			254				4				1				257
Free People NA			167				6				—				173
FP Movement NA			88				10				1				97
Free People EU			13				1				—				14
Total FP Group			268				17				1				284
Urban Outfitters NA			177				1				2				176
Urban Outfitters EU			76				1				1				76
Total Urban Outfitters			253				2				3				252
Menus & Venues			9				—				1				8
Total Company-Owned Stores			784				23				6				801
Franchisee-Owned Stores(1)			9				—				—				9
Total URBN			793				23				6				810

(1)    Includes 7 Urban Outfitters and 2 Anthropologie franchisee-owned stores.

Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands. The Company operates omni-channel retail operations including stores, websites and catalogs for the Anthropologie, Free People, FP Movement and Urban Outfitters brands across the United States, Canada and Europe; Menus & Venues restaurants; and Urban Outfitters and Anthropologie franchisee-owned stores in the Middle East. Free People, FP Movement and Urban Outfitters wholesale sell products to department and specialty stores worldwide, digital businesses and the Company's Retail segment. Nuuly is primarily a women's apparel subscription rental service offering 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/9wzhhhd4/.

As used in this document, unless otherwise defined, “Anthropologie” refers to the Company’s Anthropologie, Terrain and Maeve brands and “FP Group” 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, currency fluctuations, economic conditions and legal or regulatory changes, the effects of war and geopolitical instability, including impacts of the conflicts 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, 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 of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs such as retaliatory tariffs), border adjustment taxes or increases in duties or quotas, the unexpected closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.

URBAN OUTFITTERS, INC. Condensed Consolidated Statements of Income (amounts in thousands, except share and per share data) (unaudited)
	Three Months Ended								Six Months Ended
	July 31,								July 31,
	2026				2025				2026				2025
Net sales	$	1,661,915			$	1,504,755			$	3,143,260			$	2,834,256
Cost of sales		940,364				938,594				1,879,143				1,779,031
Gross profit		721,551				566,161				1,264,117				1,055,225
Selling, general and administrative expenses		432,812				391,774				835,697				752,611
Income from operations		288,739				174,387				428,420				302,614
Other income, net		9,801				8,886				15,986				18,532
Income before income taxes		298,540				183,273				444,406				321,146
Income tax expense		57,889				39,408				88,050				68,934
Net income	$	240,651			$	143,865			$	356,356			$	252,212
Net income per common share:
Basic	$	2.81			$	1.60			$	4.12			$	2.78
Diluted	$	2.78			$	1.58			$	4.06			$	2.73
Weighted-average common shares outstanding:
Basic		85,633,607				89,667,451				86,553,213				90,692,646
Diluted		86,667,561				91,167,981				87,719,187				92,304,624
AS A PERCENTAGE OF NET SALES
Net sales		100.0	%			100.0	%			100.0	%			100.0	%
Cost of sales		56.6	%			62.4	%			59.8	%			62.8	%
Gross profit		43.4	%			37.6	%			40.2	%			37.2	%
Selling, general and administrative expenses		26.0	%			26.0	%			26.6	%			26.5	%
Income from operations		17.4	%			11.6	%			13.6	%			10.7	%
Other income, net		0.6	%			0.6	%			0.5	%			0.6	%
Income before income taxes		18.0	%			12.2	%			14.1	%			11.3	%
Income tax expense		3.5	%			2.6	%			2.8	%			2.4	%
Net income		14.5	%			9.6	%			11.3	%			8.9	%

