Q2 2025 Urban Outfitters Inc Earnings Call Transcript
Key Points
- Urban Outfitters Inc (URBN) reported a 6% increase in total sales, reaching a Q2 record of $1.4 billion.
- Four out of five brands posted record second-quarter sales and profits.
- Nuuly experienced robust double-digit revenue growth due to a 55% increase in average active subscribers.
- Gross profit dollars increased by 8% to $493 million, with a gross profit rate improvement of 68 basis points to 36.5%.
- Anthropologie Group achieved its 14th consecutive quarter of growth, with a 7% retail segment comp and record second-quarter operating income up 32%.
- Urban Outfitters brand recorded a 9% retail segment comp decline, with both North America and Europe showing slight improvement from Q1.
- SG&A expenses increased by 8% and deleveraged by 32 basis points, primarily due to the Urban Outfitters brand not reducing SG&A at the same rate as their sales decline.
- There was a slight deceleration in retail segment sales towards the end of July and into August, with overall purchasing activity showing some softening.
- The company anticipates higher markdowns in Q3 due to recent sales trend deceleration, which could impact gross profit margins.
- Urban Outfitters North America has faced significant challenges in both top and bottom-line performance, requiring a strategic overhaul to regain market position.
Good day, ladies and gentlemen. And welcome to the Urban Outfitters, Inc., second-quarter Fiscal '25 earnings call. (Operator Instructions) As a reminder, this conference call is being recorded.
I would now like to introduce Oona McCullough, Executive Director of Investor Relations. Ms. McCullough, you may begin.
Good afternoon. And welcome to the URBN second-quarter Fiscal 2025 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three- and six-month period ending July 31, 2024.
The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the company's filings with the Securities and Exchange Commission.
On today's call, you'll hear from Richard Hayne, CEO URBN
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