Urban Outfitters, Inc. FY'26 Q3 RESULTS Introduction Urban Outfitters, Inc. "URBN" is providing fiscal 2026 third quarter commentary ahead of our earnings call scheduled for November 25th at 5:00pm. We remind you that any forward-looking statements made in this commentary are subject to our safe harbor statement found in our SEC filings. Our third quarter earnings release and related financial information are available on our website, www.urbn.com. As used in this document, unless otherwise defined,"Anthrop ...

Core Insights - The apparel and home goods retailer reported increased earnings and revenue for the third quarter [1] Financial Performance - The company achieved higher earnings in the third quarter compared to previous periods [1] - Revenue also saw an upward trend during the same quarter [1]

The clothing retailer's third-quarter results topped estimates, and management said it picked up a bigger share of the apparel market. ...

Core Insights - Urban Outfitters, Inc. reported record net income of $116.4 million and earnings per diluted share of $1.28 for the three months ended October 31, 2025, with a total net income of $368.7 million and earnings per diluted share of $4.01 for the nine months ended October 31, 2025 [1][11]. Financial Performance - Total Company net sales for the three months ended October 31, 2025, increased by 12.3% to a record $1.53 billion, while net sales for the nine months increased by 11.5% to $4.36 billion [2][3]. - Retail segment net sales increased by 9.6% for the three months and 8.0% for the nine months, with comparable Retail segment net sales rising by 8.0% [2][3]. - Subscription segment net sales surged by 48.7% for the three months and 53.4% for the nine months, driven by a significant increase in average active subscribers [2][3]. Segment Performance - Comparable Retail segment net sales growth was driven by Urban Outfitters (12.5%), Anthropologie (7.6%), and Free People (4.1%) for the three months ended October 31, 2025 [2]. - For the nine months, comparable Retail segment net sales increased by 6.8% at Anthropologie, 6.4% at Urban Outfitters, and 4.7% at Free People [3]. Profitability Metrics - Gross profit for the three months ended October 31, 2025, increased by 13.3% to $563.3 million, with a gross profit rate improvement of 31 basis points [6][7]. - For the nine months, gross profit dollars rose by 15.7% to $1.62 billion, with a gross profit rate increase of 135 basis points [6][7]. Expenses and Taxation - Selling, general and administrative expenses increased by 13.7% for the three months and 11.5% for the nine months, primarily due to increased marketing expenses [9]. - The effective tax rate decreased to 23.6% for the three months and 22.2% for the nine months ended October 31, 2025, compared to the previous year [10]. Share Repurchase and Expansion - The company repurchased 3.3 million shares for approximately $152 million during the nine months ended October 31, 2025, with 14.7 million shares remaining under the repurchase program [12]. - Urban Outfitters opened 41 new retail locations and closed 6 during the nine months ended October 31, 2025 [13].

Core Viewpoint - H&M is closing two large stores in Manhattan as part of a global cost-cutting strategy, which will add significant retail space to the market in New York City [1][2]. Group 1: Store Closures - H&M will close its stores located at 18 Church St. at the World Trade Center and 150 E. 86th St. in January, resulting in a total of 55,000 square feet of retail space becoming available [1][3]. - After these closures, H&M will retain eight locations in New York City [2]. Group 2: Global Strategy - The closures in Manhattan are part of H&M's broader plan to shut down approximately 200 of its more than 4,300 stores worldwide as a measure to reduce costs [2].

Core Insights - American Eagle's shares increased by approximately 3% following the announcement of Martha Stewart as the new face of the brand, succeeding the controversial campaign featuring Sydney Sweeney [1][2] - The new "Give Great Jeans Campaign" features Stewart in a full denim outfit, aimed at capturing attention during the holiday shopping season [1][3] Marketing Strategy - American Eagle has adopted bold marketing strategies, as highlighted by the choice of Martha Stewart, which aligns with the brand's current direction [2] - The previous campaign featuring Sydney Sweeney faced criticism for its wordplay, which some found inappropriate, indicating the brand's willingness to take risks in its marketing approach [2][6] Brand Image and Target Audience - Martha Stewart's persona is seen as resonating with a younger audience, showcasing her ability to remain relevant despite her age [4] - Stewart's diverse promotional history, including products like CBD gummies and collaborations with celebrities, reinforces her adaptability as a brand ambassador [5] Controversies and Challenges - American Eagle faced backlash from the previous campaign with Sydney Sweeney, which was accused of promoting eugenics, highlighting the potential risks associated with celebrity partnerships [6][7]

