URBN - Earnings call transcript Q3 2025

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Urban Outfitters, Inc.

Third Quarter Fiscal 2025 Earnings Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. of Director Executive McCullough, Investor Relations. Oona ahead. go Please

Oona McCullough

from results Third Good that results Conference XXXX a October release and XX, materially URBN period following may and the forward-looking afternoon, welcome to press statements. operating financial the may and XXXX. Quarter outlining the Call. ending actual statements. those issued X- X-month Fiscal company the for discussions Earlier include The afternoon, this note Please differ

materially Commission. differ projected could with cause actual contained information the results Additional factors in to is concerning that the results Securities from company's filings and Exchange

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

Richard Hayne

everyone. in August. and to and you, pleased sales quarter good announce discussed surpassing third Thank the we profits afternoon, We're expectations record Oona,

hear Co-President our apparel Hayne Conforti, to about fashion After rental Frank, on FP from will Speaking results Nuuly, Harrington, talk by brand, will those business; will who Frank on Movement. call, you our hear brands. about Sheila and our Dave COO. and first fastest-growing athletic updates will two our speak today's followed you newest of

will Following now turn we the for my those brief your I will Melanie will address questions. talk Marein-Efron, closing be quarter. call Then about CFO, to updates, our expectations remarks, fourth current URBN's the after pleased Frank. to over

Francis Conforti

of quarter sales of third was the $X.X quarter which continued billion, as the some some of will Total sales. X detailed remarkably commentary everyone. X record to provide delivered trends brands nicely I posting prior to afternoon, grew and discuss URBN total quarter, I by call. you, Thank plans our well a on versus our QX environment. perform the good macro current brand. our will notes quarter more record X% Today, the Overall, in company exceptional and an our Dick, ahead teams discussed year, on followed by also third by second results

comp Our sales positive Anthropologie robust growth than was and Free increase in Outfitters. driven decline in active delivered Retail growth segment double-digit segment produced offset XX% which year. a mid-single-digit due revenue retail part People segment to subscribers Urban comp Nuuly at more a average of X%. Retail single-digit the high comp a versus by prior a

the wholesale in healthy by the driven People. revenue sales Free increased XX%, at by increase Additionally, segment full-price a

driven saw merchandise primarily the points dollars $XXX Now improvement segments, moving gross on profit in profit merchandise margins all to and for was while margins in followed by increases XX.X%. to improved due to gross Free to basis improvement million, profit. Anthropologie Both gross increased X% rate People the Urban while gross URBN's This Outfitters reduced XXX margins, higher by markdowns. by improved initial initial drove merchandise markdowns. by

During our year. noted trends we more to sales segment and delivering were last Urban previous good anticipated quarter year. trends that versus and the slight last People merchandise markdowns in markdowns, markdowns flat promotions year year-over-year merchandise need brands compared merchandise which call, the as improved Anthropologie to higher in Outfitters Free retail remaining slightly slowdown is progressed, experiencing recording resulted the news for The lower last a

Free rate the record Free lowest to way to prior important was note People markdown that the the did is continues current any markdowns our with It retail year low, lead segment while brand exceptionally People of their higher merchandise rate quarter, brands. the of in and

reported gains. strong gross segments the both margin subscription and Additionally, wholesale

income of Nuuly spend due expenses People, Anthropologie, at and drive Anthropologie increased the X%, SG&A total to Next, for growth the increased Free operating quarter, marketing boosted significantly profit XX% the The used in slightly subscribers. X.X%. to by XX% FP growth $XXX our SG&A million was XX efforts rate marketing The digital URBN improving rate both traffic outpacing average just of year, in to with growth. solid over rise to basis operating reaching to led by Nuuly's Movement and by active store to points Total sales primarily sales company over the People while brands. Free rose channels, campaign compared and last

there X% and Net team income now details The of retail diluted comps positive $X.XX to segment accessories Positive income home, driven in offset assortment in driven apparel, Strength to delivered similar the Within driven XX% categories decorative operating category, is the with saw in the holiday and I growth. segment these increase which investing consumers. delivered another entirely channels. strength Anthropologie. and apparel, categories, categories is homes by or received quarter. was by has by brand, the positive, comp Within a $XXX partially excellent the By will broad-based with seasonal Anthropologie share. by quarter by and by their growth gift sales. weakness nicely double-digit refresh digital category eighth in comps more per starting lower nicely been across in Home, well and a both quarter holiday. for beauty consumers straight was entertainment million provide Retail a furniture shoes, were store their

acquiring engaging their continues of The existing on to execute customers. Anthropologie team customers strategic initiative new further exceptionally while well

