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Key Takeaways Nuuly's Q2 fiscal 2027 revenues rose 29% to $179M as average active subscribers climbed 30% to 484,000.Adjusted Subscription operating income jumped 44% to $18M, with margin expanding 106 bps to 10.1%.Management sees high-20% Nuuly revenue growth in Q3 and fiscal 2027, with full-year sales above $700M. Nuuly is emerging as a profitable growth engine for Urban Outfitters Inc. (URBN - Free Report) , supported by subscriber expansion, a broader assortment and improving operating efficiency. Investments in personalization, fit guidance and fulfillment are strengthening the rental experience, while additional capacity and automation are establishing a foundation for continued growth.

The second quarter of fiscal 2027 results reinforce the view. Nuuly’s revenues increased 29% year over year to $179 million as average active subscribers rose 30% to 484,000, an increase of 113,000. Active subscribers exceeded 500,000 in early June before easing with the business’ typical summer seasonality.

Scale is translating into stronger economics. Adjusted Subscription segment operating income increased 44% to $18 million, while the adjusted operating margin expanded 106 basis points to 10.1%. Adjusted gross profit rose 32% to $53 million and the margin improved 83 basis points to 29.4%, mainly reflecting leverage in logistics expenses.

Nuuly’s assortment grew 35% to nearly 33,000 choices. Nike began rolling out in August, while J.Crew is scheduled to debut in October. Enhanced recommendations and customized fit guidance have improved satisfaction metrics, while delivery upgrades add convenience. Planned automation should generate logistics savings. Once the East Coast expansion is complete, Nuuly’s network should support roughly 1.2 million subscribers.

Management projects high-20% Nuuly revenue growth for the third quarter and fiscal 2027, with full-year revenues exceeding $700 million and a high-single-digit operating margin. Although margins should ease seasonally during the second half, continued subscriber momentum and fulfillment efficiencies support the outlook. A program extension planned for the first half of next year could provide another catalyst by increasing revenue per user.

URBN’s Price Performance, Valuation & EstimatesShares of Urban Outfitters have gained 20.6% over the past six months against the industry’s 10.3% decline.

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From a valuation standpoint, URBN trades at a trailing price-to-sales ratio of 1.06, below the industry’s average of 1.35. It has a Value Score of A.

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The Zacks Consensus Estimate for Urban Outfitters’ fiscal 2027 earnings implies year-over-year growth of 13.2%, while the same for fiscal 2028 indicates an uptick of 12.4%. Estimates for fiscal 2027 and 2028 have been revised upward by 8 cents and 18 cents, respectively, over the past 30 days.

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Urban Outfitters currently carries a Zacks Rank #2 (Buy).

Other Key Picks in RetailFIGS, Inc. (FIGS - Free Report) is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 89.5% and 18.2%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.

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The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.

Fossil Group, Inc. (FOSL - Free Report) is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.

The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.

PHILADELPHIA, Aug. 26, 2026 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands including the Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly brands, today announced net income of $240.7 million and earnings per diluted share of $2.78 for the three months ended July 31, 2026. For the six months ended July 31, 2026, net income was $356.4 million and earnings per diluted share were $4.06.

For the three months ended July 31, 2026, adjusted net income was $149.3 million and adjusted earnings per diluted share were $1.72. For the six months ended July 31, 2026, adjusted net income was $265.0 million and adjusted earnings per diluted share were $3.02. Adjusted net income and adjusted earnings per diluted share for the three and six months ended July 31, 2026, excludes one-time benefits related to refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA"), associated interest income and a tax benefit related to the release of a valuation allowance against certain foreign net deferred tax assets. See “Reconciliation of Non-GAAP Financial Measures” included at the end of this release.

Total Company net sales for the three months ended July 31, 2026, increased 10.4% to a record $1.66 billion. Total Retail segment net sales increased 8.0%, with comparable Retail segment net sales increasing 6.2%. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and mid single-digit positive growth in retail store sales. Comparable Retail segment net sales increased 10.0% at FP Group, 8.4% at Urban Outfitters and 3.0% at Anthropologie. Subscription segment net sales increased 28.6% primarily driven by a 30.4% increase in average active subscribers in the current quarter versus the prior year quarter. Wholesale segment net sales increased 18.6% driven by a 19.2% increase in FP Group wholesale sales due to an increase in sales to specialty customers and department stores.

