Urban Outfitters’ second quarter saw growth above Wall Street’s expectations, with management highlighting strong performance across all brands and geographies. Executives pointed to double-digit sales increases at four out of five brands, a notable surge in the Nuuly rental subscription business, and the successful expansion of owned brands at Anthropologie and Free People. CEO Dick Hayne credited the turnaround of the Urban Outfitters brand in North America and Europe, stating, “The Urban Outfitters brand is now clearly trending up globally and regaining its mantle as a preferred destination for young adults.” Operational discipline, reduced markdowns, and increased traffic and transactions were key drivers of the quarter’s results.
Is now the time to buy URBN? Find out in our full research report (it’s free).
Urban Outfitters (URBN) Q2 CY2025 Highlights:
- Revenue: $1.50 billion vs analyst estimates of $1.48 billion (11.3% year-on-year growth, 1.9% beat)
- Adjusted EPS: $1.58 vs analyst estimates of $1.48 (6.9% beat)
- Adjusted EBITDA: $206.3 million vs analyst estimates of $204.9 million (13.7% margin, 0.7% beat)
- Operating Margin: 11.6%, in line with the same quarter last year
- Locations: 756 at quarter end, up from 716 in the same quarter last year
- Same-Store Sales rose 5.6% year on year (2% in the same quarter last year)
- Market Capitalization: $6.06 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Urban Outfitters’s Q2 Earnings Call
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Paul Lejuez (Citi) asked about the gross versus net tariff impact and the balance between pricing actions and promotional reductions. COO Frank Conforti explained that price increases are a last resort, with most mitigation focused on vendor negotiations, supply chain shifts, and transportation changes.
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Lorraine Hutchinson (Bank of America) questioned how price increases would be implemented across brands and at what price points. Anthropologie CEO Tricia Smith and others clarified that only select higher-value products would see price hikes, while opening price points are protected.
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Adrienne Yih (Barclays) inquired about denim trends and the timing of tariff impacts. CEO Dick Hayne and COO Frank Conforti noted the continued popularity of full-leg silhouettes and confirmed that higher tariffs, including those on Indian imports, will affect the fourth quarter and carry into next year.
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Matthew Boss (JPMorgan) asked about global consumer health and additional growth opportunities at Urban Outfitters. CEO Dick Hayne and Urban North America President Shay Jensen highlighted strong store and online traffic, higher conversion, and ongoing strategy execution for sequential improvement.
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Dana Telsey (Telsey Advisory Group) sought clarification on SG&A expense trends and the real estate strategy, particularly around new Maeve stores. CFO Melanie Marein-Efron detailed the near-term marketing spend pattern, while Tricia Smith described plans for a three-to-four store test of the Maeve concept.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace of Nuuly subscriber growth and the impact of expanded logistics capacity, (2) execution on new store openings and remodels, especially for FP Movement and the Maeve brand, and (3) the effectiveness of tariff mitigation strategies on gross margin. Additional focus will be placed on marketing ROI and the evolution of proprietary product performance across Anthropologie and Urban Outfitters.
Urban Outfitters currently trades at $68, down from $78.14 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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