Good morning, everybody, and thank you for joining us. I'm Adrienne Yih, Barclays Specialty Retail Apparel and Footwear Analyst at Barclays. It is my pleasure to welcome Frank Conforti, Co-President and Chief Operating Officer of URBN, Tricia Smith, Global Chief Executive Officer of Anthropologie Group, and Melanie Marein-Efron, CFO. I always like to give a tiny little bio for those who are new to the story. Frank, you joined URBN in March of 2007 as Director of Finance, and you just moved your way up through the career ranks, throughout your career there. You were CFO before Melanie, and in 2020, were appointed Chief Operating Officer. Tricia, you joined the Anthropologie, or URBN, in April of 2021 as the Global Chief Executive Officer of Anthropologie Group. Prior to that, you had been at Tillys, and before that, merchandising and many different functions at 25 years at Nordstrom. Then Mel, you had joined in 2013 and were promoted simultaneously to CFO in 2020 when Frank was promoted to COO. The past five years, six years, since you both had changed jobs and since you came on board, have been tremendous successes in terms of the overall business. The business is so different today, and I think I've covered the stock, dare I say, 20-some odd years. I knew you- I was watching Tricia's face when you said 25 years. Yeah. You could've just said, "Nice tenure at Nordstrom. Yeah, exactly. I know. But the company, I remember when we had started covering it, was two brands. Yeah. It was those two brands, and we were constantly wondering which of them was uptrending, and overall, it was very apparel-centric. I think today, really what the company has transformed into is the very unique business model of a platform and a portfolio brand. It is not easy to manage a portfolio of brands, all of which are growing. No. It's not. I think that that has been sort of the secret sauce here. I was looking at stocks, the performance, and you're one of the few that's up year to date, so that's A-plus there. But also those who are trading within 10% of the 52-week high, and that is an even smaller cohort. I think that speaks to the fact that you moved outside of maybe a shorter-term, un-investable philosophy, and you're now on the radar screen of a long-only investable compounder. So long introduction, but I guess let me start, Frank, we're starting the conference this morning with everybody talking about the macro and the consumer. Oil is back over $100, or darn near close to it. Gas is back over $4. Doesn't seem like things are moving necessarily in the right direction for the back half. Talk about the health of the U.S. and the European market, beginning of the year to your second quarter, and then as you've seen all the earnings unfold around you, are you seeing any differences in any of those markets? Yeah. Well, thank you for having us, and thank you all for being here on behalf of URBN. As it relates to the macro consumer, obviously we can only speak to our customer, which, if you believe there's the K- shaped, we're sort of on the top side of the inflection of the vertical of the K. But from a macro perspective, employment remains strong. Wages are going up. Yes, there's inflationary pressures. They've been there for some time now. What we see is an incredibly resilient and very healthy consumer. We're seeing no price resistance. We are certainly in, and have been in, a strong fashion trend. The bottoms trend, and silhouettes and fabrications, those types of things have changed, but the bottoms trend has remained strong. And our business has remained strong. I do not think it is very different in Q1 to Q2 than it has been for even longer period of time for us in that our consumer has remained incredibly resilient and very healthy. Like I said, our best gauge of that is being able to look across the strength, as you talked about, the portfolio. Look across multiple brands, multiple geographies, and multiple platforms, whether it be stores or digital. We see strength across all of our modes of sales, and across all of the brands, and it is regular price that is driving it, right? It is not a promotional cadence or creative marketing that is driving it. Obviously marketing is critically important, but I meant marketing from a promotional standpoint. So the consumer, for us, remains in a very healthy position, and we think that is going to continue. We are excited. Great. Melanie, I am going to ask you about the five brands in different stages of growth. So we have got the more mature Anthropologie. We have got a turnaround happening in Urban Outfitters. Go on. You can go through. Yep. We have got Nuuly, which is kind of next generational kind of platform, and then we have got Free People brands, both of those in proven growth modes. So either both of you or one of you talk about from a financial perspective, where we are on the journey and what those margins could look like, and then maybe at a higher level, just how they contribute and work all together. Yeah. Why don't we let Tricia lead off with Anthropologie? We'll go in alphabetical, where Anthropologie is in their journey. Yeah. Threw me a curve ball, Frank. Yes, we are really pleased. Thank you for mentioning that, Adrienne. I think with the progress that the brand has made over the last five years, that's really come from our