third brand and and both the well-managed profit in increased customers growth The Impressive drove coupled which the expansion, store During year. channel. active traffic high single-digit XX% with to prior expenses, continues increases creative in and marketing quarter, brand the both by versus for operating content by sales supported margin drove investments record quarter. healthy new digital dollars make outstanding over the strategic the

range the Anthropologie to continues positive third holiday categories. respond plans, fourth the to season, similar broad to remains in we the the enter a of quarter. positively on comp optimistic current we brand and a our deliver Based consumer could As quarter the believe

and Retail was increasing total increase The Next, wholesale, sales the Free DTC quarter low a segment People team Wholesale segment in increase with by single-digit X% double-digit outstanding revenues comp, driven sales sales store People sales XX%. in a comp. produced store and in XXX% Free Group, new a by an The driven openings. global comp noncomp including by the increase comp was XX% driven mid-single-digit

call. During the brand Movement. segment further Free growth brand apparel, achieved FP and growth driven wholesale positive later speak FP by new XX% and the Movement Movement across People FP growth XX% total will segment delivered quarter, The store to over on sales accessories XX% comp, the growth. Sheila a retail

when The Based quarter, gains sales on mid-single-digit in positive department increased sales XX% our Free price Wholesale People a segment Retail fourth deliver by by specialty believe to full partially People and offset we for the could plans, current Free segment quarter. the driven stores, during an low- sales comp the growth utilized decline Segment improved reduce channel. in profitability the closeout prior double-digit product. in the to quarter. and versus intentional to aging from the deliver sales We significantly to continue the last fourth sales improved brand year closeout believe wholesale could profitability channel segment year

moving improvement brand. Outfitters in North single-digit delivered in positive last a in resulting the we quarter. on American loss versus sales, in the overall in the reduction comp. with America, for Now the Outfitters decline Urban markdowns Europe a pleased in the Retail while low year. lower decline driven quarter, performance was brand's a merchandise in by to the North Despite margin rate operating comp Urban the to the This segment X% primarily comp disappointing recorded due negative are

the The approach in such important accessories, lounge increasingly brand during certain delivered These categories holiday denim, becoming the as price home are improving regular key we as quarter. performance categories items key items and third key and season.

regular Additionally, the improvements store nice the being sales of by strongest October the brand improving quarter. as comps progressed, showed the price driven in month with quarter

We team the and have they full brand are the confidence implementing. in strategies

the efforts yield on that meaningful our believe results we believe be deliver fourth quarter. plans, a the their mid-single-digit acknowledge brand we current over Based will may decline While comp could we gradual, progress time. in

quarter Dave turning we the caution. were macro strength call discuss spoke third the trends. with over August, like in trends last and demand When would to of the Before I and business, address approach the experiencing to Nuuly consumer the briefly we environment softer to

a we patterns October healthy progressed, quarter. quarter consumer to the as the delivering return of However, the observed strongest comp with spending

in in entire based season. we big calendar is still holiday with holiday it Although season shift our optimistic are the results, early for the current a on holiday the

Chief as We well the anticipate mirror fourth in segment will in increase call now growth third details as wholesale single-digit strong turn that of a total by growth Hayne, driven Nuuly Officer, to the I and Technology from a Nuuly provide sales to quarter on sales Retail David continued revenue that quarter, double-digit strategic of branded performance segment. growth and the update. comps, quarter third the the Nuuly in President over will

David Hayne

XX%, rental our has [indiscernible] XXX,XXX. Thank an everyone. quarter subscribers our profit. I'm first quarterly surpassing you, we this and we year, Since Frank, business call On grown active And share weeks on afternoon, in last same ending base have pleased celebrated update operating active this Nuuly. then, third at to XXX,XXX November, achieving our last over in good few and the XXX,XXX. subscriber

as net business. The new robust results. XX,XXX as active subscriber of growth third records financial months. directly customers records back quarter exciting was growth strong or and total into XX% for particularly quarterly well translated quarter canceled the X attracting in a increase subscribers, with with And third subscribers The for paused just into

increase versus revenue, last Nuuly delivered $XX year. million quarter in XX% third a

operating will and efficiency, million a the profit our a We rate operating resulting rate. of full continued $X first improve this with marks operating operating continue mid-single-digit fourth which This have into should consecutive and quarter, nicely margin to in at Nuuly's in trend positive gross margins quarter income quarter lead a profit. with X.X% believe to operating we profitable year second

primary and has to customer Over robust support customer the on our our been driving operations our pillars: focused quarters, past several growth X the advancing experience, awareness. scaling team