For the six months ended July 31, 2026, total Company net sales increased 10.9% to a record $3.14 billion. Total Retail segment net sales increased 8.0%, with comparable Retail segment net sales increasing 6.0%. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and mid single-digit positive growth in retail store sales. Comparable Retail segment net sales increased 9.9% at FP Group, 8.8% at Urban Outfitters and 2.5% at Anthropologie. Subscription segment net sales increased 31.4% primarily driven by a 31.8% increase in average active subscribers in the current period versus the prior year period. Wholesale segment net sales increased 21.7% driven by a 22.6% increase in FP Group wholesale sales primarily due to an increase in sales to specialty customers.

“We are pleased to report our highest adjusted profit quarter in Company history, marking our eighth consecutive quarter of record sales and profits. These results were driven by positive Retail segment ‘comps’ at every brand and continued double-digit growth in our Wholesale and Subscription segments,” said Richard A. Hayne, Chief Executive Officer. “Our customers continue to respond favorably to our fashion assortments. This gives us confidence in URBN's ongoing success,” finished Mr. Hayne.

Net sales by brand and segment for the three and six-month periods were as follows:

 Three Months Ended  Six Months Ended  July 31,  July 31,  2026  2025  2026  2025 Net sales by brand           Anthropologie$634,535  $606,954  $1,223,608  $1,176,885 FP Group 478,053   415,014   889,772   768,126 Urban Outfitters 360,015   333,171   664,742   606,676 Nuuly 178,605   138,932   345,869   263,286 Menus & Venues 10,707   10,684   19,269   19,283 Total Company$1,661,915  $1,504,755  $3,143,260  $2,834,256             Net sales by segment           Retail Segment$1,392,520  $1,289,269  $2,613,434  $2,419,779 Subscription Segment 178,605   138,932   345,869   263,286 Wholesale Segment 90,790   76,554   183,957   151,191 Total Company$1,661,915  $1,504,755  $3,143,260  $2,834,256   For the three months ended July 31, 2026, the gross profit rate increased by 580 basis points compared to the three months ended July 31, 2025, and gross profit dollars increased 27.4% to $721.6 million from $566.2 million. For the three months ended July 31, 2026, the adjusted gross profit rate increased by 4 basis points compared to the three months ended July 31, 2025, and adjusted gross profit dollars increased 10.6% to $625.9 million from $566.2 million. The increase in the adjusted gross profit rate was primarily due to leverage in store occupancy costs due to the increase in comparable Retail segment store net sales and leverage in delivery expense as a result of several company initiatives to offset fuel surcharges, partially offset by an increase in Retail segment markdowns driven by Anthropologie and the negative impacts of tariffs and inbound freight fuel surcharges on initial merchandise costs. The increase in adjusted gross profit dollars was primarily due to higher net sales.

For the six months ended July 31, 2026, the gross profit rate increased by 299 basis points compared to the six months ended July 31, 2025, and gross profit dollars increased 19.8% to $1.26 billion from $1.06 billion. For the six months ended July 31, 2026, the adjusted gross profit rate decreased by 6 basis points compared to the six months ended July 31, 2025, and adjusted gross profit dollars increased 10.7% to $1.17 billion from $1.06 billion. The decrease in the adjusted gross profit rate was primarily due to an increase in Retail segment markdowns driven by Anthropologie and the impact of a prior year gain of $4.8 million, or 17 basis points, not repeated in the current year period, partially offset by leverage in store occupancy costs due to the increase in comparable Retail segment store net sales. The increase in adjusted gross profit dollars was primarily due to higher net sales.

As of July 31, 2026, total inventory increased by $82.3 million, or 11.8%, compared to total inventory as of July 31, 2025. Total Retail segment inventory increased 12.0% and Retail segment comparable inventory increased 8.4%. Wholesale segment inventory increased 10.0%. The increase in Retail segment inventory was due to the increase in net sales and timing of inventory receipts. The increase in Wholesale segment inventory was due to the increase in net sales.

For the three months ended July 31, 2026, selling, general and administrative expenses increased by $41.0 million, or 10.5%, compared to the three months ended July 31, 2025. Selling, general and administrative expenses were flat as a percentage of net sales compared to the three months ended July 31, 2025. The leverage in store payroll expenses due to the growth in Retail segment store net sales was offset by the deleverage in marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, along with increased artificial intelligence technology investments benefiting the Company's current and future operations. The dollar growth in selling, general and administrative expenses was primarily due to increased marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, as well as increased store payroll expenses to support the growth in Retail segment store net sales.

