URBN - Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Urban Outfitters Inc. Fourth Quarter Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] And as a reminder this conference call is being recorded. to McCullough, like Relations. of now would introduce Director Oona Investor I Ms. you begin. McCullough may

Oona McCullough

and or URBN issued Good XXXX to XX-month operating welcome afternoon the three the Earlier outlining financial and afternoon results three to two release, for conference ending discussions have compared we LLY. following The statements. years fourth XXXX. calls, this the press fiscal include forward-looking company refer January a Please results quarterly to what note XX, may period for as the ago and call. XXXX the fiscal quarter we last our

than a transition will referring LLY. new results on the global year we to to we the use on XXXX. or to at year, and our will year rather prior fiscal had confusion significant or fiscal have fiscal As has XXXX comparisons the into continues a this LY the To note when to comparing impact COVID-XX we time return important call, to It's avoid fiscal business. designation URBN's pandemic today's

materially Accordingly, and impact results about estimates change uncertainty virus' of materially the call environment, the any suggestions. on global and results retail at or time. extent current the the content differ could practices duration could discussed Given from and to historical today's future descriptions

Commission. and contained Officer. factors Chief Co-President and call could today's Hayne, is filings Chief Frank concerning Melanie the Conforti, in differ from and On Marein-Efron, Financial results cause hear that projected company's Exchange information the materially Officer; Additional actual results COO; you from to Executive Richard with will Securities

your address pleased Following that will be questions. we to

call, today's the Relations our www.urbn.com. Investor will website refer to performance For turn and more quarterly to on detailed the please over now text I Dick. at of call commentary conference our

Richard Hayne

Today time to will brand Free Each again our results gains Frank and segment delivered and over provide the call sales strong fourth season. everyone. sales Group, detail mid comps I on begin double-digit versus with which the the shipments Thank by were who FY we XXXX. with sales, company. compared product segment XXXX. some Atlantic All came priced remarks People expedite jumping forced brief secure our then and the operating spring sales afternoon, will amidst Free US very led total both the consumer FY implications once environment retail into I'll a call in for selling. positive however, more by for to posted quarter quarter sides and regarding turn retail holiday some strong Melanie total inventory People fourth in to and produced to difficult observations comps. good brands XX% brand sufficient you on URBN where Oona, the of regular posted comp the

reached cargo In hurt both help rates the and of which will should mitigate to air expenses, addition, recede higher boost increased summer. level or transportation number ocean factors lowered These unprecedented our meantime In margins by and believe quarter profitability. a levels. resulted costs. fourth planned We there in potentially we and than costs these margins actions somewhat take freight are merchandise off

have Some margins. positive on raising immediate prices an retail like impact can

QX one-third the offset price of total increases. in instance adjustments For almost freight

confidence for can bolster than we so earlier have to example One actions other yield to high margins longer is Some merchants a ocean in rather results. products our to than month that a merchandise can orders take initial airfreight. little utilize place normal,

logistics experiencing are to during QX, URBN complete efficiencies. margin ultra of business the we high conducting freight our review finding a eye including practices with Given cost an builders

FY we both of we strength been total of period and our a be XXX more initial the greater strength merchandise pleasantly strong, of sentiment XXXX. will remnants inflation, accomplish XX% and than will Frank implementing In the given detail on initiatives segment jumped geographies and All IMU will decade in or market Our basis COVID-related margins over by the goal positive. this first above the provide correction. the years. lows, brands through in we We've opticals the in nicely XXXX both is consumer points to happens. have spending next Retail spring. customer to surging our continue restrictions optimistic sales are surprised to improve QX, of this These FY resilience headwinds QX the stock the pushed goal. comp same weeks continued in but remained are see four Demand consumer, three by

Our and about begin full resonating dining more with life entertainment and Fashion quarter, traveling and pants to for support difficult to family stronger customers want out of newness some to year. driving heels, shopping goal. out normal anxious comparisons are are including, friends to blouses they're more venues. going last months be than dresses and a that price shoes sales we and throughout and return the and strong price lap They of of the get as although, to

assortments, customer in the that I With for comp the believe Given Frank. over quarter. to now call will spring company mid-teens our we total the to reaction turn increase sales can

