Urban Outfitters, Inc., which operates a portfolio of global consumer brands, including the Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly brands, reported that total company net sales for the three months ended July 31 increased 6.3 percent to a record $1.35 billion.
Total Retail segment net sales increased 3.1 percent, with comparable Retail segment net sales increasing 2.0 percent. The increase in Retail segment comparable net sales was driven by low single-digit positive growth in digital channel and retail store sales.
Comparable Retail segment net sales increased 7.1 percent at Free People and 6.7 percent at Anthropologie and decreased 9.3 percent at Urban Outfitters. Nuuly segment net sales increased by 62.6 percent primarily driven by a 55 percent increase in average active subscribers in the current quarter versus the prior year quarter.
Wholesale segment net sales increased 15.1 percent, driven by a 17.5 percent increase in Free People wholesale sales due to increased sales to department stores and specialty customers, partially offset by a decrease in Urban Outfitters wholesale sales.
Net sales by Brand and Segment
“We are pleased to report record second-quarter sales fueled by strength across all three segments – Retail, Nuuly and Wholesale,” said Richard A. Hayne, CEO of Urban Outfitters, Inc. “Equally impressive, four of our five brands delivered record operating profits during the second quarter.”
Fiscal second quarter consolidated gross margin increased by 68 basis points year-over-year. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments mainly driven by company cross-functional initiatives, partially offset by higher Retail segment merchandise markdowns, primarily at the Urban Outfitters brand.
Gross profit dollars increased 8.3 percent to $493.3 million from $455.6 million in the three months ended July 31, 2023. The increase was due to higher net sales and an improved gross profit rate.
Second quarter selling, general and administrative (SGB&A) expenses increased by $24.7 million, or 7.6 percent, compared to the year-ago Q2 period, and deleveraged 32 basis points when expressed as a percentage of net sales. The dollar growth in SG&A expenses for the period was primarily related to increased marketing expenses to support customer traffic growth and increased sales in the Retail and Nuuly segments and increased store payroll expenses to support the Retail segment stores comparable sales growth.
Net income for the second quarter amounted to $117.5 million, or $1.24 per diluted share.
As of July 31, 2024, total inventory increased by $18.2 million, or 3.1 percent, year-over-year, compared to total inventory as of July 31, 2023. Total Retail segment inventory increased 3.1 percent, while Retail segment comparable inventory decreased by 1.3 percent. Wholesale segment inventory increased by 3.5 percent.
During the six months ended July 31, the company opened 19 new retail locations, including 9 Free People stores (including 7 FP Movement stores), 5 Urban Outfitters stores and 5 Anthropologie stores. The company and closed 9 retail locations, including 4 Urban Outfitters stores, 3 Anthropologie stores and 2 Free People stores.
Image and data tables courtesy Urban Outfitters, Inc.
