Urban Outfitters, Inc. Q2 FY2026 earnings call

Key Points

• Dick Hayne noted total sales grew 11% and net income 22%, with all brands achieving positive comps.
• Frank Conforti highlighted Q2 results: total sales $1.5B (+11%), gross profit $566M (+15%), Nuuly's 53% revenue growth and 48% subscriber increase. Anthropologie had 6% retail comp growth, Free People 14% revenue growth.
• Sheila Harrington reported Urban Outfitters global 5% revenue growth, 4% retail comps, double-digit growth in Europe, and positive comps in North America.
• Emma Wiston emphasized Urban EU's double-digit growth, strong product execution, and localized inventory.
• Shay Jensen discussed North America's progress in product assortment, marketing, and inventory management.
• Melanie Marein-Efron outlined Q3 and full-year guidance, including sales growth expectations, gross margin outlook, SG&A plans, and store openings/closings.

Total Urban Outfitters, Inc. sales grew by over 11% to reach a Q2 record of $1.5 billion. All retail segment brands delivered positive retail segment comps, with four of five brands posting record second-quarter sales. Nuuly had 53% revenue growth, driven by a 48% increase in average active subscribers. The wholesale segment saw an 18% revenue increase. Gross profit was $566 million, a 15% increase. Anthropologie had a 6% retail segment comp increase, Free People had 14% revenue growth, Urban Outfitters EU had an 11% retail segment comp increase, and Urban Outfitters North America had a 4% retail segment comp increase.

Forward-Looking Statements

• Total company sales expected to grow in the high single digits in Q3.
• Retail segment comps: mid-single digit growth for Anthropologie, Free People, and Urban.
• Nuuly projected mid-double-digit revenue growth.
• Wholesale mid-single-digit growth.
• Full-year gross profit margins expected to increase ~100 basis points, with second half growth.
• SG&A expected to grow in line with sales, with marketing spending impacts in Q3 and Q4.
• Plan to open ~69 stores and close ~17, with most net new from FP Movement, Free People, and Anthropologie.

Risks

• Tariff uncertainty, including 50% tariff on goods from India, impacting gross margins. Mitigation strategies include negotiating with vendors, diversifying countries of origin, adjusting transportation, and gentle price increases.

Q: Talked about tariff impact and own brand performance.

A: Frank Conforti discussed tariff mitigation strategies and Tricia Smith spoke about Anthropologie's own brand penetration at ~71% of total business.

Q: Follow-up on pricing and denim trends.

A: Frank and Dick Hayne discussed pricing strategies focusing on protecting opening price points and denim silhouettes like full-legged bottoms.

Q: Consumer health and Urban's profitability.

A: Dick Hayne talked about consumer optimism from positive traffic, transactions, and conversion, while Shay Jensen discussed Urban's momentum and path to profitability.

Q: De minimis exemption and sales spread.

A: Frank Conforti mentioned de minimis is immaterial and wholesale's impact on the sales spread between total and retail segment comps.

Q: Profitability at Urban and Maeve store.

A: Frank Conforti discussed Urban's progress towards profitability and Tricia Smith talked about Maeve's first standalone store opening in Raleigh, NC.

Q: Home assortment, dorm/chipotle assortments, men's at Urban.

A: Tricia Smith and Shay Jensen discussed home assortment growth, dorm/chipotle collabs, and men's assortment rebuilding progress.

Q: Nuuly's opportunity.

A: Dave Hayne talked about Nuuly's growth, ~370,000 active subscribers, and significant market opportunity for apparel rental.

Q: Price increases and marketing.

A: Sheila Harrington and Dick Hayne discussed price increases on select pieces and marketing spending plans, with FP Movement showing strong performance