Urban Outfitters (URBN) 27th Annual ICR Conference 2025 summary

Holiday performance and sales trends

• Achieved 10% total sales growth for the holiday period, with 6% retail segment comp and 7% total retail segment growth, driven by both digital and store channels.

• Nuuly rental business grew 55% in top line, with a 53% increase in subscribers; wholesale up 29%, led by Free People.

• Anthropologie retail segment comp up 10%, Free People up 9%, while Urban Outfitters was down 4% but showed significant improvement.

• Urban Outfitters North America saw positive regular price sales for the first time in years, reflecting successful margin recovery and reduced markdowns.

• Inventory growth expected to align with sales growth, maintaining disciplined inventory management.

Brand strategies and consumer trends

• Anthropologie focused on customer acquisition, digital marketing, and modernizing product assortment, resulting in 15 consecutive quarters of comp sales growth.

• Free People and FP Movement delivered strong results, with FP Movement achieving a 23% comp and plans to open 25 new stores, aiming for $1 billion in sales.

• Urban Outfitters is in the midst of a turnaround, prioritizing margin recapture and new customer growth, especially in digital.

• Nuuly is on track for its first profitable year, with improved logistics and automation supporting future profitability.

• All brands are leveraging AI and digital product creation to enhance speed, creativity, and efficiency.

Margin, sourcing, and operational outlook

• Gross profit improved by 100 basis points in Q4, with further improvement expected, especially from Urban Outfitters as markdown rates decline.

• Sourcing diversification has reduced China exposure to about 5% for own-brand products, providing flexibility against tariff risks.

• Dual sourcing and strategic factory partnerships have strengthened supply chain resilience and diversity.

• Free People and Anthropologie are modeled for mid-teens operating profit rates, with Free People consistently delivering at high teens.

• Nuuly's profitability is expected to grow, targeting 10% operating profit and a $1 billion top line in the coming years.