Urban Outfitters (URBN, Financial) just dropped some jaw-dropping Q3 numbers, sending its stock rocketing nearly 14% in pre-market trading. Net income hit a record $102.9 million, or $1.10 per share, on $1.36 billion in revenue—a 6.3% jump year-over-year. The real MVPs? Anthropologie and Free People, both flexing with 5%+ growth in retail sales. Meanwhile, Nuuly, their subscription rental service, stole the spotlight with a massive 48% revenue boost, thanks to a 51% surge in active subscribers. CEO Richard A. Hayne hinted at a strong holiday season ahead, saying they expect sales momentum to stay hot.
Gross profit wasn't just good—it was better. Profit margins expanded with a 9.4% increase in gross profit dollars, fueled by higher merchandise markups and smoother inventory management. Even though Urban Outfitters' retail sales dipped 8.9%, the company made up for it by crushing it in wholesale, where Free People saw a 20% surge. Inventory rose 10% year-over-year, largely to gear up for the holidays. Yes, marketing and payroll costs ticked up a bit, but the company's leaner tax strategy helped offset the hit to margins.
Urban Outfitters is playing the long game, and investors are taking notice. With 36 new stores opened this year and $52 million in share buybacks, the brand is doubling down on growth while rewarding shareholders. Free People and Anthropologie are on fire, Nuuly is proving it's more than a side hustle, and the company's multi-pronged strategy is clicking. With the holiday shopping frenzy just around the corner, Urban Outfitters is shaping up to be a must-watch retail juggernaut.