URBAN OUTFITTERS, INC. Condensed Consolidated Balance Sheets (amounts in thousands, except share data) (unaudited)
	July 31,				January 31,				July 31,
	2026				2026				2025
ASSETS
Current assets:
Cash and cash equivalents	$	598,756			$	369,206			$	332,171
Marketable securities		117,371				326,724				290,664
Accounts receivable, net of allowance for doubtful accounts of $1,102, $1,209 and $2,388, respectively		102,958				95,668				86,922
Inventory		778,539				700,945				696,199
Prepaid expenses and other current assets		226,772				193,561				213,356
Total current assets		1,824,396				1,686,104				1,619,312
Property and equipment, net		1,658,270				1,466,236				1,376,811
Operating lease right-of-use assets		1,047,947				1,051,109				1,011,840
Marketable securities		229,407				461,858				366,336
Other assets		362,967				342,306				336,494
Total Assets	$	5,122,987			$	5,007,613			$	4,710,793
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	372,642			$	327,903			$	335,985
Current portion of operating lease liabilities		223,177				225,478				227,105
Accrued expenses, accrued compensation and other current liabilities		558,300				564,713				533,058
Total current liabilities		1,154,119				1,118,094				1,096,148
Non-current portion of operating lease liabilities		990,197				1,000,088				953,025
Other non-current liabilities		124,455				74,144				81,228
Total Liabilities		2,268,771				2,192,326				2,130,401
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—				—				—
Common shares; $.0001 par value, 200,000,000 shares authorized, 85,650,390, 89,698,222 and 89,696,293 shares issued and outstanding, respectively	9				9				9
Additional paid-in-capital		7,022				19,912				7,277
Retained earnings		2,877,697				2,817,448				2,604,741
Accumulated other comprehensive loss		(30,512	)			(22,082	)			(31,635	)
Total Shareholders’ Equity		2,854,216				2,815,287				2,580,392
Total Liabilities and Shareholders’ Equity	$	5,122,987			$	5,007,613			$	4,710,793

URBAN OUTFITTERS, INC. Condensed Consolidated Statements of Cash Flows (amounts in thousands) (unaudited)
		Six Months Ended
		July 31,
		2026				2025
Cash flows from operating activities:
Net income		$	356,356			$	252,212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			73,637				61,400
Non-cash lease expense			106,053				106,546
Provision for deferred income taxes			73,591				11,608
Share-based compensation expense			15,702				14,956
Amortization of tax credit investment			7,452				8,587
Loss on disposition of property and equipment, net			388				262
Changes in assets and liabilities:
Receivables			(7,546	)			(12,025	)
Inventory			(79,103	)			(70,611	)
Prepaid expenses and other assets			(70,389	)			(25,095	)
Payables, accrued expenses and other liabilities			36,095				23,336
Operating lease liabilities			(120,494	)			(120,130	)
Net cash provided by operating activities			391,742				251,046
Cash flows from investing activities:
Cash paid for property and equipment			(268,056	)			(107,549	)
Cash paid for marketable securities			(117,984	)			(220,293	)
Sales and maturities of marketable securities			555,597				295,861
Net cash provided by (used in) investing activities			169,557				(31,981	)
Cash flows from financing activities:
Proceeds from the exercise of stock options			—				928
Share repurchases related to share repurchase program			(299,996	)			(151,935	)
Share repurchases related to taxes for share-based awards			(22,092	)			(21,144	)
Tax credit investment liability payments			(7,803	)			(8,437	)
Net cash used in financing activities			(329,891	)			(180,588	)
Effect of exchange rate changes on cash and cash equivalents			(1,858	)			3,213
Increase in cash and cash equivalents			229,550				41,690
Cash and cash equivalents at beginning of period			369,206				290,481
Cash and cash equivalents at end of period		$	598,756			$	332,171

Important Information Regarding Non-GAAP Financial Measures

In addition to evaluating the financial condition and results of our operations in accordance with U.S. generally accepted accounting principles (“GAAP”), from time to time our management evaluates and analyzes results and any impact on the Company of certain events outside of normal, or “core,” business and operations, by considering adjusted financial measures not prepared in accordance with GAAP. Examples of items that we consider non-core include refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA"), associated interest income and the release of a valuation allowance against certain foreign net deferred tax assets. In order to improve the transparency of our disclosures, provide a meaningful presentation of results from our core business operations and improve period-over-period comparability, we have included certain adjusted financial measures for fiscal 2027 that exclude the impact of these non-core business items.

