Urban Outfitters notches record quarter; to open 54 stores this year
Urban Outfitters Inc. reported record first-quarter earnings and sales, with increases across all its divisions.
The apparel retailer’s earnings and revenue topped expectations, with especially strong performances from its wholesale and subscription segments, and its FP Group business, which is made up of Free People and activewear brandFP Movement.
“Both Free People and FP Movement delivered an exceptional strong quarter, including record-low markdown rates," Sheila Harrington, global CEO of the company’s namesake brand and FP Group, said on the earnings call.
Harrington added that Free People and FP Movement are now being managed as two two independent ecosystems, “each serving genuinely different market opportunities,” rather than as parent and sub brand.
“This evolution is not a sudden shift, but a deliberate and strategic transition,” she said. “We are moving thoughtfully to ensure we maximize what is best for both brands not just from a top line perspective, but through the lens of disciplined expense management, and intellectual leverage.”
Urban Outfitters plans to open approximately 54 new stores and close approximately 19 stores during its current year.
“Our net new store growth is primarily being driven by growth in FP movement Free People, and Anthropologie stores,” CFO Melanie Marein-Efron told analysts on the call.
The lineup includes 21 FP Movement stores 12 Free People stores, 13 Anthropologie stores, and eight Urban Outfitters stores.
First Quarter
The company reported that its profit totaled $115.7 million, or $1.30 a share, for the quarter ended April 30, compared with $108.3 million, or $1.16 a share, in the year-ago period. Analysts has expected earnings of $1.14 a share.
Revenue climbed 11.4% to a record $1.48 billion, topping analysts estimates of $1.46 billion. Total retail segment net sales increased 8.0%.
Comparable retail segment net sales rose 5.6%, with the increase driven by high single-digit positive growth in digital channel sales and mid single-digit positive growth in store sales. By division, comparable retail sales increased 9.8% at FP Group, 9.3% at Urban Outfitters and 1.9% at Anthropologie.
Total revenue at Nuuly, the company’s apparel subscription rental service business, increased 34.5%, primarily driven by a 33.3% increase in average active subscribers. The company’s wholesale segment net sales increased 24.8% driven by a 26.2% increase in FP Group wholesale sales due to an increase in sales to specialty customers.
On the earnings call, CEO Richard A. Hayne cited the “underlying health of the business.”
“Free People and FP Movement are performing with genuine distinction,” he told analysts. “Urban Outfitters is on a clear and meaningful path forward in North America and is already excelling in Europe. Anthropology showed real resilience turning a slow Q1 into a positive comp as well received products hit the shelves in March and April."
“Nuuly continues to scale with impressive speed, well on its way to the magic $1 billion goal,” he continued. “And our wholesale business is delivering outstanding top and bottom line results.”
[READ MORE: Urban Outfitters launches creator campaign; partners with Zara Larsson]
Urban Outfitters ended the quarter with 801 stores, including 792 company-owned.