from Urban choose Movement First, heart know and assortment our FP of the assortment styles Anthropologie, women for the Outfitters. and brands, the of Nuuly at brands main reason fashion Free customer is that our experience. of family and People, are We breadth the

we past units our to the to back rental allows customers brands. the rented reciprocity the them platform on were that Over hear year, which from platform. with of the leads sister new experiment XX% on our from styles the And brands regularly to

also pant extends of Nuuly and Anthropologie's customers nearly and partnerships year. Product Nuuly also next us Anthropologie Laurin, by purchasing brand for the of subscribers, additions fourth positive both a learned as is quarter they tell million Farm has their of Favorite our Mill, Mother brands 'XX, FY Antonoff subscribers place reciprocity In we Alex collaboration planned which have that by first have A to them. Daughter, Collette the more received been styles Denim for who Polo and have Rio pant, moments collaborations Arbor, rented strong great Collette many from well exclusive Madewell, been This X/X subscribers they initiated market have with X.XX Ralph see Nuuly example with among new and we on directly. nearly both referencing these name partners with recently and Rachel very XX which like brand others, August Nuuly. collaborations been different with announced marketing

to a friends making for and allowing will on the held it our the functionality our buy of improvements addition a rental to to more June, introduced for has new In gift customer browse experience. customers ago, rental family. to lists digital feature multiple impact free selection know cards, we we significant direct next In assortment, shipment. a to their styles Nuuly and released website In month we easier and in future shipped launched create launched subscriber-only be and search a shop, intuitive. making gift to platform rent faster benefit, September, people annuities. In allowing just our we of a our in subscribers we that Nuuly And thrift inventory to February,

drive experience as customer help the business. revenue for incremental features the strengthen These to as well

to February, pillar in second new to possible believe had of staff throughput Missouri, fulfillment has we only positioned operating year, facility our operations X this of In at new capacity. the excellent we capacity of opened facility has necessary At The growth. virtually no of start year, our hundreds capacity. was have this was interruption have Raymore, transition our scaling now millions our teams, This we Throughout of this ensure nearly customers. required square foot is now customer. which volume maximum to are and center, of with focus XXX,XXX been smooth processing migrated units of our due effort support future our calendar and subscriber we XX% and the tripled inventory, we to the to the subscriber serve we trained well which

leverage us growing and more This enabled has logistics to It In we not achieved us scale also third both meet has expansion to quarter, only the efficient. be implement fulfillment of enabled half to demand. in delivery automation expenses. further to to will us logistics expenses robust in first Raymore gain in plan and more in facility year, next the enable that we the leverage

Meta, to continues greater with improving variable business experience further leverage our on and continue a even end, buying the we TV, improvements, Along featured the our of centered indications as to bags point our talking is and focus seeking. Nuuly improvement of campaign we grow, launched the It we to placements we Additionally, that featured all margins. drive including acquisition. renting operating yet. Nuuly. To customer believe across this channels, The pillar focus fixed we largest normal, will is to expenses, YouTube streaming has leading our were in and QX, campaign third that in reduce customer notion and growth operational to out-of-home costs, awareness awareness marketing mix and been brand on can was

To summarize, that have something to we is built us special it Nuuly. in clear

company profitable clothing to business over our overall they subscriber fashion and winning first-time are demand rental We model. the of know with customer new growth prior and we as customers subscribers We the world in the that by rented have Nuuly. report become a expanding market largest never have X/X rental robust

all after services to millions, after into to XX I'd the subscribers subscribers subscriber months why opportunity we Thank many to our the for discuss will inviting XX% I'd service in built achieve Harrington showcase into all high believe market rental nearly brand. grow subscription and so success I are clothing active you. addressable partners excited rates we to helping well Nuuly team for FP future and for the for thank still are ample And to like now call a still closets. and stretches service Our active into about to total Nuuly particularly nearly months. with and brand XX% the and the retention the what of Nuuly. helping the like to Movement XX providing our significantly shared turn thank we've Sheila their