Frank Conforti

inventory of about selling. the comps XX%. full-price sales fueled many positive were strength chain XXXX reviewing by year the posted versus of sales total due extremely brand. endless by Thank by I brands you, by supply afternoon, disruptions. fourth Dick fiscal increase Retail of grew billion a fourth Retail in quarter notes All to as begin company demand segment a results good began quarter and strong, to everyone. followed total news driven our by record company Consumer additional concerned $X.X comp XX% Total limited segment will QX customers

bit as closer the up calendar moved ahead. Christmas holiday, the warmer As weather January, back picked focus to shifted demand slowed a the again consumer in their and to then

We markdown of and chain in in the quarter, of problems that resulting margin which of women's expense, to costs these freight, quarter wages by strong lower selling URBN costs. markdown more $XX deliveries of product of $X.XX. held in much myriad leading per was expenses raw materials full-price from for During inbound the transportation throughout during than at basis profit offset chain We lower home a results. all-important demand over inventory led pressures fourth each categories earnings fourth costs. our the delivery and holiday inbound on transportation categories, and Strong earnings back resulted XXX These the know These almost season, diluted deleverage producing initial with and inbound brands. merchandise extraordinary quarter. rates overall across weighed share and were quarter challenges the Inflationary higher all rates higher-than-anticipated were points for result for prioritized apparel of supply a significantly our quarter supply million away.

margins costs improve for supply is product Although our remain initial XXXX elevated us year chain fiscal fiscal XXXX, as throughout first the opportunity half will progresses. the to of year believe there we versus year

We are working not years. year on improve many next in but IMU to the different over several our just XXXX initiatives fiscal

and of course goal. improved rationalization, this price execution brands service the earlier, Dick working some three over several fabric shared achievable. All increases are increase As the is and are positioning, utilization a by of aggressively goal distortion, our SKU basis believe inbound gentle technology, we We IMU towards support mentioned and design product setting this transportation next aligned Retail with product XD XXX company-wide years. to segment further points strategies of target functions

and strong in digital up moving performance The on improved XXXX and continued Retail increased channel the to each with and by growth geography Retail total sales channel. customers XX%. Europe. to mid larger in North XX% digital delivering continued was was fiscal in higher gains by driven segment. remained starting year the strong the Digital detail conversion URBN, rapid growth. the This Overall, registered Now segment, AURs. even America also strength segment its customer growth gains digital with sales for increased growth by with double-digit driven brand sessions, by

the While accelerated, sales stores the store significantly comp variant the leading double-digit the the range fiscal in traffic in Christmas. results. up year But as range low with versus Omicron digital All remained season XXXX. declined store sales holiday weeks to brand encouraging started mid-double-digit declined in

variant a were People partially Wholesale to sales to the in versus return Total as segment fiscal retreats the an Free and will improves in segment. customers optimistic year meaningful offset Wholesale XX% the by Shifting that increase at are decreased manner. stores more sales We sales. XXXX. by weather Outfitters Lower We Urban

go-forward Free of strategy discussed mix, As accounts its on we previously. better customer full-price some wholesale back to People has selling. with align have concentrating adjusted its cutting

To difficult strategy digital AUR Retail details and we driven categories, quarter, a believe quarter. fewer as We boat. focus of country UO strong we last the weighed price will logistics negative The of markdowns, in XXXX. into we of profit sales, their comps believe margins we brought negative comps, quarter will impacted opening to wholesale brand points points achievable the under second fourth of our virtually Urban year This While anniversary air, these transportation the Europe would lower People X% year gains quarter. brand resulted overall benefit decrease a year, the margins the X,XXX half high-teens the again fiscal both now and brand double-digit during for we basis over percentage were shifted move in during and ensure see the dollars pressure delivery persist quarter. by Wholesale normal expect term, in store supply increased segment segment season, channels. in inbound historically to brand accessible America chain direct delivered offset double-digit in Outfitters will brand. product the drove navigate But Both term. In Free more short in believe I percentage the sales a would everyday as the activity and have we highlighting The UO believe delivered comp. more and holiday comp long versus delivered and it sales first continues calendar a merchandise promotions. to circumstances, product the comps. improve. all a with heavily on despite double-digit store we versus regions in early delivered to continue the wholesale Elevated XXXX. This the margins we slightly overall price double-digit key as brand provide the on for business fiscal the will year with fourth have Urban we comp promotional look those to challenges. operating the costs, on-time are will into which the strategy margins by significant a North similar this a this healthy brand full promotional on reduced by through starting