For the six months ended July 31, 2026, selling, general and administrative expenses increased by $83.1 million, or 11.0%, compared to the six months ended July 31, 2025. Selling, general and administrative expenses deleveraged 4 basis points as a percentage of net sales compared to the six months ended July 31, 2025. The deleverage in selling, general and administrative expenses was primarily related to deleverage in marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, along with increased artificial intelligence technology investments benefiting the Company's current and future operations. This was partially offset by a discrete benefit of $6.9 million, or 22 basis points, in the current year period resulting from the reversal of a litigation accrual, as well as leverage in store payroll expenses due to the growth in Retail segment store net sales. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer growth and increased net sales in the Retail and Subscription segments, increased store payroll expenses to support the growth in Retail segment store net sales and increased artificial intelligence technology investments benefiting the Company's current and future operations.

The Company’s effective tax rate for the three months ended July 31, 2026, was 19.4%, compared to 21.5% in the three months ended July 31, 2025. The Company's adjusted effective tax rate for the three months ended July 31, 2026, was 24.8%. The Company's effective tax rate for the six months ended July 31, 2026, was 19.8%, compared to 21.5% in the six months ended July 31, 2025. The Company's adjusted effective tax rate for the six months ended July 31, 2026, was 23.0%. The change in the adjusted effective tax rate for the three and six months ended July 31, 2026, was primarily attributable to the ratio of foreign taxable earnings to global taxable earnings.

Net income for the three months ended July 31, 2026, was $240.7 million and earnings per diluted share were $2.78. Adjusted net income for the three months ended July 31, 2026, was $149.3 million and adjusted earnings per diluted share were $1.72. Net income for the six months ended July 31, 2026, was $356.4 million and earnings per diluted share were $4.06. Adjusted net income for the six months ended July 31, 2026, was $265.0 million and adjusted earnings per diluted share were $3.02.

On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. During the six months ended July 31, 2026, the Company repurchased and subsequently retired 4.6 million shares for approximately $300 million. During the year ended January 31, 2026, the Company repurchased and subsequently retired 3.3 million shares for approximately $154 million. As of July 31, 2026, 10.0 million common shares were remaining under the program.

Store data for the six months ended July 31, 2026, was as follows:

  January 31,        July 31,  2026  Openings  Closings  2026Anthropologie NA  234   3   1   236Anthropologie EU  20   1   —   21Total Anthropologie  254   4   1   257Free People NA  167   6   —   173FP Movement NA  88   10   1   97Free People EU  13   1   —   14Total FP Group  268   17   1   284Urban Outfitters NA  177   1   2   176Urban Outfitters EU  76   1   1   76Total Urban Outfitters  253   2   3   252Menus & Venues  9   —   1   8Total Company-Owned Stores  784   23   6   801Franchisee-Owned Stores(1)  9   —   —   9Total URBN  793   23   6   810  (1)    Includes 7 Urban Outfitters and 2 Anthropologie franchisee-owned stores.

Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands. The Company operates omni-channel retail operations including stores, websites and catalogs for the Anthropologie, Free People, FP Movement and Urban Outfitters brands across the United States, Canada and Europe; Menus & Venues restaurants; and Urban Outfitters and Anthropologie franchisee-owned stores in the Middle East. Free People, FP Movement and Urban Outfitters wholesale sell products to department and specialty stores worldwide, digital businesses and the Company's Retail segment. Nuuly is primarily a women's apparel subscription rental service offering a wide selection of rental product from the Company's own brands, third-party brands and one-of-a-kind vintage pieces.

A conference call will be held today to discuss second quarter results and will be webcast at 5:00 pm. ET at: https://edge.media-server.com/mmc/p/9wzhhhd4/.

As used in this document, unless otherwise defined, “Anthropologie” refers to the Company’s Anthropologie, Terrain and Maeve brands and “FP Group” refers to the Company’s Free People and FP Movement brands.

This news release is being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Certain matters contained in this release may contain forward-looking statements. When used in this release, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, currency fluctuations, economic conditions and legal or regulatory changes, the effects of war and geopolitical instability, including impacts of the conflicts in the Middle East and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises, labor shortages and increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, our effective utilization of technological advancements, including in artificial intelligence, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs such as retaliatory tariffs), border adjustment taxes or increases in duties or quotas, the unexpected closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.

URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Income
(amounts in thousands, except share and per share data)
(unaudited)  Three Months Ended  Six Months Ended  July 31,  July 31,  2026  2025  2026  2025 Net sales$1,661,915  $1,504,755  $3,143,260  $2,834,256 Cost of sales 940,364   938,594   1,879,143   1,779,031 Gross profit 721,551   566,161   1,264,117   1,055,225 Selling, general and administrative expenses 432,812   391,774   835,697   752,611 Income from operations 288,739   174,387   428,420   302,614 Other income, net 9,801   8,886   15,986   18,532 Income before income taxes 298,540   183,273   444,406   321,146 Income tax expense 57,889   39,408   88,050   68,934 Net income$240,651  $143,865  $356,356  $252,212             Net income per common share:           Basic$2.81  $1.60  $4.12  $2.78 Diluted$2.78  $1.58  $4.06  $2.73             Weighted-average common shares outstanding:           Basic 85,633,607   89,667,451   86,553,213   90,692,646 Diluted 86,667,561   91,167,981   87,719,187   92,304,624                         AS A PERCENTAGE OF NET SALES           Net sales 100.0%  100.0%  100.0%  100.0%Cost of sales 56.6%  62.4%  59.8%  62.8%Gross profit 43.4%  37.6%  40.2%  37.2%Selling, general and administrative expenses 26.0%  26.0%  26.6%  26.5%Income from operations 17.4%  11.6%  13.6%  10.7%Other income, net 0.6%  0.6%  0.5%  0.6%Income before income taxes 18.0%  12.2%  14.1%  11.3%Income tax expense 3.5%  2.6%  2.8%  2.4%Net income 14.5%  9.6%  11.3%  8.9%  URBAN OUTFITTERS, INC.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)  July 31,  January 31,  July 31,  2026  2026  2025 ASSETS        Current assets:        Cash and cash equivalents$598,756  $369,206  $332,171 Marketable securities 117,371   326,724   290,664 Accounts receivable, net of allowance for doubtful accounts
of $1,102, $1,209 and $2,388, respectively 102,958   95,668   86,922 Inventory 778,539   700,945   696,199 Prepaid expenses and other current assets 226,772   193,561   213,356 Total current assets 1,824,396   1,686,104   1,619,312 Property and equipment, net 1,658,270   1,466,236   1,376,811 Operating lease right-of-use assets 1,047,947   1,051,109   1,011,840 Marketable securities 229,407   461,858   366,336 Other assets 362,967   342,306   336,494 Total Assets$5,122,987  $5,007,613  $4,710,793          LIABILITIES AND SHAREHOLDERS’ EQUITY        Current liabilities:        Accounts payable$372,642  $327,903  $335,985 Current portion of operating lease liabilities 223,177   225,478   227,105 Accrued expenses, accrued compensation and other
current liabilities 558,300   564,713   533,058 Total current liabilities 1,154,119   1,118,094   1,096,148 Non-current portion of operating lease liabilities 990,197   1,000,088   953,025 Other non-current liabilities 124,455   74,144   81,228 Total Liabilities 2,268,771   2,192,326   2,130,401          Shareholders’ equity:        Preferred shares; $.0001 par value, 10,000,000 shares
authorized, none issued —   —   — Common shares; $.0001 par value, 200,000,000 shares authorized,
85,650,390, 89,698,222 and 89,696,293 shares issued and
outstanding, respectively9  9  9 Additional paid-in-capital 7,022   19,912   7,277 Retained earnings 2,877,697   2,817,448   2,604,741 Accumulated other comprehensive loss (30,512)  (22,082)  (31,635)Total Shareholders’ Equity 2,854,216   2,815,287   2,580,392 Total Liabilities and Shareholders’ Equity$5,122,987  $5,007,613  $4,710,793   URBAN OUTFITTERS, INC.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)   Six Months Ended   July 31,   2026  2025 Cash flows from operating activities:      Net income $356,356  $252,212 Adjustments to reconcile net income to net cash provided by operating activities:      Depreciation and amortization  73,637   61,400 Non-cash lease expense  106,053   106,546 Provision for deferred income taxes  73,591   11,608 Share-based compensation expense  15,702   14,956 Amortization of tax credit investment  7,452   8,587 Loss on disposition of property and equipment, net  388   262 Changes in assets and liabilities:      Receivables  (7,546)  (12,025)Inventory  (79,103)  (70,611)Prepaid expenses and other assets  (70,389)  (25,095)Payables, accrued expenses and other liabilities  36,095   23,336 Operating lease liabilities  (120,494)  (120,130)Net cash provided by operating activities  391,742   251,046 Cash flows from investing activities:      Cash paid for property and equipment  (268,056)  (107,549)Cash paid for marketable securities  (117,984)  (220,293)Sales and maturities of marketable securities  555,597   295,861 Net cash provided by (used in) investing activities  169,557   (31,981)Cash flows from financing activities:      Proceeds from the exercise of stock options  —   928 Share repurchases related to share repurchase program  (299,996)  (151,935)Share repurchases related to taxes for share-based awards  (22,092)  (21,144)Tax credit investment liability payments  (7,803)  (8,437)Net cash used in financing activities  (329,891)  (180,588)Effect of exchange rate changes on cash and cash equivalents  (1,858)  3,213 Increase in cash and cash equivalents  229,550   41,690 Cash and cash equivalents at beginning of period  369,206   290,481 Cash and cash equivalents at end of period $598,756  $332,171   Important Information Regarding Non-GAAP Financial Measures