Sheila Harrington

of the a and well for and everyone. will the you, the team prioritizing strives Dave, success are growth. future athletic creative as more ongoing cornerstone discuss to comfortably activities. fashion allow alongside as and This confidently We as this. to in textures runsie individual. brand. performance in outfitting. a Movement committed is shies Product of I and consumers embraces Movement evolution performance first-to-market the detail excellence created and strive the of Thank brand good to and onesie away afternoon, female around to them Today, as businesses, allow FP range from continual fully of the expression that how pattern, direction in define as uniquely for brand of innovation typically the our performance to the ambitions and FP that such leading the and built business the active washes as in well creativity lifestyle color, has powerful fashion put silhouette be brand's service of the the move evident We and a

retail apparel segment. This reflect our results with in and this trail and our this bra performance outpacing growth quarter's Court Studio and from year commitment

this continue the We blending right within handwriting with in fashion to invest organization, it to to evolve true and talent brand. commitment sourcing the fuel and and aesthetic the our

to the digital More and our name journey. see portion this new with first beginning marketing, as higher Movement achieved brand only People's has driven was FP as digital through its and Movement brand strength. independently achieved presence past are positive brand brand both and net the X this the of and searches higher year to in this We growth we driven distribution wholesale digital stellar of be at by a well explosive expansion and consumers FP of Movement. has change recently, by early visibility all recognition, the as Free along new unique from brand's attribute increases primarily stores and growth brand the channels Movement ecosystem FP consistent FP of strong and across quarter. are the

and both growth which grew the The exceptionally within to of have large distribution of specialty but also within the foundation partnerships channel the this build to premier at growth sales Movement forms store athletic fleet has strong, quarter. strength our expand FP our year strategy, the their sustained as driven as space by add XXX% of business business, continue and a opportunity channel we last digital been significant well Wholesale the our store strategic and partners wholesale brand.

with Our long-term specialty our sporting run growth. and along strategy and a sustained product aligning with outdoor encompasses path to strategy confidence studio, goods creating stores,

stores stores Stand-alone healthy profitability Movement AOV, strength sales strong past growth and Existing all significant a per FP part conversion. remain including and of our plans. are stand-alone gains. across achieving This a total square quarter metrics, stores, UPT This have produced driven foot, our plan XX single-digit increasing stores to and total we stand-alone stores year, to comparable high open year-to-date, new shop-in-shops. XX XX of by

foot. our in of footprint spectacular the stand-alone of expression a we York. continue increased Soho, square elevated first square a our X,XXX the New average stores opened square of per see under XX% by our selling larger It While in is May, XXXX, feet, in sales store we is and store have footage to brand. most opened Since

of that could and North X,XXX least We and fleet at XXX [ feet square the in stand-alone between typical ] store stores believe X,XXX America. the include the are movement be confident future will

they but for points community perspective, and sales and serve also a from productive highly stores building. brand the our centers for provide are touch as only education Not

and America. North consistent across workouts motivate and are events, marketing more. and map-based clubs teams energy are run The to contagious store Our committed including and attendance and activation do us to

years, XX% The the its continued Movement this increase. way year years same channels. X rate triple Over all performance growth, strong delivered X over by the while driven XX%. across was wholesale growth with has strong Coupled in with growth brand gains, last by operating top line a digits. increase. Retail compounded X The led year-over-year a of third profits XX% the This channel quarter delivering the XX% FP segment achieved the grew a

strong inventory and management, increased profits remained rigorous expense strong, sales, quarter Third IMUs fueled control. higher by

Fiscal another our Olympians, authentically It for marketing on most and to by athletes professional campaign the athletes, brand Never with year including ambassadors, 'XX focus jump-started still. is record-breaking entitled successful paths. This up campaign women athlete activity-based FP shaping Movement. was be to date celebrates Standout their female NCAA a roster diverse forging of our own

few the years is in believe $X goal larger. Our we surpass an but substantially the billion over longer has to term, brand next be opportunity sales, to

athletic female is focused remain aim the needs Our infused performance meeting leading and in excelling become globally. We her brand to both unwaveringly fashion fashion. on and

is confidence see. and opportunities date team, rooted our to execution we in strong of Our the our creativity passion the and market

I FP entire the now Movement success the amazing team. is to work, dedication. to I'll passion thank over pass brand's The Finally, their and and to call wish recognize Melanie. hard tribute a

Melanie Marein-Efron

Sheila. you, Thank

year quarter prior our following FY on Now forward-looking financial year. adjusted items reflects I the for certain the and FY onetime will performance. results discuss 'XX 'XX thoughts statements QX QX in The to fourth comparison fiscal performance

be we segment. the Sales the company low fourth quarter, on growth growth high comp in quarter wholesale could that believe in teen mid-single could Based segment QX and sales result growth digits. from the of in single-digit growth Retail start total

we revenue lease growth In be digits. segment mid-double could that addition, believe new

margin compared gross sales gross approximately the increase at The believe and we quarter. primarily margins points fourth current lower for brand well margin due Urban markdowns, by to Now product Outfitters initiatives. basis cross-functional quarter fourth URBN's year profit improve as profit higher could initial performance prior the be in XXX from particularly as on could to gross to the rate plan, on Based margin.

