Financial Data and Key Metrics Changes - Total sales grew by 11%, reaching a record of $1.5 billion for Q2 [6][8] - Net income increased by 22%, setting a new Q2 record of $144 million or $1.58 per diluted share [11][6] - Gross profit dollars rose by 15% to $566 million, with a gross profit rate improvement of 113 basis points to 37.6% [10][11] - Operating income increased by 20% to $174 million, with an operating profit rate improvement of 85 basis points to 11.6% [11] Business Line Data and Key Metrics Changes - Nuuly achieved a record revenue growth of 53% and a 48% increase in average active subscribers [9][18] - Anthropologie reported a 6% increase in retail segment comps, marking over four years of consecutive positive comps [11][12] - Free People delivered a 14% increase in total revenue, driven by a 7% retail segment comp and a 19% increase in wholesale segment revenues [14][17] - Urban Outfitters brand in North America saw a 4% comparable sales increase, with double-digit comp growth in Europe [26][28] Market Data and Key Metrics Changes - Urban Outfitters Europe achieved an 11% comparable sales increase in the retail segment [27] - The North American business showed sequential improvement with positive results in both channels [28] - Nuuly's subscriber growth contributed significantly to total URBN sales, adding four percentage points to revenue growth [18] Company Strategy and Development Direction - The company is focused on brand-led growth, enhancing customer engagement, and expanding product offerings [13][29] - There is a strategic emphasis on mitigating tariff impacts through vendor negotiations and diversifying sourcing [23][60] - Plans to open approximately 69 new stores while closing 17, with a focus on expanding Free People and Anthropologie brands [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff challenges and achieving gross margin improvements [23][44] - The company anticipates high single-digit sales growth for Q3, driven by strong consumer demand and effective execution [52] - Management highlighted the importance of maintaining customer experience while implementing gentle price increases [60][74] Other Important Information - The company plans to invest in logistics expansion for Nuuly to support its growth [20] - Marketing efforts are expected to increase in the second half of the year, particularly for brand campaigns [45][110] Q&A Session Summary Question: Impact of tariffs on growth and pricing strategies - Management discussed a four-pronged approach to mitigate tariff impacts, including negotiating better vendor terms and adjusting transportation methods [56][60] Question: Performance of proprietary brands versus national brands - Proprietary brands at Anthropologie are growing at double digits, with owned brands making up about 71% of total business [62][63] Question: Pricing strategy amidst tariff pressures - The strategy involves gentle price increases while protecting opening price points to maintain customer accessibility [71][74] Question: Consumer health and trends observed - Management noted positive consumer behavior with increased traffic and transactions, although average order value decreased due to a shift in category mix [90] Question: Profitability outlook for Urban brand - Management indicated that while significant progress has been made, a return to profitability for the Urban brand is not expected this year [105]