In addition to evaluating the financial condition and results of our operations in accordance with U.S. generally accepted accounting principles (“GAAP”), from time to time our management evaluates and analyzes results and any impact on the Company of certain events outside of normal, or “core,” business and operations, by considering adjusted financial measures not prepared in accordance with GAAP. Examples of items that we consider non-core include refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA"), associated interest income and the release of a valuation allowance against certain foreign net deferred tax assets. In order to improve the transparency of our disclosures, provide a meaningful presentation of results from our core business operations and improve period-over-period comparability, we have included certain adjusted financial measures for fiscal 2027 that exclude the impact of these non-core business items.

We believe these adjusted financial measures are important indicators of our recurring results of operations because they exclude items that may not be indicative of, or are unrelated to, our underlying results of operations and provide a useful baseline for analyzing trends in our underlying business. Management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the Company’s financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company’s financial position, results of operations or cash flows and should therefore be considered in assessing the Company’s actual and future financial condition and performance. These adjusted financial measures are not consistent with GAAP and may not be calculated the same as similarly titled measures used by other companies.

URBAN OUTFITTERS, INC. Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (unaudited)           Reconciliation of Total Company Adjusted Gross Profit:          Three Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Gross profit (GAAP)$721,551  43.4% $566,161  37.6%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Adjusted gross profit (Non-GAAP)$625,891  37.7% $566,161  37.6%           Six Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Gross profit (GAAP)$1,264,117  40.2% $1,055,225  37.2%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Adjusted gross profit (Non-GAAP)$1,168,457  37.2% $1,055,225  37.2%  Reconciliation of Total Company Adjusted Income From Operations:          Three Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Income from operations (GAAP)$288,739  17.4% $174,387  11.6%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Adjusted income from operations (Non-GAAP)$193,079  11.6% $174,387  11.6%           Six Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Income from operations (GAAP)$428,420  13.6% $302,614  10.7%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Adjusted income from operations (Non-GAAP)$332,760  10.6% $302,614  10.7%  URBAN OUTFITTERS, INC.Reconciliation of Non-GAAP Financial Measures(amounts in thousands, except per share data)(unaudited)        Reconciliation of Total Company Adjusted Income Tax Expense and Adjusted Effective Tax Rate:         Three Months Ended July 31, 2026 2025 $'s   $'s          Income before income taxes (GAAP)$298,540   $183,273  Adjustments:       IEEPA tariff refunds (a) (95,660)   —  Interest income related to IEEPA tariff refunds (b) (4,445)   —  Adjusted income before income taxes (Non-GAAP)$198,435   $183,273          Income tax expense (GAAP)$57,889   $39,408  Adjustments:       Provision for income taxes on adjustments (c) (24,978)   —  Release of valuation allowance (d) 16,225    —  Adjusted income tax expense (Non-GAAP)$49,136   $39,408          Effective income tax rate (GAAP) 19.4%   21.5% Adjustments 5.4    —  Adjusted effective income tax rate (Non-GAAP) 24.8%   21.5%          Six Months Ended July 31, 2026 2025 $'s   $'s          Income before income taxes (GAAP)$444,406   $321,146  Adjustments:       IEEPA tariff refunds (a) (95,660)   —  Interest income related to IEEPA tariff refunds (b) (4,445)   —  Adjusted income before income taxes (Non-GAAP)$344,301   $321,146          Income tax expense (GAAP)$88,050   $68,934  Adjustments:       Provision for income taxes on adjustments (c) (24,978)   —  Release of valuation allowance (d) 16,225    —  Adjusted income tax expense (Non-GAAP)$79,297   $68,934          Effective income tax rate (GAAP) 19.8%   21.5% Adjustments 3.2    —  Adjusted effective income tax rate (Non-GAAP) 23.0%   21.5%   URBAN OUTFITTERS, INC. Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (unaudited)           Reconciliation of Total Company Adjusted Net Income and Adjusted Diluted EPS:            Three Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Net income (GAAP)$240,651  14.5% $143,865  9.6%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Interest income related to IEEPA tariff refunds (b) (4,445)    —   Provision for income taxes on adjustments (c) 24,978     —   Release of valuation allowance (d) (16,225)    —   Adjusted net income (Non-GAAP)$149,299  9.0% $143,865  9.6%          Diluted EPS (GAAP)$2.78    $1.58   Adjustments, net of tax (1.06)    —   Adjusted diluted EPS (Non-GAAP)$1.72    $1.58              Six Months Ended  July 31,  2026  2025  $'s % of Net Sales  $'s % of Net Sales           Net income (GAAP)$356,356  11.3% $252,212  8.9%Adjustments:         IEEPA tariff refunds (a) (95,660)    —   Interest income related to IEEPA tariff refunds (b) (4,445)    —   Provision for income taxes on adjustments (c) 24,978     —   Release of valuation allowance (d) (16,225)    —   Adjusted net income (Non-GAAP)$265,004  8.4% $252,212  8.9%          Diluted EPS (GAAP)$4.06    $2.73   Adjustments, net of tax (1.04)    —   Adjusted diluted EPS (Non-GAAP)$3.02    $2.73             (a) Included in "Cost of sales" is a one-time benefit related to refunds for tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA") which the Company received during the three and six months ended July 31, 2026.           (b) Included in "Other income, net" is interest income related to refunds for IEEPA tariffs received during the three and six months ended July 31, 2026.           (c) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustment.           (d) During the three and six months ended July 31, 2026, the Company released a valuation allowance against certain of its foreign net deferred tax assets, resulting in a benefit included in "Income tax expense."   Contact: Oona McCullough  Executive Director of Investor Relations  (215) 454-4806