plan, believe mid-single to we Moving in will on current our quarter fourth growth expenses. performance the SG&A for digits. the and Based SG&A on increase sales

growth be People, SG&A in increased Movement Free in growth by and and to Our Nuuly. planned Anthropologie, marketing driven primarily drive at customers sales could expenses FP

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

fiscal We be $XXX could similar expenditures We are our for levels tax at fourth and XX.XX% planned rate fourth year sales grow at growth. XX% the a inventory quarter approximately full currently to that believe for in rate million. Capital effective to quarter approximately fourth are planning the the quarter year. the for

be FY the The Raymore, fulfillment support. office is Approximately spend broken to expansion XX% remaining down project and in and XX% Missouri, center store normal approximately is investment to quarter, supporting rental retail the capital capacity opened our and logistics home IT, follows: operations. is related capital logistics related in which as including Nuuly investments, 'XX XX% the first would

stores 'XX. be we'll FY Lastly, stores closing during and new XX XX approximately opening approximately

new net growth in store Anthropologie stores. Our Free and is by People being FP growth driven Movement,

year opening and plan 'XX, stores. we Anthropologie stores, XX on fiscal XX During People XX Free Movement FP stores

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

of Now I Chief pleased to the call to Officer Executive URBN. turn am Dick,

Richard Hayne

growth by but URBN delivering fast-growing in forward. I above smallest our top creative teams, quarter, record opportunities them. the XX,XXX success I'm you, our and value produced continued teams major even brands. impressive and youngest, the efforts thank profitability. Their are and collective our only more closing, making while by co-presidents, shared service of and their line punching Meghan an Thank URBN. We're today, and worldwide. In Dave, and confident poised our success contributions associates and our merchant, brand leaders, Frank, of of brands our moving important Tricia, many our are part I'm weight portfolio Sheila happy I and excited thank Despite X growth operating another also of They're not adding the incredible Sheila their share thanks these to both being become to Dave. stories to Melanie, also brands to

around the support. turn globe. creativity. I I'm over their recognize concludes many That and dedication the now I for call thank I constantly our and partners also our continued remarks. finally, prepared by the to thank questions. shareholders And your humbled remarkable our

Operator

Instructions] [Operator

And question come line will Hutchinson Lorraine Bank of our of first America. with the from

Lorraine Maikis

you how planning UO been business? most changes the inventory you the And into the begin to and Could are talk spring? for brand successful the as have that stabilize you fourth quarter then to for

Shea Jensen

Lorraine, the it's Shea. for Thanks question.

I progress First, strategy say our and in about. able think feel we've really that laid to the a that couple excited apply our particularly would are we we against about made And the with out that been we've confident customer has who that there's an is, firm those action team excited of understanding I strategies. of areas a

an those the those, are in from momentum. the invest that accessories positive really able of but lounge, denim, seeing we and First, fourth notable, really we perspective, feels the to good about home quarter, mentioned enter invested think Frank when showing for impact and we've fourth are been the quarter. assortment of momentum assortment some fact that areas lots as and that also into accessories of but progress women's we've

seeing start, to really off great that a As well, good. we're feels holiday and

Second, in applying. that channels quarter. And fourth as building we traffic this excited marketing is our nice team's been a they've the reflection selling see efforts we're think enter the in momentum we to on

question last, also comp investing the then manage operating Our And on an feels And retail making inventory season is think we October basis coming you been out best great that related great. I and as where momentum line as specifically, bottom from sales. mention in Frank channel inventory your a I holiday second to builds address would we of we're that sure and is seeing strides start we've performance the sales of from more this managing but discipline. with perspective, an heard perspective, say, an line, making from as will year impressive with

Operator

One question the come Barclays. line moment Adrienne our and from of for next will Yih with that

Adrienne Yih-Tennant

Congratulations, well-deserved. everybody, -- for great here. welcome, outcome really the you you're Dick, on

pipe the shift. paired kind and the to maybe denim were the with bigger silhouette wants we shift, back what to -- back and spring, we're anybody you of about I or For in on like seeing little to the always you, talking for who bottoms get in

many have into adoption. scaling from We heard to that fall others on back it's school

are XXXX. these at it buy as than of you what X-year conviction go of kind give on of into normally, Does more event. brands we each more your more So clarity, spring to

for Frank, we it we that the in UO, at about segment recapture division margin it of be put of terms recapture? recovery? said would negative will sales which loss, the kind on would going of you less comp then margin. lid know a versus How you take a -- for there's recovery, UO What Are at margin And first, should was think like mid-single-digit margins sales UO?

