Urban Outfitters 2026 Q1 Earnings Strong Performance as Net Income Surges 75.4%

Urban Outfitters (URBN) reported its fiscal 2026 Q1 earnings on June 9th, 2025. The company's results exceeded expectations with net income growth reaching a record high for fiscal Q1. Urban Outfitters raised its guidance for the next quarter, anticipating high single-digit sales growth and projecting a consensus EPS of $1.46 for Q2 of fiscal 2026. The company expects gross profit margins to improve, despite challenges related to tariffs. The outlook remains optimistic, driven by growth across all segments and a diversified sourcing strategy.

Revenue
Urban Outfitters experienced a 10.7% increase in total revenue, reaching $1.33 billion in fiscal Q1 2026, up from $1.20 billion the previous year. The Retail segment contributed significantly with $1.13 billion in revenue, while the Subscription segment, driven by Nuuly's impressive growth, added $124.35 million. The Wholesale segment rounded out the total with $74.64 million.

Earnings/Net Income
Urban Outfitters saw its earnings per share (EPS) increase by 78.8%, rising to $1.18 in fiscal Q1 2026 from $0.66 in fiscal Q1 2025. Net income strengthened substantially, growing by 75.4% to $108.35 million, the highest fiscal Q1 net income in over two decades. The EPS reflects robust financial health and successful strategic initiatives.

Price Action
The stock price of Urban Outfitters edged down 0.78% during the latest trading day, dropped 4.01% over the past week, but surged 34.63% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Urban Outfitters' stock after a revenue miss and holding it for 30 days has proven highly effective, yielding an overall return of 211.95%, significantly outperforming the benchmark return of 93.67%. Despite experiencing a maximum drawdown of -56.19% and a moderate Sharpe ratio of 0.51, the strategy's impressive 25.71% compound annual growth rate and excess return underscore its success during the backtested period. The strategy's high volatility of 50.48% indicates its capacity to capitalize on substantial market movements, offering potential benefits in a volatile market environment.

CEO Commentary
Richard A. Hayne, CEO of Urban Outfitters, expressed satisfaction with the company's record-breaking revenue, driven by strong sales across all brands. He highlighted a remarkable 60% revenue growth from Nuuly and acknowledged a 5% increase in comparable retail sales. Hayne noted challenges in the Urban Outfitters brand and potential tariff impacts but emphasized strategic initiatives that led to the brand's first positive sales comp in some time. He conveyed optimism for continued success, citing growth across all segments and the strength of their diversified sourcing strategy.

Guidance
Urban Outfitters anticipates high single-digit sales growth in the upcoming quarter, projecting a consensus EPS of $1.46 for Q2 of fiscal 2026. The company expects mid-single-digit comparable sales growth for Anthropologie and Free People brands, low single-digit positive comps for Urban Outfitters, and mid-double-digit revenue growth for Nuuly. Gross profit margins are expected to improve by 50 to 100 basis points despite ongoing tariff-related challenges. Urban Outfitters plans to open approximately 64 new stores with capital expenditures of around $240 million for fiscal 2026.

Additional News
Urban Outfitters has been active in share buybacks, repurchasing $152 million worth of shares during the quarter, reflecting confidence in future cash generation despite the decline in operating cash flow. Additionally, Jefferies recently upgraded Urban Outfitters' stock from Underperform to Hold, acknowledging the company's strong performance and strategic initiatives. Urban Outfitters also continues to optimize its retail footprint, with strategic shifts in store count by brand—FP Movement expanding and Urban Outfitters reducing its footprint—indicating a focus on enhancing brand presence and operational efficiency.