strategic priorities that we put into place. We have an incredibly strong team. Our entire senior executive team has been together for about four and a half years and has been working on those strategic priorities. I think we've seen tremendous growth. Our first pillar of our strategy was around introducing our brand to a new generation of customers, and we've seen 40% growth of our customer base. I think the thing I'm most proud about that with Anthropologie is it was very important for us to make sure that we weren't alienating our existing very loyal customer. We watched very closely every quarter as we're growing new customers, that we're still growing our retained and our reactivated customer base, and that's been happening really consistently. I think that's probably the thing that our team has been the most focused on. Then made tremendous progress in product. We've really built up our design, our buying, our production teams. Our own brands are now growing to north of 70% of our apparel business. We've launched three new brands. I think the combination of really focusing on growing our customer base, introducing to a new customer, and the evolution that we've been able to invest in in terms of how we're designing and producing product has contributed to that growth over time. Proud of what our teams have accomplished. I'll speak to Urban Outfitters and Nuuly, and then I'll let Melanie speak to the FP Group now as we're referring to it. Urban Outfitters, you know, really feels like they've turned a corner. There's stability in the turn right now. Obviously, that's more so in North America than Europe because Europe really didn't go through the same challenges that North America did. Just speaking to the Urban Outfitters brand in Europe, we continue to honestly exceed our expectations. They're now going up against a multi-year stack of really healthy high single-digit and double-digit comps on a multi-year stack. I don't think the macro there is necessarily as strong as what we're seeing here in the U.S. I think it's much more about their execution. I think they're executing extremely well from a fashion perspective, very well from a creative and from a marketing perspective and connecting with their customer. I would say from a store perspective for Urban Outfitters in Europe, we're largely penetrated in the U.K. market. Still plenty of room for digital growth. The European market is a large opportunity for the Urban Outfitters brand. They've seen some real success now in Germany and France and Spain. It's a meaningful market. It can double their business for them, and it's really around stores and around digital. We're excited to see that business grow and grow profitably. For North America, it certainly feels like, knock on wood, there's really healthy stability in the turn there. I think Sheila and her team have done a great job. You've seen consistent high single-digit comps from them. We're sort of in the second leg of the profitability recovery. If you remember, for those of you that heard me speak before, we talked about the first being margin recovery and specifically markdowns. When the brand was struggling, they had to be too reliant on promotions and markdowns. We've largely recaptured that markdown rate. There's still a little bit more room to go, but largely, they're doing a much better job there. Inventory is much more disciplined, and the fashion is appropriate. So they've recovered from that markdown perspective. The second leg is really about driving comp growth. They've now driven consistent high single-digit comps for a few quarters now, and we see them being able to sustain that momentum. What gives us the confidence there in the sustained momentum is really around customer acquisition. The brand had lost a little bit of their cool factor, right? It's not a brand that wins on low price. They win on having the right fashion at the right price value, and really connecting from an experiential standpoint, whether it be digitally, mobile, through events in stores. They had lost a little bit of that cool factor, a little bit of that relevancy with that younger demographic. Now we're growing double-digit customer growth on our digital platforms. I think their marketing campaigns, their collaborations, what they're doing in universities, what they're doing on things like Reddit and connected TV. You've seen them get that it back, and get their mojo back, and that's what gives us confidence. There's always ebbs and flows as it relates to fashion cycle, but I think they're connecting with that customer again in the right places, in relevant ways. Again, it's regular price that's driving the comp, which always leaves us more confident about sustainability of their momentum. As it relates to Nuuly, we couldn't be more excited. I think certainly there were a lot of heads and side eye when we launched the concept a few years ago, and we said it could get to $1 billion. We think, knock on wood, that they can eclipse $700 million this year with high single-digit operating profit. So I think there was an equal amount of questions as it related to Nuuly of what could the size of the business be from a top-line perspective, but could you do it profitably? We certainly have proven that we can do so, and we think that there's growth and room for an opportunity there. As