Richard Hayne

the first I'll Adrienne, a shot Okay, at one. take

were getting and we think years I about know that pants about X fuller talking was it ago and and on path. wider, Tees, talked you we were how that have change the silhouette continued it seems like

I full we about if now. wouldn't that what's competitors and on. as I be I think on we're shape did, the teams the probably barrel have are to up can no, wide they so possibly might seeing don't next. few last get good And I success don't and as still shapes the know call broadcast the come guess, with they the that you that with years. as tell I all over But that other

Francis Conforti

price as quality it business quality reg first, return and We're to Adrienne, of the the focused the to exactly the consumer on of guess, order sort earnings. that the I relates of Urban's have cadence, of right. you it And profit,

in and rate So great and it rate, which and order here the markdown you're where loss. that their seeing drove was team deliver to that lower it is see lower in orders third MMU did quarter, Sheila, improved, which intentionally executed being a Shea the

not profitability aware are to off to We that return in in order of come drive top for next we're And we're rates right to they going going gains. a sales brand leverage fruition. to but when to that on fully line come, the we are the have to fixed get the recapture execution to is in forecast to see are that's still first that need we starting stages, leg recapture to as to early position happy And margin obviously expenses. in to where order that we're now, going of the to the and leg starting

Operator

for from that JPMorgan. of the and will moment next Matthew with One question, come Boss our line

Matthew Boss

you fourth comp margin MMU maybe in optimism on next is your and gross elaborate And quarter drivers sales best versus about quarter? then how year? the puts to you And think how could each into tracking Dick, fourth could speak and November? maybe Melanie, so to remaining IMU brand for in far takes store

Richard Hayne

Okay. give it shot. I'll a

told you, about we optimistic As the are fourth I quarter.

and, third couple fourth would the couple in fourth I of multiple the system, to hurricanes that resilient. the impact an lasting quarter, remained, of down what experienced That discretionary continents, call the range in the East awful ravage weeks presidential unusually multiple I Coast, the and the would of election. in noise quarter, third labor I'm first didn't and weather of and those consumer remarkably course, the all lot the sorry, we characterize And and up as warm those, West have Southeast, of much parts seem quarter During weeks I it. multiple from of wars first Florida the on deadly disputes, spending. -- events in in quarter Through has guess, the

We weeks strong a saw the the of noncomparable continuation of due November to The Thanksgiving before first weeks shift. October. sales became the couple from of the

take similar turn has hope us what you will Frank? QX a QX. do particularly strong [indiscernible] that out given part, we to what that's in very the Mel, experienced be second to want to so And

Francis Conforti

just take as that Matt, get keep one try going and question then part, we happy forward, Yes. as and many so ask will can try it and we to to I I'm second the possible. in

it profit yes, to in the lower of quarter be by gains rate, what As biggest we against fourth can that relates Urban obviously, But year. driven very be rate gross third margin, markdown by Outfitters who to from driver a IMU. would XXX basis similar think largely points would the driven a high up previous we delivered the we quarter show the is being

of the the lower entering to improved improvements, rate much year-over-year is Outfitters contribute basis. most a in will inventory markdown store believe they to specifically of with Urban channel, a mentioned, see we sales quarter and continue on balance Shea which As to each

Operator

Paul One of the for will our from next with moment that Citi. come line question. Lejuez And

Paul Lejuez

your Can as goal the store you're what early openings thinking -- year, about thoughts and for you Nuuly about Outfitters Urban specifically both XXXX? the you and goals the think for next what's growth closings closings, give maybe curious are how about

Richard Hayne

want you give? Do to

Shea Jensen

Shea. our have its at Paul, a estate start. lot with particularly, of can I portfolio. Well, Urban, flexibility real we

footprint profitability, it's the product goal think for I of and really years, our aligning and strategies, really leases really the within top most ensuring line and mitigating locations where footprint store we with our driving our pressure few size, better next rightsize store we any our we align and optimal where evaluating years, shop are means sure over the our actively of over in our we available, our come and X of productivity those our sure then markdown making fact, which stores. recalibrate the they with customers half to and will are more average In rightsize making to lens through reduce the

I to looking some may and better is will smaller closures, that like a footprint as relocations relocating that in downsizes, some cases, end well. mean think some it actually some up

Richard Hayne

to stores? do give Mel, of you number the want And

Melanie Marein-Efron

say would just very similar. it's I Absolutely.