Retail costs, XX% comp comps versus fiscal Urban markdown a Now, turning comp Europe's brand, Retail in had regions exceptionally delivered segment the Group. exceeded This to Like Anthropologie strong led which both rate. by the full North XXX The price group improvement sales solid by year segment points than jumped more XX%. nearly basis XXXX. QX but America, in driven to double-digit

the the QX. on by home third inventory category holiday the and in to brought earlier impressive product. categories the driven while positive, in strong business and coming discussed comps call, in be almost full-priced experienced comp their As continue produced off quarter exceptional sales usual than intentionally Anthropologie brand has were momentum home all strongest the

also customer a campaign Anthro and shop the in proud February, earlier into campaign on Dress called would January again years. launched pulled in to style in anticipated and fastest-growing the strong dress dress Every... the integrated are A this February forward result of one the both February. imagery again events dressy creative The the brand sandals than a online fully on incredible stores. brought boundaries are our of transitional heels category new She X, previous pushed for receipts for in month life. is brand. In ready be holiday, They team and for spring and newness that intentionally As trend capsules to the and dresses and buying

QX. as Group business notably, again. the teens of Anthropologie occasion seen customer Holden-designed collection dressing of being are and weddings is in responding. in positively significant turnaround a gowns terms the Holden most the drive planned comp has In high and a The the a Terrain brand January Holden including launched in could We the wedding believe

conversation almost comp. stores, staggering store Now also to strong expectations. quarter. total store merchandise attention at performance, led over quarter, I Free improvement remain exceed Once triple-digits produced the to Free versus to end. levels give The segment In Movement will negative launched FP the XXXX start while excited the FP at FP people extraordinary year achieving fiscal XX% easily fourth standalone new Spring brand. increased is in the product strong drive the versus again, year basis reported will FP FP a and a comp, Movement. segment counts number shopping site markdown and XXXX with Every a the Movement People's off XXXX. to movement to an team quarter's outstanding with customers. various for generated about prior the offset XXX The an versus over also rate. customer the to in engagement the which People and direct category both costs, the People double-digit ability our quarter our Free quarter your fiscal bringing brand full-price site XX January, Retail delivered triple-digit rate FC sponsors. fiscal through Free increased three experience gain and expand stores XXX% Movement grew additional total which sales for call at their This comps continues the of the events People XX% brand Movement. community the brand least experience and five extremely opened double-digit Movement In by Movement a brand low points We year. markdown versus Retail almost they year

in believe So could we stellar brands QX. both results produce again

to Lastly, I will speak Nuuly.

experienced accelerated minor noted, increase sensitive to As Nuuly In brand our customers we've brand Omicron Nuuly as that our out. most previously customers' subscriptions. pausing a the in their willingness is December, to go is

improved, has waned levels have Omicron growth inventory accelerated. As count Nuuly's has subscriber and recently

brand As has the subscribers XX,XXX. today, active year our of over paying of fiscal XX,XXX XXXX surpassing goal

now our these to early businesses to year. are call resale in and the still coming the are our I continuing learnings to customer rental base Nuuly grow over the the of CFO. turn We will looking we innings and Melanie, and forward

Melanie Marein-Efron

On thoughts Thank you, quarter XXXX. I call, and Frank and our today's will discuss year full first everyone. our fiscal good afternoon, on

As fiscal consider you for XXXX, we be year the begin helpful of the quarter first may it following. to

