Urban Outfitters, Inc. Q4 FY2026 earnings call

• URBN team delivered exceptional Q4 results, total revenue up 10% to $1.8B. Adjusted EPS up 38% Q4 and 35% full year. - All retail segment brands had positive comps, 4 brands had record Q4 sales. Nuuly had strong revenue growth. Wholesale segment had 9% revenue growth. - Gross profit up 14% to record, rate improved due to lower markdowns, occupancy leverage, etc. - SG&A up 9% due to store payroll and marketing spend. - Operating income up 27% to record. - Anthropologie had 4% retail comp, digital strong, home categories growing. - Free People total revenue up 10%, Retail segment comp over 5%, Wholesale up 10%, FP Movement had strong growth and store openings. - Urban Outfitters global comp 10%, returned to profitability, North America and Europe performing well. - Nuuly had strong revenue and profitability growth. - Discussed tariff impacts and mitigation efforts.

Total revenue grew by 10% in the quarter, hitting a record $1.8 billion. Adjusted earnings per share jumped 38% for the quarter and 35% for the full year. All retail segment brands delivered positive comps. Nuuly maintained subscriber growth. Urban brand returned to profitability. Total URBN sales grew over 10% to $1.8 billion in Q4. Retail segment comps positive, 4 of 5 brands had record Q4 sales. Nuuly had 43% revenue growth with over 120,000 more average active subscribers. Wholesale segment had 9% revenue growth. Gross profit up 14% to nearly $600 million, rate 33.3%. SG&A up 9%. Operating income up 27% to $159 million. Anthropologie had 4% retail segment comp, digital strong, home accessories and furniture growing. Free People total revenue up 10%, Retail segment comp over 5%, Wholesale up 10%, FP Movement had 29% revenue growth and 21% retail segment comp, opened 12 new stores in Q4. Urban Outfitters global Retail segment comp 10%, North America 8% and Europe 12%, returned to profitability. Nuuly total revenue up 43%, surpassed $500 million annual revenue, increased profitability over $21 million.

• Full year FY '27 total company sales growth expected high single-digit, driven by mid-single-digit Retail segment comp, mid-double-digit Nuuly revenue growth, mid-single-digit wholesale growth. - Q1 FY '27 total company sales growth expected high single-digit, driven by mid-single-digit Retail segment comp (Urban Outfitters high single, Free People mid-single, Anthropologie low single), Nuuly mid-double-digit revenue growth, Wholesale mid-teen revenue growth. - Full year FY '27 gross profit margins expected up ~25 basis points, Q1 expected down ~25-50 basis points. - SG&A growth expected to outpace sales growth due to technology investments. - Capital expenditures planned at ~$385 million, breakdown for retail store expansion, logistics, technology. - Plan to open ~57 new stores and close ~14 stores in FY '27, net new store growth driven by FP Movement, Free People, Anthropologie. - Plan to repurchase shares to offset dilution.

• Tariffs negatively impacted product margins starting Q2. - Uncertainty around Section 122 tariffs and their impact on IMU. - Extreme weather events can impact store sales. - Dependence on consumer behavior and macroeconomic conditions.

Q: Focus on Anthropologie, how ended 4Q and began 1Q, inventory?

A: Sales accelerated post-holiday with new spring product, Jan had high single-digit comp, Feb had slower start, apparel inventory good, home/furniture inventories front-loaded.

Q: Gross margin better than planned, what came in better/worse, first quarter to date?

A: Better due to lower markdowns at Urban and Free People, top line stronger, Q1 mid-single-digit total Retail segment comp, Anthropologie low single, Free People mid-single, Urban high single, impacted by weather.

Q: Product category/marketing opportunities for Urban Outfitters in NA?

A: Focus on bottoms, accessories, gifting/novelties, marketing on diverse platforms.

Q: Real estate strategy, tariffs on pricing?

A: Store openings include signed leases, negotiating others, no plans to change pricing strategy due to tariffs.

Q: Margin outlook, medium-term opportunity, brand-wise?

A: Gross margin expected to improve 25 basis points, SG&A ahead of sales due to tech investments, tariff uncertainty.

Q: Anthropologie product/marketing adjustments, competitive position?

A: Modernizing product, owned brands strong, marketing strategies to drive traffic.

Q: Urban Outfitters profitability, tariff upside, India/Bangladesh deals?

A: North America improved, Europe profitable, tariff upside possible, India deal baked in.

Q: Nuuly subscriptions, age, holiday gifting?

A: Subscribers strong, slight age lowering, holiday gifting boosts new subscribers.

Q: Urban Outfitters Q-to-date, Free People comps, FP Movement?

A: UO NA/Europe on plan, Free People comps positive, FP Movement had strong Q4.

Q: UO domestic business pressure points, delivery expense leverage, fulfillment CapEx?

A: Product margin improvement, delivery per package due to inventory positioning and order consolidation, logistics CapEx for Nuuly and retail automation.