PHILADELPHIA, PA — Urban Outfitters, Inc. (NASDAQ: URBN) reported record earnings for its fiscal second quarter, with net income climbing to $143.9 million, or $1.58 per diluted share, on the back of double-digit sales growth across its major brands.
Strong Revenue Growth Across Segments
For the three months ended July 31, 2025, total company net sales rose 11.3% year over year to $1.5 billion, the highest quarterly sales in its history. Comparable retail sales increased 5.6%, with Free People leading at 6.7% growth, followed by Anthropologie at 5.7% and Urban Outfitters at 4.2%. Gains came from both in-store and digital channels, each delivering mid-single-digit growth.
The company’s subscription business saw a 53.2% jump in sales, fueled by a nearly 50% increase in active subscribers. Wholesale revenue rose 18.1%, driven by strong specialty sales from Free People.
For the first half of fiscal 2026, sales reached $2.83 billion, up 11% from the prior year, with positive comparable results across all brands and geographies.
Margins Improve, Profits Climb
Gross profit for the quarter rose 14.8% to $566.2 million, with the margin rate improving 113 basis points. The gains were attributed to lower markdowns at Urban Outfitters and stronger leverage on occupancy costs.
Operating expenses increased 12.5% to $392.1 million, largely due to higher marketing outlays and payroll to support sales growth. Still, operating income expanded on the back of stronger revenue and improved merchandise margins.
For the six-month period, gross profit reached $1.06 billion, up 17% from a year earlier, as margins benefited from reduced markdowns and one-time cost adjustments.
CEO Highlights Broad-Based Success
Chief Executive Officer Richard A. Hayne praised the company’s performance, noting that “all five brands achieved positive comparable sales across all geographies.” He said the results reflected both the strength of its brands and the effectiveness of its growth strategy.
Store Expansion and Share Repurchases
Urban Outfitters continued to expand its footprint, opening 27 new stores in the first half of the year, including 19 Free People locations (10 of which were FP Movement stores), four Anthropologie stores, and four Urban Outfitters outlets. Four underperforming stores were closed during the same period.
The company also repurchased 3.3 million shares for $152 million under its ongoing buyback program, leaving 14.7 million shares available for repurchase as of July 31, 2025.
Outlook
With momentum across retail, subscription, and wholesale channels, Urban Outfitters enters the second half of the year with record-setting financial strength. Lower markdowns, rising digital engagement, and continued store growth suggest the company is positioned to maintain profitability despite higher marketing and payroll expenses.
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