The company reported a significant rise in net income for Q3 of fiscal year 2025 (FY25) ending 31 October 2024, marking a 23.9% increase year-over-year to $102.91m from $83.01m in the same period of FY24.
Positive results for Urban Outfitters in Q3 FY25
The retailer's earnings per diluted share also saw an uptick, rising from $0.88 in the third quarter of the previous fiscal year to $1.10 in Q3 FY25.
This growth is attributed to a 6.3% increase in total company net sales to a record $1.36bn compared to $1.28bn in the same period last year.
Urban Outfitters co president and COO Frank Conforti said in the earnings call that four of its five “brands continued to perform remarkably well”.
The company’s retail segment experienced a 3.2% rise in net sales, with comparable retail segment net sales growing by 1.5%. This was propelled by positive growth in both digital channel and retail store sales. Notably, Anthropologie and Free People saw comparable retail segment net sales jump by 5.8% and 5.3%, respectively, while Urban Outfitters experienced an 8.9% decline.
Urban Outfitters' Nuuly segment reported a remarkable 48.4% surge in net sales, primarily due to a 51% increase in average active subscribers.
The Wholesale segment also performed well with net sales climbing by 17.4%, led by a significant 20.3% rise in Free People wholesale sales.
The company's gross profit rate improved by 105 basis points over the quarter, compared to the same period the previous year.
However, selling, general and administrative expenses rose by $23.2m or 6.7%, slightly deleveraging as a percentage of net sales by 11 basis points.
Urban Outfitters expands footprint with new stores over 9M FY25
Over the nine months ending on 31 October 2024, Urban Outfitters' net income reached $282.2m or $2.99 per diluted share, with net sales increasing by 6.7% to a record $3.91bn.
The retail segment's comparable net sales were up by 2.6%, driven by mid-single-digit growth in digital channel sales and low single-digit growth in retail store sales.
Gross profit rate for the first three quarters increased by 80 basis points compared to the nine months ended 31 October 2023.
During this nine-month period, the company expanded its footprint by opening a total of 36 new retail locations including seven Urban Outfitters stores and nine Anthropologie stores. It shuttered 11 stores across its various brands.
Urban Outfitters CEO Richard Hayne said: “We are pleased to announce record third quarter sales and earnings, both of which exceeded our expectations. These results were driven by outperformance across all three business segments – retail, subscription and wholesale.
“Additionally, we're optimistic about the outlook for holiday demand and believe total comparable sales could be similar to our third quarter results.”
Frank noted the company expects total sales growth in Q4 to be in line with Q3, driven by a modest increase in retail segment comps, solid revenue growth from Nuuly, and ongoing double-digit sales growth in the wholesale segment.
