Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc. Second Quarter Fiscal 2026 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you'll need to press Star, one, one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press Star, one, one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today, McCullough, Executive Director of Investor Relations. Please go ahead, Ms. McCullough. Good afternoon and welcome to URBN Second Quarter Fiscal 2026 Conference Call. Earlier this afternoon, the Company issued a press release outlining the financial and operating results for the three and six month period ending July 31st, 2025. The following discussions may include forward looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the Company's filings with the Securities and Exchange Commission. For more detailed commentary on our quarterly performance and the text of today's conference call, please refer to our Investor Relations website at www.urbn.com. I will now turn the call over to Dick. Thanks Oona and good afternoon everyone. The URBN teams delivered another outstanding quarter. Total sales grew by 11% and net income increased by 22%, both new second quarter records. We are especially pleased to report that all brands produced positive comps across all geographies, including the Urban brand in North America. The agenda for today's call includes comments from Frank Conforti, our Co-President and COO, who will elaborate on Q2 performance by brand and business segment and address the tariff situation. After Frank, we will spend some time talking about the exciting second quarter successes at the Urban Outfitters brand. Speaking to this will be Sheila Harrington, Global CEO of Urban Outfitters, Emma Wisden, Urban Outfitters' European President, and Shea Jensen, North American President. After that, Melanie Marein-Efron, our CFO, will walk you through our outlook for the second half. I will then wrap things up with a few closing thoughts before we open the call up for your questions. I now turn the call over to Frank. Thank you, Dick, and good afternoon, everyone. Today I'm excited to share our company's second quarter results compared to last year, and then I will dive into some detailed notes by Brian. Overall, our teams delivered another outstanding quarter, exceeding our plans and setting new sales and profit records. Total Urban sales grew by over 11%, reaching a Q2 record of $1.5 billion. All of our retail segment brands delivered positive retail segment comps, and four of our five brands posted record second quarter sales. Nuuly continued to deliver exceptional performance as the brand posted record revenue and operating income driven by an increase of 120,000 average active subscribers compared to the prior year. Our total sales growth was partly driven by a 6% increase in the retail segment comp, with Urban's comps being similar in both channels. Nuuly delivered impressive 53% revenue growth with a 48% increase in average active subscribers. Additionally, the wholesale segment delivered an 18% increase in revenue driven by growth in all channels of distribution. Next, I will turn your attention to gross profit. URBN saw a 15% increase in gross profit dollars, reaching a record $566 million. The gross profit rate also improved nicely by 113 basis points, rising to 37.6%. The improvement in gross margins was primarily driven by lower markdowns, largely driven by the Urban Outfitters brand, as well as occupancy leverage driven by the strong top line growth in the quarter. SG&A increased by 13%, deleveraging by 28 basis points. The growth in SG&A dollars was primarily driven by increased marketing spend, which fueled sales and customer growth for all brands. The marketing efforts drove increases in traffic and transactions both in stores and online for total URBN, while Nuuly campaigns resulted in healthy double-digit growth in average active subscribers. Overall, total URBN operating income rose by 20% compared to last year, reaching $174 million, while the operating profit rate improved by 85 basis points to 11.6%. Net income saw a 22% increase to a new Q2 record of $144 million, or $1.58 per diluted share. Now, moving on to brand performance, starting with Anthropologie, the Anthropologie team had another fantastic quarter, achieving a 6% increase in their retail segment comp, which marks over four years of consecutive quarterly positive comps. This success was fueled by equal strength in the digital and store channels, both of which benefited from increased traffic and transactions. Every product category saw positive regular price and total sales comps, with strong performance across shoes and accessories in addition to apparel and home. Strength in apparel was driven by the team's continued success in expanding their product offering to fit their customers' full lifestyle. In addition to Celandine, an Anthro own brand offering year-round vacation-ready styles and Daily Practice, Anthro successfully launched another own brand, Lyrebird, providing an expanded assortment of intimates and lounge. All three Anthropologie owned brands showed strong growth within the second quarter and continued to expand the customer share of wallet with Anthropologie. Within the home category, home accessories led the growth, driven by fashion newness. As part of Anthropologie's ongoing strategy to serve a multi-generational customer across all aspects of her lifestyle, the brand recently marked a major milestone with the launch of their in-house Maeve label as a standalone brand. This launch reflects meaningful progress on the strategic priorities Tricia outlined last August to focus on investment in own brand development, enhancing selling environments, delivering inspirational creative content, and expanding the customer base across age demographics. In August, the brand implemented a robust full funnel marketing strategy, and we are planning to open the brand's first standalone store this fall in Raleigh, North Carolina. The marketing campaign has exceeded our expectations, and we are excited to open our first store. We believe this evolution of Maeve reinforces Anthropologie's commitment to brand-led growth, lifestyle