Financial Data and Key Metrics Changes - Total debt reduced from approximately $319 million to approximately $120 million, with maturity extended to 2029 [4] - Revenue for Q3 2025 was $87.6 million, up 15.4% year-over-year, and up 8.3% quarter-over-quarter [19] - Adjusted EBITDA for Q3 2025 was $4.3 million or 4.9% of revenue, down from $9.3 million or 12.3% of revenue in Q3 2024 [22] - Free cash flow for Q3 2025 was negative $13.6 million, compared to negative $3.4 million in Q3 2024 [22] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue increased by $10.7 million or 16.1% year-over-year in Q3 2025, driven by higher average subscribers and average revenue per subscriber [19] - Inventory-related cancellations decreased by nearly 30% year-over-year in Q3 [5] - Revenue per subscriber increased, primarily due to a price increase and changes to late fee policies [8] Market Data and Key Metrics Changes - Ending active subscribers grew by 12.4% year-over-year, reaching 148,916 [18] - Average active subscribers during Q3 were 147,645, an increase of 12.9% year-over-year [18] - Customer engagement metrics such as net promoter score and app visits increased significantly, with average visits per subscriber up 34% year-over-year [6][7] Company Strategy and Development Direction - Focus on strategic recapitalization to strengthen the balance sheet and return to growth through inventory strategy and product innovation [4] - Emphasis on improving customer acquisition through organic community-driven channels and enhancing customer experience [12] - Plans to activate community engagement and leverage customer advocacy for growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved growth momentum and customer engagement [24] - Anticipated continued strong revenue growth in Q4 2025, with guidance for revenue between $323.1 million and $325.1 million for fiscal year 2025 [23] - Management acknowledged challenges with cash consumption due to inventory investments but expects improved cash flow generation over time [17] Other Important Information - The company has made significant changes to its app to enhance customer experience, resulting in increased engagement [9] - The introduction of community-driven content and ambassador programs has generated substantial impressions and referrals [13] Q&A Session Summary Question: What are the expectations for revenue growth in Q4? - Management expects revenue to be between $85 million and $87 million for Q4 2025 [23] Question: How is the company managing cash flow amid increased inventory investments? - Management noted that cash consumption has increased due to inventory investments but expects improved cash flow generation in the future [17]

Financial Data and Key Metrics Changes - Total revenues grew by 12%, reaching a record $1.5 billion for Q3 [6][4] - Net income increased by 13% to a new Q3 record of $116 million, or $1.28 per diluted share [6][8] - Gross profit dollars rose by 13% to $563 million, with a gross profit rate improvement of 31 basis points to 36.8% [7][8] - Operating income increased by over 12% to $144 million, maintaining the operating profit rate consistent with the prior year [8] Business Line Data and Key Metrics Changes - Free People brand revenue increased by 9%, driven by a 9% increase in retail segment sales and an 8% increase in wholesale segment revenues [9][10] - Urban Outfitters brand recorded a strong 13% global retail segment comp, with North America at 10% and Europe at 17% [11][12] - Nuuly brand revenue grew by 49%, driven by a 40% increase in average active subscribers [14][15] - Anthropologie Group achieved an 8% retail segment comparable sales increase, marking the 19th consecutive quarter of positive comparable sales [18][19] Market Data and Key Metrics Changes - All brands produced positive comps across all geographies, with Urban brand generating double-digit comps in North America and Europe [4][6] - The wholesale segment delivered an 8% increase in revenue, primarily from specialty store accounts [7] Company Strategy and Development Direction - The company is focused on scaling the Nuuly business and building brand awareness through investments in logistics and strategic marketing [15] - There is a commitment to maintaining opening price points and protecting the integrity of product pricing while managing costs [40][41] - The Anthropologie Group is modernizing its product assortment and investing in own brands to drive growth [20][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record sales and operating profit for the year, despite tariff headwinds [16][17] - The company anticipates a competitive holiday season but expects to maintain improved operating margins compared to the previous year [34] - November traffic and sales are running slightly ahead of the stated Q4 plan, indicating a positive outlook [33] Other Important Information - The company plans to open approximately 69 new stores and close about 17 this year, with significant growth expected from FP Movement, Free People, and Anthropologie [30] - Tariffs are expected to impact gross margin rates, with ongoing mitigation efforts in place [16][29] Q&A Session Summary Question: Follow-up on pricing strategy and customer reaction - Management indicated that small price increases have seen little to no resistance, with a focus on maintaining opening price points [39][40] Question: Own brand penetration and global footprint - Own brand penetration has increased significantly, with plans for continued growth and expansion in the U.K. and North America [47][48] Question: Urban Outfitters brand profitability - Urban Outfitters achieved profitability in Europe and reduced losses in North America, with potential for global profitability next year [55] Question: Drivers of business acceleration and holiday trends - Increased traffic in stores and online is driving sales growth, with expectations for a strong holiday season despite a more promotional environment [60][61] Question: Gross margins and promotional expectations - Management maintains guidance for gross profit margin improvement despite anticipated promotions during the holiday season [75] Question: Long-term EBIT margin targets - The company targets a long-term EBIT margin of 10%, with several growth opportunities identified across brands [78][79]