it relates to where they're going and where they are in their growth trajectory, it's probably one of the brands we. We know the least about as far as where they can go. I think we remain more confident than ever that they can exceed $1 billion. We think they can continue to drive 100,000 or if not more of active new subscribers growth year-over-year. Every time we look at the total addressable market, it grows bigger, and we look at awareness, it's still relatively low. Retention rates remain honestly really high and very consistent from cohort to cohort. There's a lot of new opportunities that relates to what we call ARPU, the average revenue per subscriber or per user. That is untapped opportunity for us. So we're very confident that this business has a long headway in front of it from a top-line perspective. We don't know what the ceiling is, but we're confident we'll be able to exceed $1 billion, and we remain more confident than ever that it could be a 10% plus operating profit business. Like I said, we believe it will hit high single digits this year, growing off of what we delivered last year. There's really a few things that drive that profitability improvements, not just the core profitability. The improvements come from scale and with the confidence in the top line, we're confident that that scale will add to leverage on fixed costs and your kind of core base that you don't have to market to in the same way. The second biggest opportunity is really around logistics. We spend a lot of manual labor in order to get that box out timely, clean, the product looking good to the customer. There's a lot of fruit on the tree from an automation perspective and from sort of just engineering and perfecting how we execute from a logistics perspective. So we feel good that there's a healthy amount of opportunity there to drive not just profit dollars, but profit rate improvement as well for the Nuuly business. For FP Group, which consists of Free People and FP Movement, they had another great quarter, growing 15%. We believe that there's still a lot of growth to be had within FP Group. So FP Group consists of Free People, which has had a long history of sustained growth, being driven by We the Free, now Freest, and just continuing creativity from that brand. There's still distribution opportunities both in North America as well as Europe. People often ask about FP Movement. We still think that's in the early innings of the growth and will provide a tremendous amount of growth for URBN going forward. Just to put it in a little perspective, it represents about a third of the FP Group sales. When you look at it domestically, there's just about 100 stores in the U.S., and we think the opportunity is 2x-3x that to be as big as 200-300 stores just in the U.S. Then when you think about Europe and international, they're really just beginning to grow global brand awareness both through direct-to-consumer channels as well as very strategic, high-profile wholesale partnerships. That really will trail the way for expansion of new stores internationally. So we're super excited. We brought in a new president earlier this year. Her name is Andrea Perez, and we are really excited for her to lead them through the next chapter. We believe that it can be a billion-dollar brand by 2030. Yeah. Great. Just to follow up on the FP Group, that's where the majority of wholesale revenues- Yes. Yes come from? That's correct. What are you seeing in the wholesale channel? Yours is very different because you are mostly in specialty, but the health of the wholesale channel, we have heard some things about end retailers not wanting to place a lot of inventory, being more conservative. But with the heat that we see from FP Movement and Free People, that is not the case here. That is correct. We have continued to have very strong quarters in wholesale, largely being driven by FP Movement, both new distribution as well as comp growth of our existing partners, so that is super exciting. I think the strength of the product has really helped stabilize that business where others may be seeing some hesitation. Great. That brings me to this whole notion of retail compounder, and every once in a while, people find that to be somewhat of an oxymoron. But the fact of the matter is, you know, Tricia, from the time that you have been there, it has been five consecutive years of Anthropologie growth maintaining now low teen margins. Yeah. These are healthy businesses. Free People, from its inception, has just been a consistent compounder. Urban seems like it is going to get its mojo back. We see retailers have high watermark moments, and then they kind of overstay their welcome. How do you control that? Maybe I will start with Tricia because yours is sort of the biggest entity, right, to continue to compound over great numbers. Yeah, I think it starts with the team, right? I think it starts with empowering teams to think of new ideas, to find white space opportunities, to lean into our strengths. We've spent a tremendous amount of time really looking at our speed to market model, right? As you see changes and shifts in the business, then you see seasonality happen. We've had a couple quarters where we've seen some changes in our business too. But I think the thing that allows us to continue to maintain that profit and