Urban Outfitters (URBN) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 net sales of $1.35B, up 6.3% year-over-year, with net income of $117.5M ($1.24 per diluted share), driven by strong growth in Nuuly (+62.6%), Wholesale (+15.1%), and Retail (+3.1%) segments.

• Four out of five brands delivered record Q2 operating profits, with Free People and Anthropologie posting high single-digit comp growth, while Urban Outfitters saw a high single-digit comp decline.

• Nuuly segment delivered robust double-digit revenue growth, with a 55% increase in average active subscribers and a new fulfillment center supporting expansion.

• Gross profit margin improved to 36.5% (up 68 bps), and operating income rose 10% to $145M (10.7% margin).

• For the six months ended July 31, 2024, net income was $179.3M and EPS was $1.89, with total net sales up 7.0% to $2.55B.

Financial highlights

• SG&A expenses rose 7.6–8% and deleveraged by 32 bps to 25.8% of sales, mainly due to higher marketing and payroll costs.

• Cash and marketable securities totaled $771M as of July 31, 2024, with no outstanding borrowings on the $350M credit facility.

• Inventory increased 3.1% year-over-year to $605M, with Nuuly rental product inventory up 62%.

• Diluted share count was 94.7M in Q2.

• Net cash provided by operating activities was $163.8M for the six months ended July 31, 2024.

Outlook and guidance

• Plans to open approximately 57 new company-owned retail locations in FY25, with capital expenditures expected to be $210M.

• Q3 sales expected to grow mid-single digits, with low single-digit retail comp growth and low teens wholesale growth; Nuuly segment sales projected to grow mid-double digits.

• Q3 gross margin rate expected to decline by ~100 bps due to higher markdowns; full-year gross margin improvement of 50–100 bps targeted.

• SG&A growth for Q3 planned in the mid-single digits, driven by higher marketing expense.

• Inventory levels in Q3 expected to grow in line with sales; Q4 inventory to be planned more conservatively.