Urban Outfitters reports strong Q4 as comps jump 9.6% at namesake brand
Urban Outfitters Inc. delivered record fourth-quarter revenue, fueled by a strong performance at its namesake brand and Nuuly rental subscription service.
The retailer, whose portfolio also includes the Free People and Anthropolgie chains, notched quarterly comparable sales gains across all its divisions. But the biggest gain — 9.6%— was at the formerly struggling Urban Outfitters, where a 2024 turnaround initiative includes moving to a broader, less “alternative” positioning more in tune with Gen Z style preferences.
[READ MORE: First Look: Urban Outfitters unveils Gen Z-friendly store format]
On the earnings call, executives said the company plans to open 57 new stores in its current fiscal year, including at least 21 FP Movement locations. (FP Movement is the fast-growing activewear line from Free People.)
During the past year, the retailer opened 69 stores, including: 43 Free People stores (includes 25 FP Movement stores), 16 Anthropologie stores and 10 Urban Outfitters stores.
Fourth Quarter
The company reported net income of $96.3 million and earnings per share were $1.05 for the quarter ended Jan. 31. Adjusted net increased by 33% to $131 million or $1.43 per share, topping analysts estimates of 41.26 per share. Operating income increased by 27% to $159 million.
Total company net sales increased 10.1% to a record $1.80 billion, just ahead of estimates of $1.79 billion. Total retail segment net sales increased 7.7%, with comparable net sales increasing 5.5%.
By division, comparable retail net sales increased 9.6% at Urban Outfitters, 5.2% at Free People and 3.7% at Anthropologie.
Subscription segment (Nuuly) net sales increased 42.6% primarily driven by a 40.3% increase in average active subscribers in the current quarter versus the prior year quarter.
"We see strong subscriber growth and remain confident in the large addressable market for apparel rental," David Hayne, president of Nuuly, said on the earnings call. "We aim to continue scaling the business to $1 billion in revenue."
Wholesale segment net sales increased 9.1% driven by a 10.2% increase in Free People wholesale sales due to an increase in sales to specialty customers.
“We are pleased to report record sales and operating profits for the quarter, driven by strong results across all three segments — retail, subscription, and wholesale,” said Richard A. Hayne, CEO. “Our Nuuly apparel rental business continues to enjoy exceptional momentum with double-digit subscriber and revenue growth.”
Full Year
For the full year, total company net sales increased 11.1% to a record $6.17 billion. Total retail segment net sales increased 7.9%, with comparable retail net sales increasing 6.0%. Comparable retail segment sales increased 7.3% at Urban Outfitters, 5.9% at Anthropologie and 4.8% at Free People.
The retailer ended the year with a total of 733 company-owned stores.