that growth is our ability to really pivot for our teams to be able to move quickly. I think that's a capability that probably wasn't ingrained as deeply in the Anthropologie brand a few years ago. I'm incredibly proud as we evolve and as we grow, and as the stacks get harder and the comps get tougher, of their ability to be able to think about new ways to grow the business. We're testing some new categories, we're testing some different price points. We're looking at opportunities to look at quality of fabrications that we use. We're at the early stages, I think, of some of the newer brands that we launched to be able to continue to gain market share in categories that we haven't been in before. I think it's about continuing to make sure that we stay connected to our customer, that we show up where they are, that we're thinking about new ways to engage with them. The speed of change in marketing is tremendous these days. I think ensuring that you're nimble, that we've got some flexibility, and that we've got some speed in our model to allow to adapt and evolve with customer preferences is really what our team talks a lot about, and is really focused on. Great. I'm going to stay with you for a second. Yeah. Because on the call, we've been, as Dick would say, seven years into a silhouette shift. Yeah. The prior one was like 17 years, right? It started, no seven, it would've started when you joined. Yeah. That kind of big over the little. One of the things that I think Dick and Meg Hayne really instill across the organization is calculated risk-taking. Yeah. Right. You're never so long into something that you have to retrench from it. Sometimes we've seen the company take risks forward, maybe a little bit early, but always on the front foot. Yeah. As we think about what's coming next, we went from performance run and then to the wide leg with the low profile bottom, our shoes into the more brown shoe. What comes next and how do you calculate moving forward without overstepping, getting ahead of yourself? Yeah, that is the art of retail, right? You're absolutely right, every week, every other week, I meet with Dick and Megan. They're constantly pushing the teams outside of their comfort zone sometimes. I think the ability to be able to really use the digital channel to test and get product very intentionally in front of customers to gauge reaction, is incredibly important. It's a super exciting time, in my opinion, in fashion right now because there's so much range of newness, particularly in the bottoms category. It used to be there was one silhouette, and then that declined, and then another silhouette took over. That still happens to a large degree, and we're squarely in this, you know this kind of larger wide bottom cycle still. There's so much newness in terms of as those shapes evolve and the fabrics then that you can put it in that feel really new to the customer. I was just in our Newbury Street store yesterday, and the range of bottoms that we have in our store, it's so evolved from where it had been, right? We've got different shapes and denim. There's so much newness in pants, not only in fabrications, but in end use and in a very casual nature, as well as a polished, dressed up nature of bottoms that the Anthropologie customer has been able to serve. I think really thinking about the growth of newness, and then taking some big risks and some big swings, and they don't always work, but when they do, it allows you to gain that momentum quickly, and to be able to be on the forefront of that growth. That's always the opportunity, the challenge, and I think what's fun about fashion retail in general. Great. The other question that I often get is, how is URBN able to differentiate the three brands that they have to not have a lot of overlap? Maybe, we kind of know what target market you go after, but at the end of the day, people trade up, they trade down, they see things in different things that they want. So how do you keep them separate from an operational standpoint? I think it is something that we have remained focused on and committed to since the day we launched a second brand and certainly through my 20-plus years there now. It is one of the first things that they ingrain in you is from a shared services perspective, I think that is some of the strength, is that we are able to leverage things like sourcing, technology, finance, logistics, and those big facilities. But as it relates to the brands and the customer, those walls remain tall and thick. That leadership team is unique to that brand, from a product perspective, from a creative perspective, from a marketing perspective, because it is their customer, it is their handwriting, it is their execution. We do not run from building to building and say, "Oh, this fabrication is working. You should try this." That is an absolute no-no. I was told that even as a finance guy when I first came. I remember Glen Senk telling me literally, "You are going to be a part of this meeting, and you do not run over to the next meeting and share, 'Oh, Free People said, the crop top mini is'" He is like, "You will not even know what that is," and I did not at the time. He is like, "But you do not share that type of information." They own their customer, and they own their experience. We bring in, as a company, as you see here, just