Outfitters, brands plans. look Urban 'XX. haven't the produces in modeling, openings other We in would say more direction our We'll But of will call. FY quarter on their the fourth as very for outside for store finished similar give I earnings the

David Hayne

bottom just by growth feedback as in to by about year. and Very thinking the next efficiency our profit. find next fixed brand on about more good feeling excited in year and of mid-double-digit customer rate continue We're more the and that deliver more the that as to excited from we're seeing well and future encouraged growth the growth line. about goals. very to year, leverage next a we're for to the awareness growth costs the the Paul, seeing Nuuly the jump

So we're Nuuly excited about the growth.

Operator

that next Morgan will Stanley. come for our the of Straton moment line And One Alex question. from with

Alexandra Straton

wanted Congrats Free here nice on a to People. focus quickly quarter. on I

looks bit guide is out the quarter-over-quarter. of higher And it like the I trends in a quarter. called discounting in sales forward slowdown think then you little a activity

what's with going of for on me? kind impact just on you going can So -- that banner

Sheila Harrington

Sure. It's Sheila.

with at continue a look People's The We're at Free results against from we price. multi-step -- be strong up remains pleased pleased year. to last rank really business when are consistently year We margin our fantastic year.

So keep long lot learnings, a when like we fashion address we -- us move in the quickly, healthy to will term. we've that address quickly moved and of

gaining and focused active expectations, we we're People, assortment area any Free have the at look with customer, retaining exceeding I that our our producing frankly. when is customer meaning around we're on So

quick moving been sort where learnings clearly and is of small them on just So we've focused.

Richard Hayne

slightly don't his last it which I People, against markdown remains of he they Frank completely markdown markdown Alex, rate know in had gave our unsustainable. commentary, if Free you was even higher QX when but and rate is a of brands, lowest though any the rate And year a up heard

any so markdown rate. And I there's their issue think with don't

Operator

One with moment from line of Baird. for our Mark next Altschwager question and the that come will

Mark Altschwager

you Movement, the rate about sustainable be Free On And People as Any think term? accretive a would range view in Free do color growth overall? medium brand the helpful. margins, the People in to is we as there Movement XX%

Sheila Harrington

handle. I Yes, can

separate, want our do Free is People. to can't brand don't growth wholesale to to the and this We growth. Movement gaining our as and to think FP contribute sorry, that see store top area. growth We we're no continue number, opportunity new company. reason a customer with double-digit large to versus continue believe specialty -- that There's we count commit line a through business our within store store but our as I increasing growing our well that

Operator

from the moment come with next and will Telsey Telsey One Group. Dana line our Advisory of for question that

Dana Telsey

As about you division markdowns the opportunity particularly inventory opportunity that margin the do do level margin and mentioned ordering plan you you and from those see of gross compares. the the had at for in see given And how there, the Where the Urban markdowns, improving, initiatives? for you with look gross Outfitters at we are the the then journey? What initiative. from there forward going cross-functional

Francis Conforti

fourth final be and Honestly, into question, number. journey that supported the deliver organizations here drivers the into probably proud improve goal points. year It's that we X-year really, as the drive that get This for setting of for really Frank. litany ourselves call, much that the to growth, just you we've meaningful to IMU to detail Really just IMU that of of confident in continue growth. a but can too your to our close XXX fourth is not drivers, delivering cross-functional know, a on quarter. we that growth brands we're basis by sourcing There's by used hit to in going we're quarter. the Thanks And report out to Dan. think the we're

it of inventory planning as the season. the wanted the markdowns, third the we our key and some planning the in Obviously, protect we solely us think here elevated receipts. sort we earlier bringing of a just brands with about protect quarter, East holiday was forward. it about inventory and planned are to knew on honestly know to going We As Coast which to items slightly strike relates sales line to basically just was I close all little here be in

as going to in So plan markdowns. be items we to we not in some hurt did line we sales play it inventory But and earlier. with expect bring forward,

Operator

Retail that Shapiro line moment with of Tracker. Marni the One from for our and next will The come question,

Marni Shapiro

-- out The a Anthropologie. Black -- just please absolutely ask They're And little Anthropologie a apparel, some is are they're you Congratulations. of some Friday wanted about single case in -- every on the other from great things of but levels Can including stores I list, found gift stunning. the you're to about and here. have a list, gift absolutely And stunning week. gift stunning. every just bit own, there, list every single it single have I my away I at forget doing. you talk

daily and it. no actually I about fantastic, practice looks one's think really talking

Your well. to has out me handbag really as assortment stood

into a bit Could what's successful You're to. of used the you already excited. getting of brands you get you're edges about even where kind different little the tweaking more store just around than to talk

Richard Hayne

It sounds influencer. like want an become you to

Marni Shapiro

be to life. next want I my in TikTok famous. Yes,

Richard Hayne

to Tricia, do want answer you it.

