Urban Outfitters Inc. (URBN) reported fiscal fourth‑quarter 2026 results that surpassed revenue expectations and delivered a strong adjusted earnings per share beat, while GAAP earnings fell short of consensus. Total revenue reached $1.80 billion, a 10.1% year‑over‑year increase that exceeded the $1.79 billion consensus estimate. GAAP diluted earnings per share were $1.05, below the $1.24–$1.26 consensus, but adjusted diluted EPS rose to $1.43, beating the $1.26 estimate by $0.17 or 13.3%.
Revenue growth was driven by a mix of solid performance across the company’s three operating segments. Retail net sales increased 5.5% to $1.12 billion, supported by a 9.6% rise in comparable sales for the core Urban Outfitters brand and a 5.5% lift in wholesale net sales. The subscription segment, represented by Nuuly, saw net sales grow 42.6% to $160.5 million, while wholesale net sales rose 9.1%. Gross profit margin expanded to 36.8%, up 31 basis points, as lower markdowns and occupancy leverage offset the impact of higher tariff‑related costs.
The adjusted EPS beat was largely a result of disciplined cost management and a favorable mix shift toward higher‑margin segments. While the company recorded a $46 million charitable contribution that reduced GAAP earnings, the underlying operating performance—particularly the strong contribution from Nuuly and the improved gross margin—supported the adjusted figure. The GAAP miss reflects the one‑time charitable expense and the continued pressure from tariff‑related cost increases, which the company has been mitigating through pricing adjustments and supply‑chain efficiencies.
Nuuly’s performance remains a key growth engine. The subscription service reached just under 400,000 average active subscribers, up 40% year‑over‑year, and its net sales growth of 42.6% reflects successful customer acquisition and retention strategies. Although the report does not provide a profit figure for Nuuly, the segment’s revenue growth and subscriber expansion underpin the company’s outlook for continued double‑digit growth in the subscription space.
Management guided for a mid‑single‑digit comparable sales growth in the Retail segment for fiscal 2027, with high single‑digit growth expected for the Urban Outfitters brand, mid‑single‑digit for Free People, and low single‑digit for Anthropologie. The Subscription segment is projected to deliver mid‑double‑digit revenue growth, while Wholesale is expected to grow in the mid‑teen range. These guidance figures signal confidence in the company’s ability to sustain momentum across all channels despite tariff headwinds and SG&A expansion.
CEO Richard A. Hayne said the company was pleased to report record sales and operating profits driven by strong results across Retail, Subscription, and Wholesale. CFO Frank Conforti highlighted operational focus, creative execution, and tariff‑mitigation efforts as key contributors to the quarter’s performance, while CFO Melanie Marein‑Efron emphasized product innovation and strategic marketing as drivers of future growth.
Investors responded positively to the revenue beat and the adjusted EPS beat, which underscored the company’s ability to generate robust underlying earnings despite the GAAP miss. The market reaction reflected confidence in the company’s strategic focus on high‑margin segments, the continued expansion of Nuuly, and the management’s guidance for sustained growth in fiscal 2027.
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