incredibly talented leaders to run and own their business. We as a portfolio of companies provide what I hope oftentimes, Tricia, is great shared service support. Yes. But the brand leadership owns their customer, and they own the customer experience. We think it is critically important that we do not look the same across all of our banners. We think it is the benefit, right? The benefit to the portfolio and the diversification of the portfolio is that allows one brand to, at certain times, even outperform, and you have the strength of when one brand then is going through a bit of a transition, you have got the others that are continuing to move the total URBN portfolio forward. So it is something we talk about frequently, allowing brand autonomy, and it is critical. There are times you could even say that there are sort of small little leverage points that you could see from a shared services perspective that seem obvious, but we will not do because the customer experience is important. Let me just give you a quick little granular example. We have got this big facility in Kansas, this million-square-foot fulfillment center, and we have got things that are called auto baggers. When the digital bags go out, it would be much easier if I had auto baggers that could have the same bag for all three brands go through, and I could gain more efficiencies because, versus having each bag be separate and branded differently for the end use and the customer, because now you have got to run different waves, it is less efficient. My logistics team is like, "Oh, they are costing us another $0.03 per order." No way. There is no way that our brand leaders want to see the whole portfolio or URBN or all the other brands, because that is their customer and their customer experience and their product. We remain really disciplined on keeping the brand and the brand execution, and their customer base is unique, and it is something that is important to us, and it has been, I think, since the inception. Great. Melanie, coming back to you about the change over the past five years out of the pandemic. I think everybody learned a lot, and some companies just got really efficient. Since 2022, top line has consistently grown, margins have consistently expanded right there at that 10% margin level. In the past six quarters, you have been doing double-digit top-line growth. Your guidance has been high single each of those quarters. That is pretty remarkable, all things considered, tariffs, wars, oil, all those different things. I think I attribute that going back to this foundational portfolio. Can you talk about how, since over your tenure, how different the business model is from the CFO seat today, and I am going to say how much easier, but I am putting that in air quotes. I guess how much more consistent the business model can be for a longer-term investor. Yes. I agree. Maybe it makes my job a little easier. I would say my teams and the brands are doing a really good job, I think, whether it is managing margins and making sure that we are very nimble when the world is constantly changing with tariff changes and changes in transportation costs or any other challenge that they have. I really do think the teams have done a great job in quickly trying to react, while at the same time not creating a risk to the top line. They are constantly looking for new ideas. We do get some leverage as we have had strong top line, but there has been a great focus on finding efficiencies in delivery expense and packages per order. Things that actually have less cost, but at the same time, have a better customer experience. That's nirvana, where you can find efficiencies where the customer either doesn't notice it or even better, it's a better experience. I think the team has been very focused on that. While at the same time, we have continued to invest in SG&A and driving customer acquisition, driving technology investments, and other investments in new businesses like Nuuly and things like that. I do think we've created this portfolio, while at the same time there's a lot of financial discipline behind it that's driven the profit improvement. If I can just expand, because it's a topic that I think we're really proud of, and we think it has been tantamount to the consistency of our success and I think tantamount to the consistency of what we believe we can drive going forward. You mentioned the multiple quarters and the five big brands now, and the diversity of the portfolio. For myself, having been here 20 years, when I started, and I remember John Kyees and getting sort of it was either URBN or Anthropologie, and then if you get them both to be right, he's like, "It's a really exciting time" at that point in time. I think that was very much the investment thesis on what we now call URBN. We have moved well beyond that, and it's been 100% intentional. Free People is at scale now, where they're a large business. You've got Urban Outfitters, where the recovery is well on the way, and you've got Anthropologie, which is a very large, powerful, successful brand with growth ahead of it. You've got two younger brands that we don't know necessarily what the ceiling is, but they're now meaningful. Nuuly, knock on wood, should eclipse $700 million this year. FP Movement should be over $500 million this year. FP Movement's