Tricia Smith

Yes, out our that of been think, some They've you categories you much. the the that a the Marni, categories only really of our our focused the thank assortment, as came most strategies that kind assortment to some product I'm so round during team. gift acending last really ideas, I mentioned, particular we're nuanced our not for around the modernizing proud and years from But well can on holidays. known X honestly incredibly of for. become and smaller compelling of

has Our accessories expansion gone in store. extremely well

is in well. shoes not as growth a of footprint our about growing the you and gift become considerably and in handbags and a giving category accessories it's part So very strong shoe over stores of but both has stores, assortment online. have only our as very compelling We mentioned, now business, also XX

we've very, daily practice, pleased with. tremendously. It's been very growing In

is responding Our the to. are day the evolving customer assortment. They're from what teams every learning product

We have some nice practice growth plans daily overall. for

time comments. some having So holidays and so nice your results far. good We're positive a and very much for thank you enjoying

Operator

And next will One Associates. moment line Research of JJK that the with our come question. Kloppenburg from for Janet

Janet Kloppenburg

Thanksgiving. Frank then Thank some forward. questions. spending going are if I'd And is. to mid-single-digit I how say, in I for all confusion be quick third Congrats marketing quarter like you delighted have past. on you so love felt who is in seems because And all and say wondering really you of understand I'm maintained One things going. And elaborate you Melanie, investment I it brands. level hear the will either the Everybody. on that exactly and customer much, X everything, helping or Urban this to was that have happy Outfitters that across

Shea Jensen

during to we brand. welcoming we've or those post college more that is XX now And are a that perspective X that ages Outfitters' from It's us to XX of are intuitive Roughly identified think segments, different Urban deep I pre-college, Shea. and understanding and been for we what's ages young and gaining customer. Yes, a on and people age. the aspire of the team coming laser-focused that established has be on much customers really are XX We are our college.

are Our suburban we that and across name that in customers. And all country we urban urban indicates recognize of people think I sort serve this young communities.

broaden I and I be consumer to think fire would just reach bit welcoming But focused a before, our and really more that so during after we're bit. have on younger And we a college. say

Melanie Marein-Efron

plans, just about or Janet, question, a grow on in And based SG&A QX growth. mid-single-digit sales second growth we line rate answer our at our would to your think with that

Operator

from line And have that Wells X show the will Ike Fargo. question, come of and final with do I that we Boruchow

Irwin Boruchow

at hundreds the on or Is flow direction. can help way, -- to profitability to if On points clearly get historic of of if business, Frank in right if there company clearly gross the used to operating that mean if cash what gross margin? there. comment total could know, UO points margin improvement Or on to to through. to any corporate is you're the the to flows norms, Mellon And Curious you're positive a that business now don't basis I then point? able to it how it's more How for cash the this Nuuly, I many margin starting the the get would you guess scale? just move basis mean many does back be that frame able

Richard Hayne

question, Thanks for Ike. the

cash yet no future and positive subscriber causes of positive. to But were we that company. cash is In we if our had flow The terms inventory be what about as flow that not not future cash are of have cash for interesting buy we still not would we to ahead business growth, buying growth. growth, yes, because we is us flow, thing be positive flow a inventory

learning. cash the potential we on retail be we dealt not encouraged are the all positivity, think and next with it's an much being been business, as we've there a But in the rental with interesting flow deal we said, business. that about dynamic in So that we're can we there's that excited making progress It's and year. which

So near future, it's in exactly some sure it. point we our line sight. not And but nearing are in the much at we're very when, of

Francis Conforti

we do third in in job that continue to question, And a MMU while driving great rate think Outfitters on on quarter. so last they has recognize the done fourth I team your the and is quarter, the can that the knocking and the want improvement team next off wood, brand to meat to to the sales is on continue for on begin positive the bone job then year. that not realize the and There's yet. still throughout MMU to leverage start more left drive to we hopefully expenses. improvement done hit tax Urban

And year. sales. opportunity top for moving still the we'll be going as line next profitability, second left then there's return of said, So into MMU we leg the the

Richard Hayne

happy that I Okay. the very joining. very, very, a guess Have Thanksgiving. concludes today. for call Thank you all

Operator

This concludes for Thank today's program. you all participating.

now disconnect. may You

Urban Outfitters (URBN) 26 Nov 242025 Q3 Earnings call transcript