URBN Reports Record Q2 Sales and Income

Rhea-AI Summary

Urban Outfitters (NASDAQ:URBN) reported record-breaking Q2 2025 results, with net income reaching $143.9 million and earnings per diluted share of $1.58. Total company net sales increased 11.3% to $1.50 billion, with strong performance across all segments.

The Retail segment saw 7.8% growth, with comparable sales up 5.6%. The Subscription segment (Nuuly) demonstrated exceptional growth of 53.2%, driven by a 48.1% increase in active subscribers. Wholesale segment sales grew 18.1%, primarily due to Free People's success with specialty customers.

All five brands achieved positive comparable sales across all geographies, with Anthropologie leading at $606.9 million in sales, followed by Free People at $415.0 million and Urban Outfitters at $333.2 million. The company's gross profit rate improved by 113 basis points, while inventory increased by 15.1% year-over-year.

[ "Record Q2 net income of $143.9 million, up from $117.5 million year-over-year", "Total company net sales increased 11.3% to $1.50 billion", "Subscription segment (Nuuly) grew 53.2% with 48.1% increase in active subscribers", "Gross profit rate improved by 113 basis points", "All five brands achieved positive comparable sales growth across all geographies", "Effective tax rate decreased to 21.5% from 23.0% year-over-year" ]

Positive

• None.

Negative

• Inventory levels increased by 15.1% compared to previous year
• Selling, general and administrative expenses deleveraged 28 basis points
• Marketing expenses increased significantly to support customer growth
• Store payroll expenses increased to support retail segment growth

Insights

Financial Analyst

URBN delivered exceptional Q2 results with double-digit growth across all segments, improved margins, and strong inventory management.

Urban Outfitters has posted record-breaking Q2 results that demonstrate remarkable strength across all business dimensions. The company achieved $1.50 billion in quarterly revenue, growing 11.3% year-over-year, with net income reaching $143.9 million and EPS of $1.58.

The growth was impressively balanced across all segments: Retail segment sales increased 7.8% with comparable sales up 5.6%, Subscription segment (Nuuly) surged 53.2% driven by a 48.1% increase in active subscribers, and Wholesale segment grew 18.1%. All five brands achieved positive comparable sales across all geographies, with Anthropologie (their largest brand) growing 5.7%, Free People up 6.7%, and Urban Outfitters up 4.2%.

Profitability metrics show even more impressive improvements. Gross margin expanded 113 basis points to 37.6%, primarily due to improved markdowns at Urban Outfitters brand and leverage in occupancy costs. This drove a 14.8% increase in gross profit dollars to $566.2 million. Operating income margin improved to 11.6% from 10.7% last year.

The company's inventory position bears watching - total inventory increased 15.1% compared to last year, slightly outpacing sales growth. However, management attributes this to increased sales and planned early receipts of merchandise, not a buildup of excess inventory.

Urban Outfitters continues to expand its store fleet strategically, opening 27 new locations while closing only 4 during the period. The company also returned capital to shareholders through an aggressive share repurchase program, buying back 3.3 million shares for approximately $152 million during the first half of the year.

The effective tax rate decreased to 21.5% from 23.0%, providing an additional boost to bottom-line results. This reduction was primarily attributable to the ratio of foreign taxable earnings to global taxable earnings and the release of certain state and local valuation allowances.

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 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.

(Tables follow)

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,
	2025				2024				2025				2024
Net sales	$	1,504,755			$	1,351,959			$	2,834,256			$	2,552,691
Cost of sales (excluding store impairment and lease abandonment charges)		938,594				858,674				1,779,031				1,646,420
Store impairment and lease abandonment charges		—				—				—				4,601
Gross profit		566,161				493,285				1,055,225				901,670
Selling, general and administrative expenses		391,774				348,150				752,611				681,911
Income from operations		174,387				145,135				302,614				219,759
Other income, net		8,886				7,429				18,532				13,675
Income before income taxes		183,273				152,564				321,146				233,434
Income tax expense		39,408				35,079				68,934				54,184
Net income	$	143,865			$	117,485			$	252,212			$	179,250
Net income per common share:
Basic	$	1.60			$	1.26			$	2.78			$	1.93
Diluted	$	1.58			$	1.24			$	2.73			$	1.89
Weighted-average common shares outstanding:
Basic		89,667,451				93,071,401				90,692,646				93,097,694
Diluted		91,167,981				94,684,003				92,304,624				94,842,065
AS A PERCENTAGE OF NET SALES
Net sales		100.0	%			100.0	%			100.0	%			100.0	%
Cost of sales (excluding store impairment and lease abandonment charges)		62.4	%			63.5	%			62.8	%			64.5	%
Store impairment and lease abandonment charges		—				—				—				0.2	%
Gross profit		37.6	%			36.5	%			37.2	%			35.3	%
Selling, general and administrative expenses		26.0	%			25.8	%			26.5	%			26.7	%
Income from operations		11.6	%			10.7	%			10.7	%			8.6	%
Other income, net		0.6	%			0.6	%			0.6	%			0.5	%
Income before income taxes		12.2	%			11.3	%			11.3	%			9.1	%
Income tax expense		2.6	%			2.6	%			2.4	%			2.1	%
Net income		9.6	%			8.7	%			8.9	%			7.0	%

URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)
	July 31,				January 31,				July 31,
	2025				2025				2024
ASSETS
Current assets:
Cash and cash equivalents	$	332,171			$	290,481			$	209,129
Marketable securities		290,664				319,949				352,360
Accounts receivable, net of allowance for doubtful accounts of $2,388, $1,384 and $1,429, respectively		86,922				74,014				78,749
Inventory		696,199				621,146				604,667
Prepaid expenses and other current assets		213,356				187,206				228,966
Total current assets		1,619,312				1,492,796				1,473,871
Property and equipment, net		1,376,811				1,331,077				1,314,923
Operating lease right-of-use assets		1,011,840				942,666				941,404
Marketable securities		366,336				410,208				209,469
Other assets		336,494				342,733				319,156
Total Assets	$	4,710,793			$	4,519,480			$	4,258,823
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	335,985			$	295,767			$	299,351
Current portion of operating lease liabilities		227,105				227,149				227,987
Accrued expenses, accrued compensation and other current liabilities		533,058				552,763				483,080
Total current liabilities		1,096,148				1,075,679				1,010,418
Non-current portion of operating lease liabilities		953,025				871,209				875,174
Other non-current liabilities		81,228				101,088				131,798
Total Liabilities		2,130,401				2,047,976				2,017,390
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—				—				—
Common shares; $.0001 par value, 200,000,000 shares authorized, 89,696,293, 92,281,748 and 92,260,283 shares issued and outstanding, respectively	9				9				9
Additional paid-in-capital		7,277				15,067				—
Retained earnings		2,604,741				2,503,068				2,279,856
Accumulated other comprehensive loss		(31,635	)			(46,640	)			(38,432	)
Total Shareholders’ Equity		2,580,392				2,471,504				2,241,433
Total Liabilities and Shareholders’ Equity	$	4,710,793			$	4,519,480			$	4,258,823

URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
	Six Months Ended
	July 31,
	2025				2024
Cash flows from operating activities:
Net income	$	252,212			$	179,250
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		61,400				56,552
Non-cash lease expense		106,546				103,146
Provision for deferred income taxes		11,608				9,208
Share-based compensation expense		14,956				15,556
Amortization of tax credit investment		8,587				8,760
Store impairment and lease abandonment charges		—				4,601
Loss on disposition of property and equipment, net		262				420
Changes in assets and liabilities:
Receivables		(12,025	)			(11,606	)
Inventory		(70,611	)			(54,050	)
Prepaid expenses and other assets		(25,095	)			(48,318	)
Payables, accrued expenses and other liabilities		23,336				16,858
Operating lease liabilities		(120,130	)			(116,563	)
Net cash provided by operating activities		251,046				163,814
Cash flows from investing activities:
Cash paid for property and equipment		(107,549	)			(98,854	)
Cash paid for marketable securities		(220,293	)			(166,428	)
Sales and maturities of marketable securities		295,861				204,145
Net cash used in investing activities		(31,981	)			(61,137	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		928				851
Share repurchases related to share repurchase program		(151,935	)			(52,262	)
Share repurchases related to taxes for share-based awards		(21,144	)			(14,977	)
Tax credit investment liability payments		(8,437	)			(2,713	)
Net cash used in financing activities		(180,588	)			(69,101	)
Effect of exchange rate changes on cash and cash equivalents		3,213				(2,768	)
Increase in cash and cash equivalents		41,690				30,808
Cash and cash equivalents at beginning of period		290,481				178,321
Cash and cash equivalents at end of period	$	332,171			$	209,129

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

FAQ

What were Urban Outfitters (URBN) Q2 2025 earnings results?

URBN reported record Q2 2025 earnings with net income of $143.9 million and earnings per diluted share of $1.58. Total net sales increased 11.3% to $1.50 billion.

How did URBN's different brands perform in Q2 2025?

Anthropologie led with $606.9 million in sales (5.7% growth), Free People reached $415.0 million (6.7% growth), and Urban Outfitters achieved $333.2 million (4.2% growth).

What was URBN's Nuuly subscription segment growth in Q2 2025?

Nuuly showed exceptional growth with 53.2% increase in net sales, primarily driven by a 48.1% increase in average active subscribers compared to the previous year.

How much inventory did URBN have as of July 31, 2025?

Total inventory increased by $91.5 million, or 15.1% compared to July 31, 2024, with Retail segment inventory up 15.0% and comparable Retail segment inventory up 11.3%.

What is URBN's share repurchase program status?

As of July 31, 2025, 14.7 million common shares remained under the program. During the first six months of 2025, URBN repurchased and retired 3.3 million shares for approximately $152 million.