profitability is close to Free People's profitability from a rate perspective. They're already double digits. Nuuly's hitting high single digits. I think oftentimes the parts are very important, but I think it's the consolidated portfolio now that really enables us to invest and to learn and to continue to drive consistent results from a top-line and a bottom-line perspective. You saw it when Urban Outfitters was challenged, and we were transitioning from a leadership perspective. Anthropologie and Free People were able to carry the weight, and Nuuly at that time was a business we were investing in that wasn't profitable. Now, you're seeing Anthropologie, which gets a lot of focus, and we sort of chuckle back home and say, "Geez, if this is bad at a 3% comp and low teens operating profit, we're pretty darn happy." But we know the high standards that Tricia and her team have set for themselves to be at a mid-singles and to be mid-teens. They'll get back there. They're slightly off the bullseye. Free People is crushing it, Nuuly is growing, and you've got the Urban turnaround story. The strength of their portfolio, I think, really allows us to deliver consistent results in a way that Urban Outfitters, Inc. wasn't known for years ago. But I think we're resetting the expectations, certainly for ourselves, and it's been intentional, as well as I think, I hope, for the external market. And by having this big portfolio as well, you are able to, as Melanie said, to be able to invest and learn. And I mentioned earlier how fashion, we don't share across the board, but we do from a shared services perspective. There are certain areas like marketing. We'll try different platforms, we'll try different campaigns and things of that nature, because you're always testing and learning from marketing. That'd be like, oh. And if we see success, whether it be one or the other, some of those things will be shared. Not the creative execution, not the look, and not the feel, but I saw this segmentation or this personalization or this thing tied to the infrastructure, or how the website is set up. And to be able to have multiple businesses at scale, across geographies, across categories, and learn from each other, you know, we honestly think it's just something that's going to propel us for many years to come. Great. In our last few minutes here. I know. I'm watching the clock. In our last few minutes, I want to wrap up with the tech stack. One of the things that we're focused, or my team's focused on, are which companies have made the compounding investment over multiple years to get to the point where AI can be really a big driver. Because of Nuuly, I feel like you were sort of catapulted into this, your new DCs, the efficiency of the supply chain, and using a lot of digital data. In the world of life beyond 10% margins, which it just seems like you articulated so many drivers of those, how important is having the right tech stack, and where are you in the maturity of that to be able to really capitalize on AI and all the great things that are happening? Yeah. One, I think it's really exciting, and I think it's going to be critically important. I can certainly tell you we're in the early innings. I don't know whether it's two years, two months, but certainly not 10 years, we'll be able to say we're in the middle innings because the technology and the strength of it is just moving at such a fast rate. It feels like everyone's job and function will be favorably impacted in some way, from finance, the analysis, and reporting, enable of information. From a merchandising perspective, being able to see and read and react from an analysis that we're able to get. Speeding up the product lifecycle calendar. One of the things that's driven our markdown rate down over the last 10 years was in 2016, we adjusted our calendars. We weren't slow by any means versus industry comparisons, but we knew that the faster you are, the more successful it will be. We think technology is going to be another unlock to be able to speed up our calendars and allow our creative teams, the merchants, the designers to, one, make decisions closer into demand, which is going to make them more accurate, and it gives them just new tools and capabilities to expand their creativity. Being able to build an asset digitally versus having to hand sketch it and make changes. They're able to sort of enhance what they're able to build and see and understand and move fabrics in and understand drapes and things of that nature. It's so exciting. If you think about marketing and how you'll be able to be smarter about personalization, be smarter about segmentation on your outbound campaigns, it's going to touch every end of the business. There's no question about it. I think we've got a lot of things that we're testing and learning from. But I would say it's still early innings, but it's something that we don't go a day, maybe not an hour, honestly, as an organization, without talking about. Great, and that is right on time. Yeah. I hope just from this, that people take away how truly differentiated URBN is. I've covered the stock, as I said, for a couple of decades, and this is about as good as I've ever seen the team executing. Great. Thank you very much. I acknowledge you, Tricia. Thank you very much. Thank you. Thanks for coming. Thank you.