Driven by strong results across all its brands and lower markdowns, Urban Outfitters (URBN) reported record revenue and operating profits for the fiscal fourth quarter, lifting shares by as much as 3% in Wednesday’s late trading.
Across its four major brands, the Nuuly apparel rental business saw the most dramatic jump in sales, increasing by 43% to $160M, followed by a 12.5% gain in sales for its Urban Outfitters banner, a 10% gain in Free People sales, and a 4.2% gain in Anthropologie sales, all of which generated revenue of $1.802B, up 10% from a year earlier and $10M better than anticipated.
Comparable retail segment net sales were up 5.5%, driven by mid-single-digit positive growth in both the digital channel and retail stores. By segment, comparable store sales were up 9.6% at Urban Outfitters, up 5.2% at Free People, and up 3.7% at Anthropologie. The company’s Nuuly business realized double-digit subscriber growth during the quarter.
The retailer earned an adjusted profit of $1.43 per share, up 37% from a year earlier and $0.17 better than expected.
The increase in gross profit was primarily due to improved retail segment markdowns driven by lower markdowns at Urban Outfitters and Free People, a leverage in store occupancy costs due to the increase in comparable retail segment net sales, and leverage in delivery expense due to a reduction in packages per order, partially offset by deleverage in initial merchandise costs.
Related tickers: American Eagle Outfitters (AEO), Abercrombie & Fitch (ANF), Gap (GAP), V.F. Corp (VFC), PVH Corp (PVH)