expansion, and unlocks further opportunity to build on the momentum already underway while strengthening relevance with high-value customers across generations and ushering in a new era of customer engagement. Based on our current plans, we believe the Anthropologie Group could deliver a mid-single digit positive retail segment comp in Q3. Next, let's turn our attention to another impressive performance by the Free People team. They delivered a 14% increase in total revenue and double-digit operating income growth. Their sales growth was driven by a 7% retail segment comp and a 19% increase in Free People wholesale segment revenues. The positive retail segment comp was driven by similar comps in both the store and digital channels, and positive comps across all major product categories. Non-comp sales grew by over 200%, boosted by the opening of new Free People and FP Movement stores. The brand successfully opened an additional 10 stores in the second quarter, including five Free People and five FP Movement stores. The FP Movement brand delivered robust total growth of 30%, driven by a 14% retail segment comp and wholesale segment sales growth of 52%. The brand continues to make significant progress on our long-term strategic focus to build our performance apparel business. The brand had a strong 360-degree marketing campaign focused on sports bras and bottoms, with both categories delivering healthy double-digit comps. The brand saw double-digit increases in new, reactivated, and retained customers during the quarter. Based on our current plans, we believe the Free People retail segment could deliver a mid-single-digit positive comp in Q3. Wholesale revenues increased by 19% during the quarter, driven by sales gains in all channels and geographies. As we move into the back half of the year, the wholesale channel faces more difficult year-on-year comparisons versus the prior year. Based on our plans, we believe the wholesale channel could deliver mid-single-digit growth in the third quarter. Finally, let's touch on the Nuuly business, which delivered another exceptional quarter, achieving its most profitable quarter ever and beating our previous best operating profit rate from last year's second quarter by over 300 basis points. The brand continues to outperform our most optimistic expectations. The 48% growth in average active subscribers contributed to a 53% increase in brand revenue and added 4 percentage points of revenue growth to total URBN sales. The strong revenue growth in the second quarter resulted in leverage in almost every expense line item, helping to deliver a record second quarter operating profit of 9%. As we scale the Nuuly business, we see further opportunity for growth and are primarily focused on building brand awareness. That is why we are investing in more upper funnel marketing efforts, most notably our latest campaign, which launched in August. This campaign builds on strong momentum from the successful first quarter marketing campaign. While the first quarter campaign focused on broad education around the value of clothing rental, this new campaign speaks specifically to our target audience. It positions Nuuly as the solution to common wardrobe challenges faced by our core demographic like feeling overwhelmed with clothing options yet still having nothing to wear. Our first quarter campaign was instrumental in expanding awareness with 66% of new subscribers indicating they had never rented clothing before. Our first brand awareness campaign launched last year in the third quarter followed by a first quarter campaign this year both contributed to significant new customer growth and drove a measurable increase in market awareness. We believe that due to Nuuly's predictable recurring revenue model as well as the strong retention profile, we can make thoughtful marketing investments that yield returns over multiple future quarters. We look forward to continuing to increase brand awareness and drive new subscription adoption now and in future quarters. To support Nuuly's growth, we are expanding our logistics operations in Kansas City, Missouri from 600,000 sq ft to 1 million sq ft. The brand is currently adding storage capacity in this additional space to hold more rental products. We believe this expansion will be complete by mid next year. We are also adding new sortation automation in Kansas City to drive a more efficient operation that should be delivered in the back half of next year. These investments will continue to support Nuuly's robust growth which we believe could provide further operational leverage. Nuuly's performance on top and bottom line continues to strengthen our confidence in the business model. We believe that we are leading the industry and that there is a very large and growing opportunity in the U.S. for apparel rental. The performance at Nuuly over the past year has fortified our confidence to push the business forward with further investments and expansions. Based on our current plans, we believe Nuuly could deliver healthy double-digit revenue growth in the third quarter. Now, moving on to tariffs. Since our previous call, the landscape continues to change as tariff rates have increased for many countries as of today and based on new assumptions, we believe the impact for the second half of the year could be approximately 75 basis points to gross margins. Our teams continue to work on mitigation strategies, including negotiating better terms with our vendors, diversifying our countries of origin, changing our mode of transportation from air to ocean, and strategically adjusting pricing to minimize the impact on our customers. Although tariffs present a temporary challenge to our business, we are confident in our ability to manage through this environment and still achieve approximately 1,100 basis points of gross margin improvement for the full fiscal year 2026. I want to stress that this plan is based on what we know today. In summary, it was an exceptional quarter. All brands delivered positive retail segment sales comps, both the wholesale and subscription segments drove double-digit revenue growth, and all brands recorded healthy operating income improvement. We