Financial Data and Key Metrics Changes - Total revenues grew by 12%, reaching a record $1.5 billion for Q3 [6][4] - Net income increased by 13% to a new Q3 record of $116 million, or $1.28 per diluted share [8][4] - Gross profit increased by 13% to $563 million, with a gross profit rate of 36.8% [7][8] - SG&A expenses rose by 14%, leading to a deleveraging of 32 basis points [7][8] Business Line Data and Key Metrics Changes - Free People brand revenue increased by 9%, driven by a 9% increase in retail segment sales and an 8% increase in wholesale segment revenues [9][10] - Urban Outfitters brand recorded a 13% global retail segment comp, with North America at 10% and Europe at 17% [11][12] - Nuuly brand revenue grew by 49%, driven by a 40% increase in average active subscribers [14][15] Market Data and Key Metrics Changes - The wholesale segment saw an 8% increase in revenue, primarily from specialty store accounts [7][8] - European operations for Free People delivered double-digit retail segment comps, indicating strong market performance [9][10] - Urban Outfitters achieved positive double-digit comps across all major product categories in Europe [13][14] Company Strategy and Development Direction - The company aims to deliver record sales and operating profit for the year, with a focus on maintaining gross and operating profit margin improvements despite tariff headwinds [16][17] - Strategic investments in logistics and marketing for Nuuly are expected to continue driving subscriber growth [15][16] - The Anthropologie Group is focusing on product modernization and customer growth, with plans to open new stores and enhance digital capabilities [24][25] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in consumer behavior, with customers waiting longer for promotions, which is expected to impact holiday sales [34][35] - The company anticipates a competitive holiday season but remains optimistic about achieving improved operating margins [34][35] - Management expressed confidence in the diversified business model's ability to grow market share regardless of the operating environment [33][34] Other Important Information - The company plans to open approximately 69 new stores and close about 17 this year, with significant growth expected from FP Movement, Free People, and Anthropologie [30][31] - Tariffs are expected to impact gross margins, with estimates of a 60 basis point impact in Q3 and 75 basis points in Q4 [15][16] Q&A Session Summary Question: Follow-up on pricing strategy and customer reaction - Management stated that small price increases have been implemented strategically, with little to no price resistance observed [39][40] Question: Own brand penetration and global footprint for Anthropologie - Own brand penetration has increased by over 100 basis points, with plans for continued growth and expansion in the U.K. [47][48] Question: Urban Outfitters brand profitability outlook - Urban Outfitters is expected to continue improving profitability, with a focus on reducing losses in North America [55][56] Question: Drivers of business acceleration and holiday selling trends - Increased traffic in stores and online has driven sales growth, with expectations for a strong holiday season despite promotional pressures [60][61] Question: Nuuly customer demographics and sales trends - Nuuly has seen a slight shift towards younger subscribers, with stable demographics overall [68][69]

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]