We believe these adjusted financial measures are important indicators of our recurring results of operations because they exclude items that may not be indicative of, or are unrelated to, our underlying results of operations and provide a useful baseline for analyzing trends in our underlying business. Management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the Company’s financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company’s financial position, results of operations or cash flows and should therefore be considered in assessing the Company’s actual and future financial condition and performance. These adjusted financial measures are not consistent with GAAP and may not be calculated the same as similarly titled measures used by other companies.

URBAN OUTFITTERS, INC.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(unaudited)
Reconciliation of Total Company Adjusted Gross Profit:
	Three Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Gross profit (GAAP)	$	721,551			43.4	%		$	566,161			37.6	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Adjusted gross profit (Non-GAAP)	$	625,891			37.7	%		$	566,161			37.6	%
	Six Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Gross profit (GAAP)	$	1,264,117			40.2	%		$	1,055,225			37.2	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Adjusted gross profit (Non-GAAP)	$	1,168,457			37.2	%		$	1,055,225			37.2	%

Reconciliation of Total Company Adjusted Income From Operations:
	Three Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Income from operations (GAAP)	$	288,739			17.4	%		$	174,387			11.6	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Adjusted income from operations (Non-GAAP)	$	193,079			11.6	%		$	174,387			11.6	%
	Six Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Income from operations (GAAP)	$	428,420			13.6	%		$	302,614			10.7	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Adjusted income from operations (Non-GAAP)	$	332,760			10.6	%		$	302,614			10.7	%

URBAN OUTFITTERS, INC.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(unaudited)
Reconciliation of Total Company Adjusted Income Tax Expense and Adjusted Effective Tax Rate:
	Three Months Ended
	July 31,
	2026					2025
	$'s					$'s
Income before income taxes (GAAP)	$	298,540				$	183,273
Adjustments:
IEEPA tariff refunds (a)		(95,660	)				—
Interest income related to IEEPA tariff refunds (b)		(4,445	)				—
Adjusted income before income taxes (Non-GAAP)	$	198,435				$	183,273
Income tax expense (GAAP)	$	57,889				$	39,408
Adjustments:
Provision for income taxes on adjustments (c)		(24,978	)				—
Release of valuation allowance (d)		16,225					—
Adjusted income tax expense (Non-GAAP)	$	49,136				$	39,408
Effective income tax rate (GAAP)		19.4	%				21.5	%
Adjustments		5.4					—
Adjusted effective income tax rate (Non-GAAP)		24.8	%				21.5	%
	Six Months Ended
	July 31,
	2026					2025
	$'s					$'s
Income before income taxes (GAAP)	$	444,406				$	321,146
Adjustments:
IEEPA tariff refunds (a)		(95,660	)				—
Interest income related to IEEPA tariff refunds (b)		(4,445	)				—
Adjusted income before income taxes (Non-GAAP)	$	344,301				$	321,146
Income tax expense (GAAP)	$	88,050				$	68,934
Adjustments:
Provision for income taxes on adjustments (c)		(24,978	)				—
Release of valuation allowance (d)		16,225					—
Adjusted income tax expense (Non-GAAP)	$	79,297				$	68,934
Effective income tax rate (GAAP)		19.8	%				21.5	%
Adjustments		3.2					—
Adjusted effective income tax rate (Non-GAAP)		23.0	%				21.5	%