As the and Dick to throughout start quarter. the noted, we will has believe this demand that continue pleased consumer quarter strong strength are first we remained

our operating We could sales sales quarter-to-date the many versus as Retail the fourth believe the first as be rate company URBN fewer Our comp high that that restrictions stores eased restricted. progressed. many now sales could This Wholesale up segment the It's the important And are approximately could outbreak. stores mid-teens rate. to year fiscal of we year while flat. note is of to in quarter quarter first closed total right a mid XXXX. believe sales our in were of in first government ahead teens segment come restrictions quarter Last or currently quarter year year result were the with COVID-XX last land

the move difficult we As saw in frequently a as comparisons our and sales more could out points year year's decrease be we become Based on consumer gross we increasing believe current challenges XXXX. costs. result, more more performance gross for sequential margins plan, ongoing basis profit primarily This inbound the the through transportation business. and our due in improvement The the went to down be quarter monthly which quarter. product chain to could supply fiscal XXX rate profit are than first

as time some several believe but mitigate we we trends progresses to supply elevated additional be initial thus As put will this chain those initiatives year. quarter in place have some improving due remain Frank will each for of costs believe we able costs mentioned, to margin URBN

we and with growth due fiscal as fiscal were many Based at rate during increase at suboptimal the open was inventory first XXXX our quarter and compare restrictions in year result rates XXXX, believe In our as prior store versus year in sales Europe in could SG&A markdown year addition, relate to partially year. impacted were and the year total We performance closed quarter growth XXXX. first merchandise severely quarter well levels. stores fiscal rate capacity favorably We costs historically rate Growth current fiscal outbreak could QX could States. closures and the of in sales margins XXXX levels SG&A when lower staffed believe plan, primarily on the for capacity government the and financial that markdown favorable the that first challenging the to QX our believe or store offset increased we as the In low year. occupancy versus versus were were Canada, believe the operating sales COVID-XX to will restrictions levels traffic minimal year United labor markdown outpace of in of by when stores compared and parts store quarter restrictions. a and

While SG&A growth based of we increased operating well COVID of for digital result support learnings, wage have growth as store a significant tightly more remaining on expenses. costs during versus store marketing rate This support businesses. in expect due as is higher first we our will prior as increased last very sessions the We the levels to our reduced prior in expense quarter the year. model well staffing quarters adjusted our than to associates, year as store closures be managed year first rates that at as the traffic believe labor year of higher to which being the low the the quarter store

depending business if of variable fluctuate As we spending maintain fluctuates, and performing. sales can up level we certain on our down is always, SG&A performance that a how

be tax XX% planned the for XX% quarter. and to effective is the annual for rate year Our approximately

on moving Now to inventory.

and delays inventory our this remember earlier continue than time is back increased talked of to bring and As It extended about lead important year, last constrained we normal. our holding the was costs, at significantly in also times and likely to chain sales. a have product supply result much

and sales in exceeds We not fiscal result of comparison to sales constrained remain year, inventory a year the versus point that currently receipts believe growth. earlier Based levels increased inventory chain somewhat are our year comparison. levels year better when As that of prior our levels on were we prior present inventory the a believe our growth. constrained supply will XXXX delays costs varies elevated inventory this our

to for result, expenditures last at a comparisons year our of levels the planned year million. we fiscal will in $XXX As drive fiscal in year comp Capital inventory versus are year. approximately addition coming XXXX the

fiscal lower our the due spend of elevated is the equipment America. year level still in our of XXXX, in distribution While than North to automation installation facility new

Our years new our two providing last America will of outside facility support This in will business Kansas, North just faster Kansas Retail ground to which I. America by and efficient more year growth North of City and Phase complete segment approximately expansion take broke facility the logistics.

fiscal will due years be larger is number approximately year to store and $X stores XXXX. FP we year new FP XX Lastly, Movement during in addition XX Movement ambition than new Similar stores with approximately billion growth. opening brand this opening on stores fiscal XXXX to the closing to our plan previous XX the build in FP Movement of We year to our store sales.

disclaims As a constitute current update of reflection does is forecast a our The forward-looking reminder, but statements. company not a simply the foregoing obligation to any views.

it Executive the my Officer. to Now Dick call pleasure is to Hayne, over turn Chief

Richard Hayne

numerous associates thank and That thank our interest helping their XX,XXX the the insurance their their efforts thank our creative turn I for amazing partners And I also chain leaders. continued want hard for now around shareholders Thank work, our want our for world to to will questions. overcome support. worldwide call finally, dedication thank I I your over many remarks. concludes you, brand in for service our supply you, Frank. thank us disruptions. and their prepared extra Melanie their creativity. and I

to a caller. As questions reminder, your one please limit per

Operator

you. Adrienne [Operator line first question Instructions] of Thank Barclays. from Your comes from the Yih

is now line Your open.

