Urban Outfitters, Inc. (NASDAQ: URBN) has announced a record net income of $143.9 million, or $1.58 per diluted share, for its fiscal second quarter, driven by strong sales growth across its major brands. For the period ending July 31, 2025, total net sales reached $1.5 billion, marking an 11.3% increase compared to the previous year. This achievement represents the highest quarterly sales in the company’s history.
Sales Growth Across Brands
The performance was bolstered by a 5.6% rise in comparable retail sales, with Free People leading the charge at 6.7%. Anthropologie and Urban Outfitters followed with 5.7% and 4.2% growth, respectively. Both in-store and digital channels contributed to this success, each showing mid-single-digit growth. Additionally, the company’s subscription service experienced a remarkable 53.2% increase in sales, largely due to an almost 50% boost in active subscribers. Wholesale revenue also rose by 18.1%, propelled by strong specialty sales from Free People.
For the first half of fiscal 2026, Urban Outfitters reported sales totaling $2.83 billion, up 11% from the same period last year, with all brands and geographic areas posting positive comparable results.
Profit Margins and Operating Expenses
Gross profit for the quarter climbed to $566.2 million, reflecting a 14.8% increase and an improvement in the margin rate by 113 basis points. These gains were primarily attributed to reduced markdowns at Urban Outfitters and better leverage on occupancy costs. Operating expenses rose to $392.1 million, an increase of 12.5%, driven by higher marketing expenditures and payroll to support sales growth. Nevertheless, operating income increased thanks to stronger revenue and enhanced merchandise margins. Gross profit for the six-month period reached $1.06 billion, a 17% increase from the previous year.
CEO Highlights Broad-Based Success
Chief Executive Officer Richard A. Hayne commended the company’s overall performance, stating that “all five brands achieved positive comparable sales across all geographies.” He emphasized that these results underscore both the strength of its brands and the effectiveness of the company’s growth strategy.
Expansion and Share Buybacks
Urban Outfitters is not only focused on sales but also on expanding its presence. The company opened 27 new stores in the first half of the year, including 19 Free People locations (ten of which were FP Movement stores), four Anthropologie stores, and four Urban Outfitters outlets. During the same period, four underperforming stores were closed. Additionally, the company repurchased 3.3 million shares for $152 million under its ongoing buyback program, with 14.7 million shares remaining available for repurchase as of July 31, 2025.
Outlook
With strong momentum across retail, subscription, and wholesale channels, Urban Outfitters enters the second half of the fiscal year with unprecedented financial strength. Factors such as lower markdowns, increased digital engagement, and continued store growth indicate that the company is well-positioned to sustain profitability despite rising marketing and payroll expenses. As Urban Outfitters continues to navigate a competitive retail landscape, its recent performance highlights the effectiveness of its operational strategies and brand strength.
