Q3 2025 Urban Outfitters Inc Earnings Call Transcript
Key Points
- Urban Outfitters Inc (URBN) reported record third-quarter sales and profits, surpassing expectations with a 6% increase in total sales to $1.4 billion.
- Nuuly, the fashion apparel rental business, achieved a 51% increase in average active subscribers, contributing to robust double-digit revenue growth.
- The Free People brand delivered a 10% increase in total sales, driven by a 5% retail segment comp and a 20% increase in wholesale segment revenues.
- Anthropologie achieved an 8th consecutive quarter of double-digit operating income growth, with a 6% retail segment comp.
- URBN's gross profit dollars increased by 9% to $497 million, with a gross profit rate improvement of 105 basis points to 36.5%.
- Urban Outfitters brand experienced a 9% decline in the retail segment comp, primarily due to disappointing performance in North America.
- SG&A expenses increased by 7%, slightly outpacing the rate of sales growth, driven by increased marketing spend.
- Free People recorded higher merchandise markdowns compared to the previous year, although the prior year's rate was exceptionally low.
- Despite improvements, Urban Outfitters is still facing challenges in returning to profitability, with a focus on driving top-line sales gains.
- Nuuly, while profitable, is not yet cash flow positive due to the need to purchase inventory ahead of future subscriber growth.
Good day, and welcome to the Urban Outfitters Inc., third quarter fiscal 2025 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker, Ms. Oona McCullough, Executive Director of Investor Relations. Please go ahead.
Good afternoon, and welcome to the URBN third quarter fiscal 2025 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three- and nine-month period ending October 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. For more detailed commentary on our quarterly performance in
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