Urban Outfitters Delivers Record-Breaking Q1 Results, Exceeds Expectations
The Urban Outfitters, Inc. has announced a record-breaking first quarter for fiscal 2026, exceeding expectations in both sales and profits. The company's Q1 results were highlighted during its recent conference call on May 21, 2025.
According to the company's press release, total URBN sales grew by 11%, hitting a Q1 record of $1.3 billion. This impressive growth was driven by a 5% increase in the Retail segment comp, as well as positive sales comps across all brands. In fact, four out of the company's five brands delivered record first-quarter sales, with Urban Outfitters posting its first positive sales comp in quite some time.
Urban Outfitters' strong performance was also evident in its gross profit, which saw a 20% increase to reach a record $489 million. The gross profit rate improved nicely by 278 basis points, including nonrecurring benefits of 74 basis points. This impressive improvement was largely driven by better gross margins across all segments, as well as lower markdowns.
Additionally, the company's SG&A increased by 8.1%, but leveraged by 65 basis points. The growth in SG&A dollars was primarily driven by increased marketing spend, which fueled sales growth for all brands. This effort drove increases in traffic and transactions both in stores and online for total URBN, while Nuuly's campaigns resulted in healthy double-digit growth in average active subscribers.
The overall impact of these efforts was seen in the company's operating income, which rose by 72% compared to last year, reaching $128 million. The operating profit rate improved by over 340 basis points to 9.6%, and net income saw a 75% increase to $108 million or $1.16 per diluted share.
Francis Conforti, Co-President and COO of Urban Outfitters, highlighted the strong performance across all brands during the conference call. He noted that Nuuly delivered impressive revenue growth of 60%, with a 53% increase in average active subscribers. The Wholesale segment also saw a 24% revenue increase driven by a healthy rise in full-price sales at Free People.
Conforti also praised the Anthropologie team for their fantastic quarter, achieving a 7% increase in their Retail segment comp. This marks four consecutive quarterly positive comps and was fueled by equal strength in both digital and store channels. Every category saw positive regular price and total sales comps, with strong performance across all apparel categories.
The company's recent launch of Celandine, an exclusive resort wear label, has also exceeded expectations. Alongside this, Daily Practice and the expanded assortments of intimates and loungewear are seeing impressive growth, and could become significant categories in the future.
