Shares of Urban Outfitters (URBN) soared more than 20% on Friday — the company’s biggest one-day gain ever — after reporting a first quarter that beat Wall Street’s forecasts by a wide margin.
The stock jumped to $73.21, setting a new record high and breaking a three-day losing streak.
Urban Outfitters earned $1.16 per share in the first quarter, well above the 83 cents analysts were expecting and nearly twice as much as it made in the same period last year. Total sales climbed to $1.33 billion, up from around $1.2 billion a year ago — adding more than $130 million in revenue thanks to stronger demand across its brands.
Same-store sales — a key measure that tracks performance at established locations — grew 4.8%, with each of the company’s core brands contributing: Anthropologie was up 6.9%, Free People rose 3.1%, and the Urban Outfitters brand gained 2.1%, returning to growth for the first time in three years.
Higher Profits, Healthier Margins
The company also managed to keep more of what it earned, thanks to fewer discounts and better inventory management. It increased its profit margins, with one key measure — gross margin — improving by 2.4 percentage points, bringing it to nearly 37 cents of profit for every dollar in sales. The operating margin, which reflects profits after running the business, also saw a solid boost.
Despite trade tensions, executives said the impact on profits would likely be minor, and they remain confident in further improvements this year.
Anthropologie, Free People, and Subscription Service Power Growth
Much of the company's success is being driven by its strongest brands. Anthropologie, the largest by revenue, posted its 16th straight quarter of sales growth, with strength across clothing, accessories, and home décor. Its newly launched Celandine resort wear line is already outperforming expectations.
Free People also had a standout quarter, with booming demand in both its stores and wholesale business. Its activewear line, FP Movement, saw wholesale revenue skyrocket by 78%, helping the overall brand grow nearly 30% compared to a year ago.
The turnaround at the Urban Outfitters brand was also a highlight. While North America still faces challenges, Europe saw a 14% jump in sales, and the brand’s U.S. business showed early signs of recovery, helped by fewer markdowns and a refreshed product lineup — including new partnerships with BAGGU and Nike.
The company’s clothing rental service, Nuuly, also played a role, with sales rising by nearly 60%, reaching $124 million in the quarter.
Analysts Turn Bullish
Following the earnings release, JPMorgan upgraded the stock to “Overweight”, raising its price target to $78 and projecting continued earnings growth into next year. The bank now expects Urban Outfitters to earn around $5 per share this year, up from about $3 last year, and close to $6 per share in 2026.
Other firms, including BMO Capital, also raised their price targets, citing the company's strong momentum and brand performance.
With no debt and nearly $9 in cash per share on hand, Urban Outfitters is in a solid financial position, giving it the flexibility to invest in growth and return value to shareholders.
In an industry where many competitors are struggling with inflation and weakening demand, Urban Outfitters has defied expectations. All three of its major brands are now growing, profits are on the rise, and Wall Street is taking notice.
Same-store sales — a key measure that tracks performance at established locations — grew 4.8%, with each of the company’s core brands contributing: Anthropologie was up 6.9%, Free People rose 3.1%, and the Urban Outfitters brand gained 2.1%, returning to growth for the first time in three years.
Higher Profits, Healthier Margins
The company also managed to keep more of what it earned, thanks to fewer discounts and better inventory management. It increased its profit margins, with one key measure — gross margin — improving by 2.4 percentage points, bringing it to nearly 37 cents of profit for every dollar in sales. The operating margin, which reflects profits after running the business, also saw a solid boost.
Despite trade tensions, executives said the impact on profits would likely be minor, and they remain confident in further improvements this year.
Anthropologie, Free People, and Subscription Service Power Growth
Much of the company's success is being driven by its strongest brands. Anthropologie, the largest by revenue, posted its 16th straight quarter of sales growth, with strength across clothing, accessories, and home décor. Its newly launched Celandine resort wear line is already outperforming expectations.
Free People also had a standout quarter, with booming demand in both its stores and wholesale business. Its activewear line, FP Movement, saw wholesale revenue skyrocket by 78%, helping the overall brand grow nearly 30% compared to a year ago.
The turnaround at the Urban Outfitters brand was also a highlight. While North America still faces challenges, Europe saw a 14% jump in sales, and the brand’s U.S. business showed early signs of recovery, helped by fewer markdowns and a refreshed product lineup — including new partnerships with BAGGU and Nike.
The company’s clothing rental service, Nuuly, also played a role, with sales rising by nearly 60%, reaching $124 million in the quarter.
Analysts Turn Bullish
Following the earnings release, JPMorgan upgraded the stock to “Overweight”, raising its price target to $78 and projecting continued earnings growth into next year. The bank now expects Urban Outfitters to earn around $5 per share this year, up from about $3 last year, and close to $6 per share in 2026.
Other firms, including BMO Capital, also raised their price targets, citing the company's strong momentum and brand performance.
With no debt and nearly $9 in cash per share on hand, Urban Outfitters is in a solid financial position, giving it the flexibility to invest in growth and return value to shareholders.
In an industry where many competitors are struggling with inflation and weakening demand, Urban Outfitters has defied expectations. All three of its major brands are now growing, profits are on the rise, and Wall Street is taking notice.
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