could not be prouder of the teams and their amazing execution. I want to take a moment to especially congratulate the Urban Outfitters team for their significant progress in returning the brand to growth and improving profitability. On that note, I will now turn the call over to Sheila Harrington. Thank you, Frank, and good afternoon. I'm very pleased to report that Global Urban Outfitters delivered 5% revenue growth this quarter with a 4% comparable sales increase in our retail segment. This represents the second consecutive quarter of positive comparable growth across our global business, highlighted by double-digit comp growth in Europe and positive comp growth in North America. Notably, this quarter saw year-over-year double-digit growth in gross profit and strong improvement in operating income. Based on the strong back-to-school sales reads, we believe that the brand can achieve mid-single-digit retail segment comparable sales growth in the second half while continuing to build on its profitability. I want to congratulate and thank Shea, Emma, Meg, and their teams for delivering these strong results. Their strategic leadership, operational discipline, and consistent focus on the customer with creativity and passion have been instrumental in driving this change. Starting with our E.U. business, we delivered an 11% comparable sales increase in the retail segment with strong performance across both channels. Led by stores, over the past five years, Urban Outfitters Europe has achieved a 15% compounded annual growth rate. This quarter's results were driven by solid growth in both the U.K. and continental Europe, with strength across both channels in Europe. Emma will share further details on our long-term plans for continued European expansion. Our positive Urban Outfitters North America business reflects sequential improvement across both channels, with stores delivering positive results and DTC driving strong regular price comps. It is clear Shea's strategic growth initiatives introduced last year are yielding positive results. We look forward to seeing continued progress in this region. This momentum across regions, including the acquisition of new customers globally, reduced reliance on promotions, and growth in regular price sales, gives us confidence in the significant growth potential for the brand in both North America and Europe. The strength and positive reception of our proprietary product globally, combined with our ability to tailor products to local consumer preferences, remain key drivers of our success. We are positioning Urban Outfitters globally not only to recover but return as a growth brand for URBN. Our teams are well prepared for this growth in both regions. Now Emma Wisden will share more on the Urban Outfitters E..U business and growth opportunities, followed by Shea Jensen, who will speak about the North America business. I will now turn the call over to Emma. Thank you, Sheila, and good afternoon. I'm pleased to report another strong quarter for the Urban Outfitters brand in Europe, with performance coming in ahead of our expectations. Building on the momentum from the first quarter, our Europe business delivered double-digit growth in the second quarter across several key categories, supported by stellar product execution, disciplined inventory management, and a continued focus on the customer experience. Women's apparel and accessories were clear standouts, with strong double-digit growth driven by an exceptional bottom cycle and viral items that resonated with customers. Men's and home also performed well, while our proprietary brands continued to gain market share. Stronger, more localized inventory management lifted conversion both in stores and online and led to a markdown rate close to historical lows. From a marketing perspective, our strategy of authentic, community-driven activations is paying off. We've seen a significant increase in both reach and engagement, outpacing industry benchmarks. Collaborations with emerging artists and cultural communities are reinforcing our brand relevance, and our digital campaigns are delivering strong results. Regionally, the U.K. remains a highly established business with over a decade of strong customer connection, and our primary focus now is on mainland Europe, where we are still in the early stages of growth but gaining momentum. Germany is our second largest market with 18 stores and a growing digital business, and we're building momentum quickly in France, Spain, and Italy. Our consistent growth over the past several years gives us confidence to open more stores across both Northern and Southern Europe and continue to expand our marketing efforts. All of this has been possible because of the strength of our leadership team. Their stability and experience have been crucial to delivering consistent divisional growth year after year. Looking ahead, our plan is not just about near-term wins. It's a long-term strategy that we believe in, one that's delivering results today and setting us up for future success. I will now turn the call over to Shea to speak to the North American business. Shea, thank you. Emma, and good afternoon. This time last year we laid out our strategy to recover the North American business. Today, I'm happy to report on the significant progress we've made. We are not only executing the plan we outlined, but we're also building incredible momentum and I'm excited to share the details with you. Over the past year, our team has passionately focused on our customers. We've evolved our product assortment to appeal to a broader target audience, built and applied new marketing strategies to acquire more customers, and adapted our channels to offer a more relevant experience. We're also operating with greater discipline, especially in inventory management and expense control. Because of these efforts, our business continues to stabilize. We delivered a strong single digit comp in the month of July with growth in both channels and a positive through the second quarter. With inventory more aligned to sales and disciplined expense management, we made incredible progress on our bottom line. We reduced markdowns by hundreds of