Key Takeaways URBN's Nuuly revenues rose 34.5% in Q1 fiscal 2027, driven by continued subscriber growth.Nuuly added about 110,000 subscribers year over year, nearing 500,000 active subscribers.URBN's Nuuly posted a $10M operating profit with a 6% operating margin as scale improved profitability. Urban Outfitters Inc. (URBN - Free Report) Nuuly subscription business continues to stand out as one of the company’s fastest-growing segments, reinforcing the value of its diversified operating model. During the first quarter of fiscal 2027, Nuuly generated $167.3 million in revenues, representing a 34.5% year-over-year increase. The performance was primarily driven by continued growth in subscribers, highlighting rising consumer acceptance of apparel rental as a complementary alternative to traditional retail.

Subscriber expansion remained the key growth catalyst. Average active subscribers increased 33% year over year, adding roughly 110,000 subscribers versus the prior-year period. Management noted that the platform is now approaching 500,000 active subscribers, reflecting sustained demand and effective customer acquisition efforts. Healthy retention rates, combined with targeted marketing campaigns, continue to support consistent subscriber growth and strengthen customer engagement.

Nuuly's financial performance also demonstrated improving operating efficiency. The business generated $10 million in operating profit, translating into a 6% operating margin during the quarter. Operating leverage from the expanding subscriber base more than offset continued investments in marketing, underscoring the platform's ability to scale profitably while maintaining a disciplined approach to long-term growth.

Profitability also continued to improve as Nuuly scaled its operations. Subscription segment gross profit increased 39%, while the gross margin expanded by 85 basis points to 28.7%. Higher sales, supported by a growing subscriber base, helped drive stronger unit economics and demonstrated the business's ability to generate increasing profitability alongside rapid revenue growth.

Management remains focused on expanding Nuuly while improving profitability. The company believes its ability to grow subscribers alongside stronger operating economics highlights the scalability of the business and reinforces confidence in its significant long-term growth potential. Our model estimates that the net sales of the Nuuly segment will increase 20% year over year in fiscal 2027.

URBN’s Price Performance, Valuation & EstimatesShares of Urban Outfitters have lost 0.7% over the past three months compared with the industry’s 2.7% decline.

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From a valuation standpoint, URBN trades at a trailing price-to-sales ratio of 0.96X, below the industry’s average of 1.48X. It has a Value Score of B.

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The Zacks Consensus Estimate for Urban Outfitters’ fiscal 2027 earnings implies year-over-year growth of 12.7%, while the same for fiscal 2028 indicates an uptick of 10.2%. Estimates for fiscal 2027 and 2028 have been revised upward by 5 cents and 7 cents, respectively, over the past seven days.

Image Source: Zacks Investment Research

URBN currently sports a Zacks Rank #1 (Strong Buy).

