Urban Outfitters Inc. reported a mixed second-quarter performance on Wednesday, with revenue growth outpacing analyst expectations while earnings per share fell short of forecasts.
The Philadelphia-based retailer posted adjusted earnings of $1.72 per share for the three months ended July 31, missing the consensus estimate of $1.73 by one cent. Revenue rose 10.4% year-over-year to a record $1.66 billion, exceeding the $1.65 billion consensus. Shares fell 4% in extended trading after the release, though the stock had closed the regular session 9.46% higher.
Gross profit margin edged up by 4 basis points to 37.7%, while selling, general and administrative expenses remained flat at 26.0% of sales. Total inventory increased 11.8% from the prior year, with retail segment comparable inventory up 8.4%. The company operated 801 stores as of July 31, a net increase of 17 locations since the start of the fiscal year.
Comparable sales across the retail segment rose 6.2%, driven by high single-digit growth in digital channels and mid single-digit gains in stores. Brand performance varied: FP Group led with a 10% comparable sales increase, followed by Urban Outfitters at 8.4% and Anthropologie at 3.0%. The Nuuly subscription segment grew revenue by 28.6%, while wholesale sales climbed 18.6%.
CEO Richard A. Hayne highlighted record adjusted profits and eight consecutive quarters of record sales and profits, citing strong customer response to fashion assortments. However, the earnings miss was attributed to increased markdowns at Anthropologie and higher costs from tariffs and freight fuel surcharges, which offset gains in store occupancy and delivery expenses.
The company also repurchased 4.6 million shares for approximately $300 million over the past six months, supporting its capital return strategy amid the mixed financial backdrop.
