Core Insights - Urban Outfitters, Inc. (URBN) reported strong third-quarter fiscal 2026 results, with both earnings and sales exceeding expectations and improving from the previous year [1][4][11] Financial Performance - Earnings per share reached $1.28, surpassing the Zacks Consensus Estimate of $1.19, marking a 16.3% increase year over year [4] - Total net sales increased by 12.3% year over year to $1,529.4 million, exceeding the consensus estimate of $1,493 million [4] - Retail segment sales rose 9.6%, with comparable net sales increasing by 8%, driven by growth in both digital and brick-and-mortar channels [5] - Nuuly, the women's apparel subscription service, saw a significant 48.7% increase in net sales, reflecting a 42.2% rise in average active subscribers [7] Margin and Cost Insights - Gross profit increased by 13.3% year over year to $563.3 million, with gross margin expanding by 31 basis points to 36.8% [8] - Selling, general and administrative (SG&A) expenses rose 13.7% year over year to $419 million, primarily due to higher marketing and payroll expenses [10] - Operating income was $144.3 million, up 12.1% from the prior year, with an operating margin remaining flat at 9.4% [13] Store and Inventory Update - URBN opened 27 retail locations in the fiscal third quarter, while closing six stores [14] - As of October 31, 2025, URBN operated 258 Urban Outfitters stores, 248 Anthropologie stores, and 253 Free People stores [15] - Total inventory increased by 5.9% year over year, with retail segment inventory up 6.3% [16] Fiscal Outlook - The company anticipates strong performance in the fiscal fourth quarter, expecting total sales growth in the high single digits [18] - Gross margins are projected to expand by 25-50 basis points, despite tariff-related declines [20] - For fiscal 2026, URBN expects full-year gross margins to improve by approximately 100 basis points [22]