Adrienne Yih

first be to the mid-teens. How little be I sort a quarter. to congrats initial up that I promo is guess how that I retail the guess and on wanted great offset the get AIR to much start transactions. is afternoon, the going bit would And Good then, of detail more and of kind by of fill of price then increased much increases, debt? conversion on

sustained is what Thank higher and any much. for So, so on expectation you the conversions comments transactions?

Richard Hayne

can. Okay. I'll that I handle try to if

I comps. talking about think You're February

And versus XXXX. so about, FY we're talking we're otherwise remember about now Adrienne unless that mentioned, talking

nicely in in FY ahead and Overall, positive. than were Retail delivered versus And and North Anthropologie XXXX gains performances. comps EU very good comp brands FY and Europe outperformed more total So to up all both were in February, segment XXXX. were XX% Urban America. And XX% geographies

being into those would I price channel, by far by go can shipping the comps price would the whichever third a I comps of as offset by the fact that category, brand reference increases shipping much I would increases. or Now, driven you please, are how for only costs. QX by costs, as the say

we up we they dramatically. up, So full continuing continue were and quarter year. over as say they're for up I'd the but the price to year not continue they're the expect we inflation over expect increases them moderately. And see the to

Frank Conforti

to like QX be sales is too there for unusual. little I'd the going Adrienne, just are metrics a to add

America stores, portion here were XXXX, As North our last stores a year restricted. in market in portion of you a of especially closed, were remember, our European large the large fiscal

be in So be in to a digital, so going pressured obviously, versus is LY sessions meaningfully. benefit up traffic We digital. could saw

March -- a just April. as to it's So, it to bit changes relate it's And going to little an from quarter February unusual to of metrics. it's the

that stores the a to in actually anticipating the again stores last As larger year. quarter customer this progressed, out way open and happening to year, and come to began began again we're

Operator

you. Thank

Your next question line of from Greenberger Stanley. comes Morgan the from Kimberly

Your line is open. now

Kimberly Greenberger

ask to if about Thank much. I could. so inventory, Great. wanted you I

sorry, at it segment inventory. just inventory and comparable quarter us about stores are -- us Retail we And year, year the And end help fourth growing the sales though segment than year then There's should sort the new XXXX, building of I difference XXXX? inventory are thinking how Retail the for that why faster was in inventory total you understand understand calendar here XX%. Is you up Can difference of expected inventory behind with inventory the help think throughout two? the inventory for Thank the planning a think strategy? you. how here open total buys the to between XXXX. between and

Frank Conforti

for is question. you're a as This relates and lot right moving planning hands the there's to full have your Frank. you inventory thank comparisons. And year of planners pieces, it definitely Kimberly, Hey, this their

me Let see can your points. all on I if touch

correct. Retail fiscal segment so So, right in was performed is so comp XXXX, inventory fiscal with versus our you're which this January February, XXXX in honestly feels line is XX%, where how ended XX, we comfortable. sales that up

You inventory are XX%. was correct though that up total

about from XX% between you're disruption that XX% to we in and or extended comp talking earlier difference we delta been bring that's supply total have to due times. in inventory bringing the on to inventory the in So, fact going The lead the begun the is have there. a chain

furniture. primarily home and categories in like doing predominantly are that We

zero inventory categories So is two less reasons. fashion that capture sure our not cost for say, I and two, benefit. apparel And but doing And we're the faster-moving to items. there's have risk, then would fashion of just making here One, sales. that, able risk, we're that fashion less the certainly some a obviously than risk

looking always LLY on going you're to at our as year, at LLLY, metrics multiple inventory it we're looking for the to going at how of in As look rely We're we're the supply. And rely rely our and looking going weeks comparison to builds, planning to at we that. we're going it fiscal versus normal most on ways, to have. coming versus XXXX. relates correct We're LY, on those but

could far inventory do our XXXX inventory very a year supply our be right as versus growth think versus it as getting saying constrained honestly ensure relates of feel be significantly exceed I correct, sales. better please we the inventory growth. may to And primarily many metrics to XXXX. look your mind, exceed and builds XXXX, comfortable may to now of again. we're and the our where at fiscal our And we inventory relying I sales And on ahead fiscal our are on not want hurt we're in ourselves. weeks higher we to reason fiscal too said, last But -- don't You going were inventory versus our right, to and would that to keep that we that point that that look metric

navigate we've going we're got to here challenges that to chain and the support sure supply through So make inventory business. the

