PHILADELPHIA, PA — Urban Outfitters (Nasdaq: URBN) reported record first-quarter profit and sales growth as strong performance at its Free People and Urban Outfitters brands, along with rapid expansion in its subscription rental business, helped offset tariff-related merchandise cost pressure and rising operating expenses.
Net income for the quarter ended April 30 rose to a record $115.7 million, with diluted earnings per share reaching $1.30.
Total company net sales increased 11.4% to a record $1.48 billion. Comparable retail segment sales rose 5.6%, driven by high single-digit growth in digital sales and mid single-digit growth at physical stores.
The strongest comparable retail gains came from FP Group, which includes Free People and FP Movement, where comparable sales increased 9.8%. Comparable sales at Urban Outfitters stores rose 9.3%, while Anthropologie posted a 1.9% increase.
Subscription segment revenue climbed 34.5%, primarily due to growth in active subscribers at Nuuly, the company’s apparel rental business.
Wholesale segment sales increased 24.8%, supported by stronger FP Group wholesale demand from specialty retail customers.
Chief Executive Officer Richard A. Hayne attributed the quarter’s performance to sustained consumer demand across brands and continued growth in wholesale and subscription operations.
“Our customers remain engaged and are responding to compelling fashion trends,” Hayne stated.
Despite the revenue gains, gross margin pressure persisted. Gross profit margin declined 16 basis points from the prior-year quarter, partially due to tariff-related merchandise cost deleverage and the absence of a non-recurring gain recorded a year earlier.
Selling, general, and administrative expenses increased 11.7% to support higher marketing spending, customer acquisition efforts, store payroll growth, and technology investments tied to artificial intelligence initiatives.
The company also increased inventory levels ahead of potential shipping disruptions linked to conflict in the Middle East. Total inventory rose 9.5% year over year, while wholesale inventory declined 1.2%.
Urban Outfitters repurchased approximately 4.6 million shares during the quarter for about $300 million under its existing stock repurchase authorization. As of April 30, 10 million shares remained available for repurchase under the program.
The retailer operates brands including Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly across North America and Europe.
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