Urban Outfitters, Inc., parent to the Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly brands, reported total company net sales for the fourth quarter ended January 31 increased 7.3 percent to a record $1.49 billion. Total company-adjusted net sales increased 8.0 percent to a record $1.50 billion for the quarter.

Total Retail segment net sales increased 6.2 percent, with comparable Retail segment net sales increasing 4.9 percent. The increase in Retail segment comparable net sales was driven by high-single-digit positive growth in digital channel sales and low-single-digit positive growth in retail store sales.

  • Comparable Retail segment net sales increased 18.9 percent at Free People and 12.0 percent at Anthropologie and decreased 13.6 percent at Urban Outfitters.

Wholesale segment net sales increased 3.3 percent, reportedly driven by a 7.8 percent increase in Free People wholesale sales primarily due to an increase in sales to department stores, partially offset by a $1.9 million decrease in Urban Outfitters wholesale sales.

Nuuly segment net sales increased by $20.3 million. Nuuly segment adjusted net sales increased by $29.4 million. The Nuuly segment adjusted net sales increase was said to be primarily driven by a 56 percent increase in average active subscribers in the current quarter versus the prior-year quarter.

Fiscal first-quarter gross margin increased by 232 basis points compared to the prior-year corresponding quarter, and gross profit dollars increased 16.6 percent to $434.2 million from $372.3 million in the prior-year period.

Fiscal first-quarter adjusted gross margin increased by 293 basis points compared to the prior-year corresponding quarter, and adjusted gross profit dollars increased 19.6 percent to $451.8 million from $377.8 million. The increase in adjusted gross profit rate was said to be primarily due to higher initial merchandise markups primarily driven by lower inbound transportation costs. The increase in adjusted gross profit dollars was reportedly due to the improved adjusted gross profit rate and higher adjusted net sales.

Fiscal first quarter selling, general and administrative (SG&A) expenses increased by $35.4 million, or 10.6 percent, compared to the the prior-year corresponding quarter. SG&A expenses deleveraged 73 basis points and expressed as a percentage of adjusted net sales deleveraged 58 basis points compared to the prior-year corresponding quarter.

The company’s effective tax rate fiscal first quarter was 25.4 percent, compared to 23.6 percent in the the prior-year corresponding quarter. The company’s adjusted effective tax rate fiscal first quarter was 25.4 percent, compared to 23.2 percent in the the prior-year corresponding quarter.

Fiscal first-quarter net income was $47.8 million, or 50 cents per diluted share. First quarter adjusted net income was $65.7 million, or 69 cents per diluted share, which excludes store impairment and lease abandonment charges, an asset impairment charge and a change in revenue recognition method for Nuuly.

As of January 31, 2024, total inventory decreased by $37.3 million, or 6.3 percent, compared to total inventory as of January 31, 2023. Total Retail segment inventory decreased by 4.6 percent, with Retail segment comparable inventory decreasing by 1.9 percent. Wholesale segment inventory decreased by 22.0 percent due to improved inventory control.

Image courtesy Urban Outfitters/Nuuly