Urban Outfitters posted record sales as Free People drove gains across all brands

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The apparel company's net income rose to $240.7 million from $143.9 million a year earlier, with growth across all brands and segments

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Urban Outfitters reported record second-quarter net sales of $1.66 billion on Wednesday, up 10% from $1.50 billion a year earlier, as its Free People group drove comparable sales growth across every brand in its retail segment.

Net income reached $240.7 million, or $2.78 per diluted share, compared with $143.9 million, or $1.58 per diluted share, in the same period last year. Adjusted earnings per share were $1.72, which excludes a one-time benefit from refunds of tariffs previously paid under the International Emergency Economic Powers Act. Analyst estimates had called for adjusted earnings of $1.72 per share and revenue of $1.65 billion, according to the Wall Street Journal.

By brand, Free People posted $478.1 million in net sales, up from $415.0 million a year earlier. Anthropologie generated $634.5 million, compared with $607.0 million in the prior year period. The Urban Outfitters brand contributed $360.0 million, up from $333.2 million. Nuuly, the company's apparel subscription rental service, brought in $178.6 million, a 29% increase from $138.9 million.

Breaking out results by segment, the company said retail net sales climbed 8% to $1.39 billion, with the Free People group pacing comparable sales gains ahead of the Urban Outfitters brand and Anthropologie. The wholesale segment added 19% to reach $90.8 million, driven by Free People's broadening reach among specialty retailers and department store partners. Subscription segment sales rose 29% to $178.6 million.

The results marked the company's eighth consecutive quarter of record sales and profits, the company said. Gross profit was $721.6 million, or 43.4% of net sales. Excluding the IEEPA tariff refunds, adjusted gross profit was $625.9 million, or 37.7% of net sales — roughly in line with the prior year's 37.6%.

Urban Outfitters ended the quarter with 801 company-owned stores, adding a net 17 locations during the first half of the year. The Free People group saw the most expansion, growing from 268 to 284 stores.

The quarter's results build on a strong first half for the company. Urban Outfitters reported record first-quarter net income of $115.7 million in May, when the Free People group posted 17% sales growth and the company beat both earnings and revenue estimates. Chief Executive Officer Richard Hayne said at the time that the company's largely higher-income customer base had remained engaged despite economic uncertainty.

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