How did URBN's subscription growth impact Q4 2025 revenue?

Urban Outfitters' (URBN) subscription growth had a significant impact on the company's Q4 2025 revenue, contributing to the overall record sales and profits reported during the quarter.

1. **Subscription Segment Growth**: Nuuly, URBN's subscription segment, experienced a substantial increase in net sales, rising by 55.6% compared to the previous year. This growth was primarily driven by a 53.5% increase in average active subscribers.
2. **Revenue Contribution**: The growth in the subscription segment significantly contributed to the overall revenue of URBN in Q4 2025. The subscription segment's adjusted net sales increase was a key factor in the company's record sales of $1.64 billion during the quarter.
3. **Financial Impact**: The subscription segment's revenue growth had a positive impact on URBN's gross profit, which increased by 16.8%. This improvement in gross profit was part of the broader trend of increased initial merchandise margins, leading to a 300 basis points increase in gross margin to 32.3% in Q4.
4. **Strategic Importance**: URBN's strategic focus on expanding its Nuuly subscription service appears to be paying off, with the company aiming to further expand this segment, targeting a revenue of $500 million. This indicates that the subscription growth is not only contributing to current revenue but also shaping the company's future growth strategy.

In conclusion, URBN's subscription growth was a key driver of its Q4 2025 revenue, enhancing the company's overall financial performance and positioning it for continued growth in the coming fiscal year.