Other Key Picks in RetailGenesco Inc. (GCO - Free Report) is a Nashville-based specialty retail and branded company. It sells footwear and accessories in retail stores. The company flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings indicates growth of 55.2% from the year-ago actuals. GCO delivered a trailing four-quarter average earnings surprise of 3.8%.

Designer Brands Inc. (DBI - Free Report) designs, produces and retails footwear and accessories. It offers shoes, boots, sandals, sneakers, socks, handbags and accessories. It currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Designer Brands’ current fiscal-year earnings and sales suggests growth of 137.5% and 0.5%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 112.8%.

Tapestry, Inc. (TPR - Free Report) is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The company sports a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales indicates growth of 36.3% and 13.8%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.

It has been about a month since the last earnings report for Urban Outfitters (URBN - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Urban Outfitters due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Urban Outfitters, Inc. before we dive into how investors and analysts have reacted as of late.

URBN Q1 Earnings Beat Estimates on Strong Retail & Subscription GrowthUrban Outfitters reported strong first-quarter fiscal 2027 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, both metrics improved from the prior-year quarter’s reported figures. The company delivered record first-quarter sales and profits, marking its seventh consecutive quarter of record performance.

Management highlighted that broad-based momentum across the Retail, Subscription and Wholesale segments, along with disciplined execution and strong customer engagement, supported the quarter’s performance.

URBN’s Quarterly PerformanceThis lifestyle specialty retailer delivered earnings per share of $1.30, rising 12.1% year over year and surpassing the Zacks Consensus Estimate of $1.20 by 8.3%. Net sales increased 11.4% year over year to $1,481.3 million, beating the consensus mark of $1,456 million by 1.7%. Strength spanned Retail, Wholesale and Subscription, supported by positive comparable sales at all retail brands and continued subscriber growth at Nuuly.

Total Retail segment net sales rose 8% year over year to $1.22 billion, while comparable Retail segment sales increased 5.6%. Growth in comparable sales was driven by high-single-digit gains in digital channel sales and mid-single-digit growth in retail store sales. The Comparable Retail segment sales increased 9.8% at FP Group, 9.3% at Urban Outfitters and 1.9% at Anthropologie.

Within the FP Group, total sales increased 16.6% year over year to $411.7 million due to continued momentum across both Wholesale and Retail segments. Free People brand sales increased 12%, while FP Movement brand sales jumped 32% during the quarter.

The Wholesale segment posted net sales growth of 24.8% to $93.2 million, driven by a 26.2% increase in FP Group wholesale revenues due to higher sales to specialty customers.

Nuuly, the company’s women’s apparel subscription rental service, continued to witness strong momentum. Subscription segment net sales increased 34.5% year over year to $167.3 million, driven by a 33.3% increase in average active subscribers from the prior-year quarter.

Urban Outfitters Sees Gross Margin Dip on Prior-Year BenefitGross profit rose 10.9% year over year to $542.6 million in the fiscal first quarter, mainly driven by higher net sales during the period. However, the gross margin declined 16 basis points year over year to 36.6%. This decrease was largely due to a one-time gain of $4.8 million, or 36 basis points, recognized in the prior-year quarter that did not repeat this quarter. Excluding this item, the underlying gross margin expanded by 20 basis points, supported by lower markdowns at FP Group and Urban Outfitters, partly offset by deleveraging in initial merchandise costs related to tariffs.

The Retail segment gross profit increased 7% year over year to $460.9 million, though the segment gross margin slipped 18 bps to 37.7%. The Wholesale segment’s gross profit rose 31% to $33.8 million, with the gross margin expanding 178 bps to 36.3%, driven by higher sales to regular-price customers. Subscription segment gross profit climbed 39% to $47.9 million, while the segment gross margin improved 85 bps to 28.7%.

Selling, general and administrative (SG&A) expenses increased 11.7% year over year to $402.9 million. The increase was primarily driven by higher store payroll expenses to support the Retail segment sales growth, increased marketing investments to support customer acquisition and sales growth in the Retail and Subscription segments, and higher technology investments tied to AI initiatives.

As a percentage of net sales, SG&A expenses deleveraged 5 bps to 27.2%. The quarter included a benefit of $6.9 million, or 47 bps, related to the reversal of a litigation accrual, partially offset by deleverage from higher marketing and technology spending.

URBN reported operating income of $139.7 million, up 8.9% from $128.2 million in the prior-year quarter. However, the operating margin contracted 22 bps year over year to 9.4%, reflecting SG&A deleverage despite higher gross profit dollars.