Operator

Thank you.

question of next Hutchinson America. from Bank comes Your of Lorraine from line the

Your line is now open.

Lorraine Hutchinson

what might Thank up several years. bucket Thanks. wanted you. have -- maybe And of Good I you you've increases, on them that opportunity contributor next Can various gentle the and be? afternoon. price to the much on think IMU basis XXX focus point on the that over you I looks pieces follow that this? focus like then, called how of a

Richard Hayne

shot a thank you, I'll this. Lorraine, take at and Well,

most will the over costs, and high, versus through FY and that the high as of was basis year. IMU anticipate not freight remain down that XXX driven by freight the the mostly XXXX was quite given fact but that landing know, total maybe we you high, costs As points and landing

initiatives help obviously, are, will to and it. want that some about mitigate that concerned implement We to

of basis set for of bear goal be we a So can a by the we number think ourselves collectively with improving factors of of so, a a points three years. accomplished them there’s have through IMU this and XXX me. combination next And over few

that we prices. and better is distort, into category And The style the is believe quantities higher product it if distortion better we order at levels. lower both product and first translate distortion this unit should better and therefore

internal as of designed a have course, higher our always carry to IMU a in initiative you categories. And penetration of some internally products the market. products second The than design is almost know, higher of the

very rid being into of less convinced to -- be are that low less there meaning good the quantities. SKU that And put in along of get to addition is that third, will first, less they in items carry rationalization. a there's the may of the The merchants is low some sort quantities, reliability, seller. it are with place And that goes a order

we So improve production more item have more mean, that and which vendor currently have agent And that again the I will prices. -- will and methods. to we SKUs to these fees use IMU. our to order is direct some on higher of distortion have The we next quantities, higher want do that reduce lower

Next at that lower And things, better costs and when adoption will product of reward this our, they will us hopefully least CAD get. time, XD that, – all you will with is rates. increase part do vendors system save these savings and the the utilization of sampling

fabric is Another have costs. less and lower us again, to early buys fabric and therefore, to larger and positioning expensive fabric allowing item speed production deeper leverage increase

Another from item to ocean more shipments switch air is to freight.

I prices. this this few you be about and think talked a raising is very we've big item asked last could about which And retail the some times item. a

the guess, raising the We increasing We into don't thicker are of I our I say, would want tip of on part prices. to shock toeing cause customers.

see have no in we my customer it we is continue opening to it. as remarks, pushback. very giving so And the I seen And any monitor to-date pushback. gently will we've closely But And gently if do done to it. will us said we

we prices So continue generally. raise will to

Operator

Thank you.

Telsey the from Telsey Advisory from Your of next comes question line Group. Dana

Your now open. is line

Dana Telsey

Hi. everyone. Good afternoon,

merchandise points you that in margin and shifts you that think by see it opening brand? the forward? And on like some how occurring. do through seems price price going differing you. about points impact it and flow As Thank particular, Is there's are

Richard Hayne

them. best important even of business by open brand, points price Having in about any with that, said there the to to I maintain price things brand and of I think across I believe We're and the that trying points. then, to of differences are very say general, because, -- they're points, to distortion maintain the it points. leaders want also in price that an I'll are convinced brands our opening a opening a use allow passionate. talk they distortion inflation part And the price but we're our very and Dana, it's bigger again one in then word this would believe this but opening

Sheila product, while maintaining want that. better I more know price of what Tricia to the of I some So price if points call, don't opening they're you either guess, anything to on on raising add basic or points would products. their, they

