It has been about a month since the last earnings report for Urban Outfitters (NASDAQ: URBN). Shares have added about 0% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Urban Outfitters due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Urban Outfitters Q2 Earnings Top Estimates, Retail Sales Up Y/Y
Urban Outfitters reported impressive results for second-quarter fiscal 2025, wherein the bottom and top lines surpassed the Zacks Consensus Estimate. Also, both metrics improved from the prior-year quarter.
URBN's Q2 Performance
This lifestyle specialty retailer delivered earnings per share of $1.24, surpassing the Zacks Consensus Estimate of 98 cents. Also, the bottom line increased 12.7% from the comparable quarter of the prior fiscal year.
Total net sales increased 6.3% year over year to $1,351.9 million, surpassing the consensus estimate of $1,338 million.
Total net sales in the Retail segment rose 3.1%, with comparable net sales in this segment increasing 2%. This growth was primarily fueled by low single-digit positive gains in both digital channel sales and sales from retail stores. Specifically, comparable Retail net sales rose 7.1% at Free People and 6.7% at Anthropologie but fell 9.3% at Urban Outfitters.
In the Wholesale segment, net sales grew 15.1% year over year, primarily due to a 17.5% rise in Free People's wholesale sales, which was attributed to increased sales to department stores and specialty customers. This was, however, somewhat offset by a decline in Urban Outfitters' wholesale sales.
The Nuuly segment saw a significant 62.6% increase in net sales mainly due to a 55% rise in average active subscribers from the prior-year quarter.
Margin Insights of URBN
Gross profit rose 8.3% from the prior-year quarter to $493.3 million. Also, the gross margin expanded 68 basis points (bps) to 36.5%, mainly owing to higher initial merchandise markups across all brands primarily due to the company's cross-functional initiatives. This increase was somewhat mitigated by higher Retail segment merchandise markdowns, particularly ...
