Urban Outfitters (URBN) Q2 2027 earnings summary

Executive summary

• Achieved record Q2 sales and profits, with net sales up 10.4% to $1.66B–$1.7B, marking the eighth consecutive quarter of record results, driven by strong growth across Retail, Wholesale, and Subscription segments.

• Adjusted net income was $149M and adjusted EPS $1.72, while reported net income was $240.7M and EPS $2.78, reflecting a one-time $100.1M tariff refund.

• All retail brands posted positive comps; Wholesale and Subscription segments delivered double-digit growth, with Nuuly surpassing 500,000 active subscribers and 29–30% revenue growth.

• Growth was supported by digital channel expansion, new store openings, and investments in AI and technology.

Financial highlights

• Net sales grew 10.4% year-over-year to $1.66B; operating income reached $193M (adjusted) and $288.7M (reported), with adjusted EPS of $1.72 and reported EPS of $2.78.

• Gross profit margin was 43.4% (reported, including tariff refund) and 37.7% (adjusted); gross profit dollars increased 11%.

• SG&A expenses rose 10%, in line with sales, driven by marketing, payroll, and technology investments; SG&A as % of sales remained flat at 26%.

• Cash and equivalents at quarter-end were $598.8M, with total liquidity (including marketable securities) at $945.5M.

• Inventory increased 11.8% year-over-year to $778.5M, reflecting higher sales and timing of receipts.

Outlook and guidance

• Q3 sales expected to grow high single digits; retail comps mid-single digits, led by FP Group (high single), Urban Outfitters (mid-single), Anthropologie (low to mid-single).

• Nuuly projected to deliver high 20s revenue growth in Q3; wholesale segment to grow low teens.

• Full-year FY'27 sales growth expected in high single digits, with gross margin up ~25 bps year-over-year.

• FY'27 capex planned at $475M, with 54 new stores (mainly FP Movement) and 18 closures.

• Effective adjusted tax rate planned at 24.75% for Q3 and full year.