Urban Outfitters Showcases Store GrowthIn the first quarter of fiscal 2027, the company opened 11 stores and closed three stores. Store openings included two Anthropologie, three Free People and six FP Movement stores, while closures included one Free People, one Urban Outfitters and one Menus & Venues location.

The company plans to open 54 stores and close around 19 stores in fiscal 2027. Net new store growth will be primarily driven by the expansion of FP Movement, Free People and Anthropologie locations. Specifically, the company intends to open 21 FP Movement, 12 Free People, 13 Anthropologie and eight Urban Outfitters stores in fiscal 2027.

Urban Outfitters’ Financial Health SnapshotAs of April 30, 2026, Urban Outfitters had cash and cash equivalents of $301.4 million compared with $189.4 million in the prior-year period. Total shareholders’ equity stood at $2.61 billion as of the quarter-end. As of April 30, 2026, total inventory increased 9.5% from the prior-year period. The Retail segment’s inventory rose 10.6%, while comparable Retail segment inventory increased 10%. In contrast, the Wholesale segment’s inventory declined 1.2%. The increase in the Retail segment inventory was primarily driven by higher net sales and early inventory receipts aimed at mitigating potential shipping disruptions related to the Middle East conflict.

During the first quarter of fiscal 2027, the company repurchased and retired 4.6 million shares for approximately $300 million. As of April 30, 2026, 10 million common shares remained authorized for repurchase under the existing program.

URBN Lays Out Q2 TargetsUrban Outfitters’ management expects second-quarter fiscal 2027 total company sales to grow in the high-single-digit range, supported by continued momentum across the Retail, Wholesale and Subscription businesses.

The Retail segment’s comparable sales are projected to increase in the mid-single-digit range, driven by high-single-digit positive comparable sales growth at Urban Outfitters and FP Group, while Anthropologie is expected to deliver low to mid-single-digit positive comparable sales growth. Nuuly is expected to post mid to high-20% revenue growth on the back of continued subscriber momentum, while the Wholesale segment is projected to generate mid-teens growth.

For the fiscal second quarter, URBN expects the gross profit margin to be flat to decline 25 basis points year over year. The anticipated pressure primarily reflects lower initial merchandise margins due to higher tariffs than the last year, along with elevated fuel surcharge costs tied to the Middle East conflict.

Management noted that current oil surcharges are expected to remain in place for the remainder of fiscal 2027 and are estimated to create a 70-basis-point unfavorable impact per quarter through higher inbound freight and delivery expenses.

Management expects fiscal second-quarter SG&A growth to be at or slightly ahead of sales growth due to higher marketing investments across brands to support customer acquisition, along with increased technology and AI-related investments.

URBN’s FY27 OutlookFor fiscal 2027, management continues to expect positive high-single-digit total company sales growth. This outlook is expected to be supported by mid-single-digit Retail segment comparable sales growth, mid-20% revenue growth at Nuuly and high-single-digit growth in the Wholesale segment.

URBN expects the fiscal 2027 gross profit margin to increase by 25 basis points year over year, with the second half anticipated to benefit from improved initial merchandise margins. The company also expects to receive $100 million in tariff refunds in the fiscal second quarter related to previously imposed IEEPA tariffs, which management plans to record as a one-time benefit.

For the full year, SG&A growth is expected to be in line with sales growth, while inventory growth is projected to remain at or below the pace of sales growth as the company focuses on improving product turns.

Capital expenditure for fiscal 2027 is planned at approximately $475 million. About 35% of the spending is expected to support retail store expansion and store-related investments, nearly 50% will be allocated toward logistics investments and automation capabilities, while the remaining 15% will support technology initiatives and home office expansion.

Management also expressed confidence in the underlying health of the business, highlighting strong momentum at Free People and FP Movement, continued progress at Urban Outfitters in North America and Europe, improving trends at Anthropologie and Nuuly’s path toward its long-term $1 billion revenue opportunity. The company believes its diversified portfolio positions URBN for continued positive comparable sales growth, margin expansion and record profitability in fiscal 2027.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

VGM ScoresAt this time, Urban Outfitters has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Urban Outfitters has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerUrban Outfitters belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, Fossil Group (FOSL - Free Report) , has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Fossil Group reported revenues of $224.8 million in the last reported quarter, representing a year-over-year change of -3.6%. EPS of -$0.03 for the same period compares with -$0.10 a year ago.

For the current quarter, Fossil Group is expected to post a loss of $0.29 per share, indicating a change of -190% from the year-ago quarter. The Zacks Consensus Estimate has changed -81.3% over the last 30 days.

Fossil Group has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.