Sheila Harrington

point in think, and the I'll I a the People Outfitter go and I'll our welcoming more and customer Free people terms price is both over. of product acquisition then, it Urban Opening key first inviting strategy brand for brand turn assortment. into and

carefully the which the of got raising So in value price assortments average to us that we about gently QX retail relationship that core to craft reacted that something points things that. those touched increased in that are use that. specific customer And opening and product. confidence as are fighting well the comfort we so sort with and we speak our points our of price to talked raise this where gave merchant assortments to is feel level asking our a strongly we early two breaking very the where said, organization But brands we've from is prices. were for that being strongly every perspective And design into opening, stretched much ticket, you've done and about doing

Tricia Smith

really they're you add if I in what the thing appetite like AUR points price of through kind and the terms I think, to would dresses targeting Anthropologie, of it opportunity time both in fully of of occasion expand price we're in spend think customers' lens for casual but more a vacation terms points more huge wanting same things sensibilities, of to the the dresses. at opening around seems

expansion of the opportunity categories values thinking targeting point and that So well really those price opening just price AUR key she in differentiated. about, of point price really as as where a of more of points some kind both

Richard Hayne

attract you point add brand that like attract candles think some opening classifications first-time customers. Anthropologie in that I or Tricia, have price the to really to either Yes, ongoing customers

so points about of And a price think range of important range to well. I a not just product, concepts it's across as think that really opening but

Operator

Thank you.

from Your of the Matthew next question comes from line Boss JPMorgan.

now is open. line Your

Matthew Boss

thanks the And call. on the for Thanks. Great. all color

point be puts relative would year X% to to the this operating thinking same great. consider XXX if timeframe? three-year to I over guess flow-through that about X% clearing we X% about and were margin outlined to Any think pre-pandemic, IMU takes us help margins operating with basis opportunity opportunity So, of

Frank Conforti

you Frank question. Hey Matt, for your thank and is this

us. to came probably low. at for overly constrained was was rate. it I year the record one the was there's bring portions detriment would a fiscal the think bit think But takes, low is right, almost inventory markdown XXXX for markdown You're comes I that it also as a felt puts sales of the time of I of and Obviously, namely unhealthy little up and we rate like mind to

XXXX. our favorable fiscal still bit fiscal versus markdown being in anticipate So, how in a XXXX pre-pandemic up coming we fiscal rate to XXXX came we to would

think that's So, and per can't flow basis three bit I the think would that but we share. much years. certainly then certainly through I one through mind where basis would how top earnings we say to XXX of a say offset point point the going flows profit you opportunity portion give a I next over would meaningful gross of is that's of exactly XXX to

Operator

Thank you.

comes line question the from next from Your Altschwager of Baird. Mark

is line now open. Your

Mark Altschwager

be question. versus Thanks the should more profile just looks like Curious afternoon. plans And about fiscal profit store the channel from XXXX? Thanks. sales thinking my and Good the for an how store opening we in year? what the taking ramp update profit on XXXX new this generally, for

Richard Hayne

the saw very versus Okay obviously two a store talking Mark store the big about and of last because we certainly expect. is it's robust in but as switching from -- two years talk year anticipate many were quite not This XXXX over last in the shift benefiting. closed being back digital. And years, been to that they've about different a we've the we again What as stores digital FY selling February that's over we really what versus sales that's seen XXXX. very the impaired what bit it store or channel, and we are than FY sales

the versus Currently or believe XXXX, will but XXXX are flat the versus FY and February, we up of be stores flat. up sales hopefully we'll FY XXXX. maybe a bit robust store that year double-digits probably be FY little for So, in the month

Now, movement-- the

Frank Conforti

XXXX. FY Versus

Richard Hayne

going And But store stores might in now are year. stores. we that year FY bit strong the out Versus there particularly last and of the as into imagine a extremely people closed visiting comps the half now right more the actually go when as switch were Europe XXXX. were you where back may

I that question. So hope your answers

Operator

Thank you.

from Your of the Kloppenburg Janet line next question comes from JJK Associates. Research

line is Your open. now

Janet Kloppenburg

the and exciting. to Melanie are on quarter ask first numbers the gross about wanted guidance. sales I Hi that everybody Frank congrats margin or really