URBAN OUTFITTERS, INC.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(unaudited)
Reconciliation of Total Company Adjusted Net Income and Adjusted Diluted EPS:
	Three Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Net income (GAAP)	$	240,651			14.5	%		$	143,865			9.6	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Interest income related to IEEPA tariff refunds (b)		(4,445	)						—
Provision for income taxes on adjustments (c)		24,978							—
Release of valuation allowance (d)		(16,225	)						—
Adjusted net income (Non-GAAP)	$	149,299			9.0	%		$	143,865			9.6	%
Diluted EPS (GAAP)	$	2.78						$	1.58
Adjustments, net of tax		(1.06	)						—
Adjusted diluted EPS (Non-GAAP)	$	1.72						$	1.58
	Six Months Ended
	July 31,
	2026							2025
	$'s			% of Net Sales				$'s			% of Net Sales
Net income (GAAP)	$	356,356			11.3	%		$	252,212			8.9	%
Adjustments:
IEEPA tariff refunds (a)		(95,660	)						—
Interest income related to IEEPA tariff refunds (b)		(4,445	)						—
Provision for income taxes on adjustments (c)		24,978							—
Release of valuation allowance (d)		(16,225	)						—
Adjusted net income (Non-GAAP)	$	265,004			8.4	%		$	252,212			8.9	%
Diluted EPS (GAAP)	$	4.06						$	2.73
Adjustments, net of tax		(1.04	)						—
Adjusted diluted EPS (Non-GAAP)	$	3.02						$	2.73
(a) Included in "Cost of sales" is a one-time benefit related to refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA") which the Company received during the three and six months ended July 31, 2026.
(b) Included in "Other income, net" is interest income related to refunds for IEEPA tariffs received during the three and six months ended July 31, 2026.
(c) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustment.
(d) During the three and six months ended July 31, 2026, the Company released a valuation allowance against certain of its foreign net deferred tax assets, resulting in a benefit included in "Income tax expense."

Contact:		Oona McCullough
		Executive Director of Investor Relations
		(215) 454-4806

FAQ

How did URBN (NASDAQ: URBN) perform financially in Q2 2026?

URBN reported Q2 2026 net income of $240.7 million and EPS of $2.78 on net sales of $1.66 billion. According to Urban Outfitters, sales rose 10.4% year over year and gross profit dollars increased 27.4% to $721.6 million.

What were URBN's adjusted earnings for Q2 2026 and why were they adjusted?

URBN’s adjusted Q2 2026 net income was $149.3 million with adjusted EPS of $1.72. According to Urban Outfitters, adjustments exclude one-time IEEPA tariff refunds, associated interest income, and a tax benefit from releasing a valuation allowance against certain foreign deferred tax assets.

How did URBN's different segments perform in Q2 2026?

URBN’s Q2 2026 Retail segment net sales rose 8.0%, with comparable sales up 6.2%. According to Urban Outfitters, Subscription segment sales (Nuuly) increased 28.6%, Wholesale sales grew 18.6%, and FP Group, Urban Outfitters and Anthropologie all delivered positive comparable growth.

What drove URBN's gross margin and profit improvement in Q2 2026?

URBN’s Q2 2026 gross profit rate increased by 580 basis points, with gross profit reaching $721.6 million. According to Urban Outfitters, higher comparable store sales leveraged occupancy and delivery expenses, while adjusted gross profit dollars rose 10.6% mainly from higher net sales.

How much stock did URBN repurchase in the first half of fiscal 2027?

URBN repurchased and retired 4.6 million shares for about $300 million in the six months ended July 31, 2026. According to Urban Outfitters, 10.0 million common shares remained available under the existing 20 million share repurchase authorization.

How fast is URBN's Nuuly subscription business growing as of Q2 2026?

Nuuly’s Q2 2026 net sales increased 28.6% year over year, supported by subscriber gains. According to Urban Outfitters, this growth was primarily driven by a 30.4% increase in average active subscribers compared with the prior-year quarter.

What were URBN's year-to-date results through July 31, 2026?

For the six months ended July 31, 2026, URBN net income was $356.4 million and EPS $4.06 on net sales of $3.14 billion. According to Urban Outfitters, adjusted net income was $265.0 million with adjusted EPS of $3.02.