- URBN delivered a record-breaking QQ1 2026 with total sales of $1.329 billion, up 11% year over year, underscoring a multi-brand rebound across URBN’s portfolio. Gross profit rose 20% to $489 million, lifting gross margin to 36.8% (up 278 basis points, including 74 bps of non-recurring benefits).
- Operating income expanded 72% to $128 million, driving an operating margin of 9.6% (up ~340 bps year over year). Net income rose 75% to $108 million, or $1.16 per diluted share. The quarterly performance reflects meaningful leverage from occupancy and delivery efficiencies, improved product assortments, and targeted marketing investments that boosted traffic and transactions across both physical and digital channels.
- Nuuly continued to be a standout growth engine with revenue up 60% and average active subscribers up more than 110,000 versus the prior year, contributing to a record first-quarter operating profit for the URBN group above 5%. Anthropologie and Free People also posted solid top-line growth and margin expansion; Urban Outfitters (UO) began to stabilize with the first positive global comp in some time, including a 14% Europe comp and a 2% overall global comp, though North American digital promotions remained a near-term risk. Management projects high-single-digit total company sales growth in Q2 and a full-year gross margin improvement of 50–100 basis points, supported by tariff mitigation and occupancy leverage.
- The company outlined a cautious but constructive outlook for FY2026, including capex of approximately $240 million and net store openings of ~64 with ~17 closed, predominantly to optimize format efficiency and reflect a multi-brand growth strategy. Tariff headwinds are acknowledged, with a planned minimal gross margin impact in Q2 and up to ~20 bps in H2, offset by ongoing execution and price-mixel actions as needed. Investors should monitor tariff developments, real estate optimization, and Nuuly’s continued profitability trajectory as key drivers of value creation.