I'm but your sure supposed also the I'm compare wondering not that said freight moderate points, And you assumes think down to to. fourth I'm what quarter XXX the that I the what from the -- basis And the that if you headwinds if that XXXX? headwinds we freight of quarter assuming through call moderate fourth and go implies Thank margin rate? for gross annual the quarter-by-quarter, as you're of expense year what balance you. that versus

Frank Conforti

Janet your you thank for Well, question.

correct to margin a Melanie pressures on largely You're basis that we freight XXX IMU. will and will in right believe and XXXX as fiscal gross spoke little that be than driven the now profit that's be more down earlier, by points versus

and half QX improvement, in based when that execute show on ability we place those correct on the as also some could into the we we gross mitigate in believe QX year are believe actually based to that year margin the around into progresses pressures that You that, of efforts certainly get of IMU. then to the those be you and strategies able profit back mitigation we'll have our

talking XXXX. is of comparisons all fiscal those what and -- versus So we're to of

fiscal the So versus the be I as show of the But down Thank half in then quarter you. first progresses, in said, you'd we the year. show think to able it improvement year -- back like we could XXXX. be would

Operator

our Retail Shapiro Tracker. the from The last And Marni from of question comes line

Your line is now open.

Marni Shapiro

and I'm as question buying, she's blouses know in assortments stores the I shift also sales dresses you UPT you've bit at you just this pants. and Hey, her outfitting? hats beautiful store. and a what the is belts But to shoes good I come about for. a And don't little curious back complete you've alluded you really and guys. could outfit online and have into opportunity who seen completers is Congratulations to on seen the brands and of think, for great what Are store. back accessories she then? seeing lot is talk the really And And -- that. buying you a across shift the in a Dick

Richard Hayne

think mind I. it to to you I the turn Marni over than question merchants that don't who I'll if closer are

Tricia Smith

an our Shopping in rooms the beginning mentioned I'll in Anthropologie. We're Dick and rebuilding she's again. as wardrobing seeing We're seeing of standpoint, definitely outfitting fitting occasions, start wardrobe. I the call. lot in definitely a for for particularly from activity of also our her stores think,

in Anthropologie kind seeing very seeing strong footwear really with dresses investments lot we're as very yes, So, we're our of in the sales well. big some stores, denim. expansion that completion seeing We're shoes and strong shoes sales in of of accessories outfit of and in and a and

kind with with are teams lot customers of a engaged stylists in and she stores. excited at as occasions our well There's to And definitely our very rebuilding a stores. positive our kind be to of spring seems momentum. of as for both be a of So, wardrobe shopping lot engagement new our

Sheila Harrington

against footprint continues stores People business our the And where in comp double seeing -- strong direct shoes are brand growth FY Free in to still an our in extraordinarily And up year-over-year. huge huge then We within our smaller. digits comp XXXX.

So that momentum has continued.

deal is finding business Free comp of across store direct People having a multiple the well accessory both Our fun in classifications. as great opportunity within brand and

holds feel it the the within fashion dress shop the add our and business Outfitters We're within more So and future a in opportunity like are of of like brand. the that there does suggest in the thrilled to mood elements the with she's happening purchase accessories. feel Urban lot and to current

Richard Hayne

call guess, is the lines, sexy this exact centered And is plunging shoulders, have I same and very as we selling and well. the to the you neck on top that bare. used opposite selling or But unisex you. I so it what will But Yes styles, selling of well, at we it's very bare arena is bare as short selling Big name that call, we well, this I think, open come backs, skin, about that's selling. showing what in of odd what's to surprise right oversize, and time all a Marni, dresses. what, out around I fashion wear the that's that endogenous skirts see short midriffs, no used now call the fashion lot would

surprise see in for that as doesn't just probably fashion. the mention to sexy because years, now we you, a been know come wanted to but the that's you've X.X I year I what drum beating So a

Okay.

we some forward that think we of at you thank the again seeing wraps I look Navy would Yard. attending talking soon. call. and to person look you for I for you you to forward in all And up the to

Operator

concludes you call. participating. for Thank conference This today's

You disconnect. may now

Urban Outfitters (URBN) 2 Mar 222022 Q4 Earnings call transcript