Core Insights - Abercrombie & Fitch Co. (ANF) reported strong third-quarter fiscal 2025 results, with both top and bottom lines exceeding Zacks Consensus Estimates, although the bottom line showed a year-over-year decline [1][10] Financial Performance - Earnings per share (EPS) for the fiscal third quarter was $2.36, a decrease of 4.5% from $2.47 in the same quarter last year, but above the Zacks Consensus Estimate of $2.14 [1][10] - Net sales reached $1.291 billion, reflecting a 7% year-over-year increase on a reported basis and a 6% increase on a constant-currency basis, surpassing the Zacks Consensus Estimate of $1.275 billion [2][10] - Comparable sales improved by 3%, driven by broad-based net sales growth across most regions and exceptional performance from the Hollister brand [2][3] Brand and Regional Performance - The Hollister brand saw a 16% increase in sales to $673.3 million, while Abercrombie brand sales fell 2% to $617.3 million [6] - Sales in the Americas increased by 7% to $1.1 billion, while EMEA sales also grew by 7% to $194.5 million; however, APAC sales dipped by 6% to $38.7 million [5] - Comparable sales rose by 4% in the Americas and 2% in EMEA, but fell by 12% in the APAC region [5] Margins and Expenses - Selling expenses increased by 9.1% year over year to $459.5 million, representing 35.6% of sales, an increase of 80 basis points [7] - General and administrative costs rose by 2.8% to $193.4 million, accounting for 15% of sales, a decrease of 60 basis points [7] - Operating income was reported at $155 million, down 12.6% from $177.4 million in the previous year, with an operating margin of 12%, a decline of 260 basis points [8] Financial Health - At the end of the fiscal third quarter, the company had cash and cash equivalents of $605.8 million and stockholders' equity of $1.32 billion [9] - The company reported liquidity of $1.1 billion, including cash and equivalents and available borrowing under the ABL Facility [11] Share Repurchase and Outlook - In Q3, the company repurchased approximately 1.2 million shares for about $100 million, with a total of 4.5 million shares repurchased year-to-date for $350 million [12] - For Q4 fiscal 2025, net sales are projected to rise by 4-6% from the previous year's $1.58 billion, with EPS expected between $3.40 and $3.70 [13] - For fiscal 2025, the company anticipates sales growth of 6-7%, an increase from the previously expected 5-7%, and an operating margin of 13-13.5% [14][15]

Market Overview - Major U.S. equities indexes experienced gains, with the Dow Jones Industrial Average up over 1%, the S&P 500 climbing 0.5%, and the Nasdaq increasing by 0.1% [1] Retail Sector Performance - Kohl's (KSS) shares surged 35% after reporting a surprise third-quarter profit and appointing Michael Bender as permanent CEO [2] - Abercrombie & Fitch (ANF) saw a 30% increase in shares after exceeding third-quarter earnings estimates, with sales growth expected to be driven by the Hollister brand during the holiday season [3] Technology Sector Developments - Zoom Communications (ZM) reported quarterly results that surpassed analysts' expectations, resulting in a 12% rise in shares, attributed to meaningful adoption of its AI offerings [4] - Nvidia (NVDA) shares fell nearly 4% following reports that Meta Platforms is considering using chips from Alphabet, impacting Nvidia and its competitor AMD negatively [5] Cryptocurrency and Commodities - Coinbase (COIN) and other cryptocurrency-related stocks continued to decline as Bitcoin's price dropped to around $87,200, while gold prices rose and crude oil futures decreased [6]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for American Eagle Outfitters (AEO) despite an increase in revenues when it reports its results for the quarter ended October 2025 [1] Earnings Expectations - The consensus EPS estimate for the upcoming report is $0.43 per share, reflecting a year-over-year decrease of 10.4% [3] - Expected revenues are projected to be $1.32 billion, which is an increase of 2.3% compared to the same quarter last year [3] Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 0.36%, indicating a reassessment by analysts [4] - The Most Accurate Estimate for American Eagle is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +1.55% [12] Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10] - American Eagle currently holds a Zacks Rank of 2, suggesting a likelihood of beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, American Eagle exceeded the expected earnings of $0.20 per share by delivering $0.45, resulting in a surprise of +125.00% [13] - Over the past four quarters, the company has beaten consensus EPS estimates three times [14] Market Reaction Considerations - An earnings beat or miss may not solely dictate stock price movements, as other factors can influence investor sentiment [15] - It is advisable to consider a company's Earnings ESP and Zacks Rank prior to quarterly releases to enhance investment success [16]

Core Insights - Abercrombie & Fitch reported revenue of $1.29 billion for the quarter ended October 2025, a year-over-year increase of 6.8% [1] - The company's EPS for the same period was $2.36, down from $2.50 a year ago, but exceeded the consensus estimate of $2.14 by 10.28% [1] - The revenue surpassed the Zacks Consensus Estimate of $1.27 billion, indicating a surprise of 1.26% [1] Financial Performance Metrics - Total comparable store sales increased by 3% year-over-year, slightly below the four-analyst average estimate of 3.5% [4] - Hollister brand comparable store sales saw a significant increase of 15%, outperforming the three-analyst average estimate of 10% [4] - Abercrombie brand comparable store sales decreased by 7%, which was worse than the average estimate of -4.4% [4] Brand Performance - Net sales for the Hollister brand reached $673.27 million, exceeding the average estimate of $638.14 million, representing a year-over-year change of 16.3% [4] - Abercrombie brand net sales were reported at $617.35 million, slightly below the average estimate of $632.66 million, reflecting a year-over-year decline of 2% [4] Stock Performance - Abercrombie's shares have returned -11.2% over the past month, compared to a -1.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]