For the three months ended 31 October 2023, total retail segment net sales at Urban Outfitters Inc rose 7.3%, with comparable retail segment net sales rising 5.6%.
The company says this 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.
Speaking on a call with investors as the results were announced, Frank Conforti, co-president/COO at Urban Outfitters Inc, highlighted that the increase in comparable retail sales was driven by high-single-digit growth in the direct-to-consumer channel and mid-single-digit comps in stores, with sales increasing in both channels as a result of higher traffic and increased average unit retail price.
Comparable net retail segment sales for Q3 2024 increased at all of Urban Outfitters Inc’s brands in comparison to the same period last year, except for Urban Outfitters. Net sales increased 22.5% at Free People and 13.2% at Anthropologie. Net sales decreased 14.2% at Urban Outfitters.
Conforti said that the record third quarter revenue from the rest of the group’s brands “more than offset” the negative trend at the Urban Outfitters brand.
Income from operations at the group increased from $57.3m in Q3 2022 to $109m in Q3 2023, while net income increased from $37.2m up to $83m in the same period.
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In a statement, Richard A Hayne, CEO at Urban Outfitters Inc, pointed out that the “record” third quarter sales helped drive a 120% increase in EPS.
Hayne said: “As we enter the holiday season the consumer continues to react positively to our assortments and marketing campaigns at four out of five of our brands which leaves us confident we can continue to drive revenue and earnings growth in the fourth quarter.”
Key results from Urban Outfitters Q3:
- Total net sales for company increase to 9.0% to a record $1.28bn
- Total retail segment sales increased 7.3%
- Urban Outfitters sees 14.2% decrease in net sales, as other group retail brands see significant sales increase
Net sales at rental and resale marketplace Nuuly increased by $30.2m compared to Q3 2022, which Urban Outfitters attributed to a 68% increase in the number of subscribers compared to the same period in 2022. The platform is now said to have a total of 198,000 active subscribers. In
Q3 2023, Nuuly generated $65.5m in revenue for the company. On the call with investors, CEO Hayne said there “is much to be excited about” in the future of the platform.
Hayne also noted on the call that he and the brand teams are excited at the potential for generative AI to augment and enhance Urban Outfitters Inc’s already “superb” creative capabilities.
Hayne also claimed that data science and AI have the potential to deliver much shorter product lead times, more accurate demand forecasts, better allocations, more personalised marketing and optimised inventory planning for the Urban Outfitters group, among other benefits.
Additionally, the company shared that during the nine months ended 31 October 2023, it opened a total of 21 new retail locations, and closed ten.