Urban Outfitters(URBN) - 2026 Q1 - Quarterly Report

Sales Performance - Retail segment net sales accounted for approximately 85.0% of consolidated net sales for the three months ended April 30, 2025, down from 88.5% for the comparable period in fiscal 2025 [81]. - Subscription segment net sales accounted for approximately 9.4% of consolidated net sales for the three months ended April 30, 2025, compared to approximately 6.5% for the comparable period in fiscal 2025 [94]. - Wholesale segment net sales accounted for approximately 5.6% of consolidated net sales for the three months ended April 30, 2025, compared to 5.0% for the comparable period in fiscal 2025 [95]. - Net sales for the first quarter of fiscal 2026 were $1.33 billion, an increase of$ 128.8 million from $1.20 billion in the first quarter of fiscal 2025 [101]. - Retail segment comparable net sales increased by 4.8%, driven by higher store traffic and transactions, with notable increases of 6.9% at Anthropologie, 3.1% at Free People, and 2.1% at Urban Outfitters [102]. - Subscription segment net sales increased by 59.5%, primarily due to a 52.9% increase in the average number of active subscribers [103]. Store Expansion - Total company-owned stores increased from 733 to 744 from January 31, 2025, to April 30, 2025, with 13 new stores opened [89]. - Projected total company-owned stores for fiscal 2026 is expected to reach 780, with 64 new openings planned [93]. - Capital expenditures during fiscal 2026 are anticipated to be approximately$ 240 million, primarily for retail store expansion and technology investments [116]. Inventory and Expenses - Total inventory increased by $84.8 million, or 14.6%, to$ 663.8 million as of April 30, 2025 [105]. - Selling, general and administrative expenses increased by $27.1 million, or 8.1%, but decreased as a percentage of net sales to 27.2% [106]. Profitability - Gross profit increased to$ 489.1 million in the first quarter of fiscal 2026 from $408.4 million in the first quarter of fiscal 2025, with a gross profit percentage of 36.8% [104]. - Income from operations was$ 128.2 million, or 9.6% of net sales, compared to $74.6 million, or 6.2% of net sales, for the same period last year [107]. - The effective tax rate for the first quarter of fiscal 2026 was 21.4%, down from 23.6% in the first quarter of fiscal 2025 [108]. Segment Performance - North American Retail segment net sales for Anthropologie accounted for approximately 48.6% of total Retail segment net sales for the three months ended April 30, 2025, compared to approximately 47.8% for the comparable period in fiscal 2025 [84]. - North American Retail segment net sales for Free People accounted for approximately 23.8% of total Retail segment net sales for the three months ended April 30, 2025, compared to approximately 23.6% for the comparable period in fiscal 2025 [85]. - North American Retail segment net sales for Urban Outfitters accounted for approximately 14.8% of total Retail segment net sales for the three months ended April 30, 2025, down from approximately 16.8% for the comparable period in fiscal 2025 [86]. - Selling square footage for Urban Outfitters decreased by 3.9% from April 30, 2024, to April 30, 2025 [91]. - The Free People brand's selling square footage increased by 4.7% from April 30, 2024, to April 30, 2025 [91]. Future Growth Strategies - The company plans to expand its digital channels both domestically and internationally to drive future growth [92].