PHILADELPHIA - Urban Outfitters, Inc. (NASDAQ:URBN) today reported a robust first quarter, with adjusted earnings per share (EPS) of $0.69, surpassing analyst expectations by $0.16. The company's revenue also exceeded forecasts, reaching $1.2 billion against the consensus estimate of $1.18 billion.
This performance represents a 7.8% increase in total net sales compared to the same period last year, signaling strong growth for the lifestyle retailer.
The company's stock surged 8.28% in response to the earnings release, indicating a positive investor reaction to the news. Chief Executive Officer Richard A. Hayne attributed the record first-quarter sales and earnings to the continued strength of the Anthropologie, Free People, FP Movement, and Nuuly brands. "Customer demand remains robust for our spring and summer fashion, which bodes well for continued sales growth in Q2," said Mr. Hayne.
Urban Outfitters' success this quarter was driven by a significant 51.4% increase in Nuuly segment net sales, fueled by a 45% rise in average active subscribers. The Retail segment also saw growth, with net sales up 5.8% and comparable Retail segment net sales rising by 4.6%. The Free People brand led this segment with a 17.1% increase, followed by Anthropologie at 10.4%, while Urban Outfitters experienced a 13.7% decrease.
The company's adjusted gross profit rate improved by 106 basis points compared to last year, primarily due to higher initial merchandise markups across all brands. This was partially offset by higher merchandise markdowns at the Urban Outfitters brand and a deleverage in logistics expenses related to the expansion of the Nuuly fulfillment facility.
As Urban Outfitters looks ahead, the company's focus on cross-functional initiatives to improve merchandise markups and the expansion of the Nuuly brand are expected to continue driving growth. With inventory levels managed effectively, showing a 1.9% decrease from the previous year, the company is in a strong position to capitalize on market opportunities.
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