Urban Outfitters Stock Earnings Reports

Urban Outfitters reported a record Q2 with total sales up ~11% to about $1.5B and net income up 22% to $144M ($1.58 diluted EPS). All brands delivered positive retail comps across geographies; four of five brands posted record Q2 sales. Highlights: Nuuly posted 53% revenue growth and a 9% operating margin with a 48% increase in average subscribers (adding ~120k subscribers year-over-year) and is scaling logistics capacity. Free People and FP Movement showed strong growth (Free People total revenue +14%; FP Movement +30%) with wholesale also up mid-to-high teens. Anthropologie continues multi-quarter comp strength and is expanding owned brands (Maeve standalone launch planned). Gross profit dollars rose ~15% and gross margin improved ~113 bps to 37.6% driven by lower markdowns and occupancy leverage; SG&A grew 13% due to higher marketing. Management expects FY26 gross margin to improve ~100 bps (second half ~+50 bps vs. last year), Q3 sales to grow in the high-single-digits, retail comps mid-single-digits, Nuuly mid-double-digit revenue growth, and wholesale mid-single-digit growth. Tariffs are a material near-term headwind — management estimates roughly a 75-basis-point headwind to gross margin in H2 (including 50% tariffs on India) but expects to mitigate via vendor negotiations, sourcing shifts, transportation mode changes, selective gentle price increases, and expects some carryover into early next year. Inventory was intentionally brought in early to mitigate tariff timing; FY26 capex ~ $270M with ~69 openings and ~17 closures planned (growth concentrated in FP Movement, Free People, Anthropologie). Overall tone: confident — strong top-line momentum, improving profitability trends, targeted investments in marketing, stores, and Nuuly logistics, while actively managing tariff risk.