basis points and leveraged almost all areas of expense, considerably reducing our loss compared to last year's second quarter and year to date. From a product perspective, we continue to apply customer insights and research to evolve our assortment, aiming to appeal to a broader range of our target customers. Our strategy is anchored in denim and lounge where our customers told us we were winning with great fit, exceptional comfort and value. We've deliberately invested in and grown these businesses with our foundation built in our two hero own brands, BDG Denim and Out from Under, Lounge and Athleisure. These brands have grown by more than 30% year to date and now represent a considerable portion of our overall women's apparel business. As a lifestyle retailer, we recognize the opportunity to differentiate ourselves in the market by amplifying our accessories, novelty and gifting categories. These categories offer our customers moments of discovery, experience and price accessibility. Uniquely positioning Urban Outfitters as a destination, they drive trips and build engagement. Over the past year, these categories have grown exponentially and delivered some of the most exciting and exclusive products in our offer from fun collaboration to limited edition items. In addition to our category distortions and growth, we've recalibrated our pricing architecture. We now have a better balance of opening, mid and better price points with the goal of offering the best price to value combination on every item we sell. Opening price points now represent approximately 15% of our total assortment and the customer continues to respond to these products. We've also broadened the range of occasions and categories we serve and offer to ensure our assortment is now more relevant to our target customers. Our assortment has evolved to include occasions such as game day and sorority rush and we've broadened our size range. Overall, o ur women's business is healthy, driving strong comps, and we're confident that our focus on offering relevant products at the right price and on time for the occasion she attends is a winning recipe from a marketing perspective. We're extremely excited about the progress the team is making. Second quarter new customer growth was at 17% with an increasing number of these customers aligning with our target demographic. Our team has been working to engage these new customers to drive brand loyalty and repeat trips. With a reactivation rate in the quarter up double digits, these new customers are shopping full price, spending more than prior cohort, and shopping more frequently. Our marketing progress reflects our team's clear strategy to engage customers authentically not just in more places, but in the right places, on the right platform, and in more intentional and coordinated ways across creative, brand, and performance media. In addition to acquiring and activating new customers, we saw increased brand affinity as our unaided brand awareness grew in the quarter. More young customers are being welcomed into the brand through the team's compelling, creative, culturally relevant conversation and exciting collaborations with brands our customers know and love. We're also excited about the progress we've made in adapting our selling experiences to be more relevant for our customers. We know our stores are a valuable asset and a place our customers love to shop in our stores. We've evolved our selling model, repositioning our staff to reflect a more welcoming environment. We've also updated our in-store merchandising to support our new product strategy, allowing for ease of shopping while still offering the inspirational styling Urban Outfitters is known for on our website. Our new creative takes center stage and reflects the occasions our customers shop for and attend in both channels. Our net promoter scores are up meaningfully, indicating customers are pleased with our efforts. While much progress has been made, we recognize this is a journey and we have more work to do. The back to school season is underway and our Q2 strength continues. Our college stores are abuzz, welcoming students back to campus and the spirit of game day, reconnecting and meeting new friends is in the air. Looking ahead, we're excited about the work underway to rebuild our men's apparel business, the opening this fall of a remodeled store featuring a newly designed store environment, and the continuation of our current strategy. With solid momentum, continued sequential improvement in our top line sales, and disciplined control of expenses and inventory, we believe we will continue to deliver progress on our path to profitability. Finally, I would like to congratulate and thank our team on the results they've delivered. The planning, collaboration, and commitment they've brought to the brand has been incredible, and I'm grateful. I especially want to thank and recognize our leadership team who I have the opportunity to work with day in and day out. I know I speak on their behalf. When I say we feel optimistic that t he best is yet to come. I will now turn the call over to Melanie. Thanks Shea, and good afternoon everyone. Let me walk you through how we're thinking about our third quarter financial performance. We are excited to announce that we are off to a solid start this quarter. Based in part on our strong start to the quarter, we're planning for total company sales to grow in the high single digits for the quarter. In our retail segment, comp sales could grow mid single digit, driven by mid single digit positive retail segment comps at Anthropologie, Free People brands, and the Urban Outfitters brand. At Nuuly, the brand could deliver mid double digit revenue growth driven by continued subscriber momentum. Finally, our wholesale segment could produce mid single digit growth. Based on our current sales performance and plan, we believe URBN's full year gross profit margins could increase by approximately 100 basis points, with second half growing by approximately 50 basis points versus last year. Within the second half, third quarter gross margins could be flat versus last year as lower initial product margins from increased tariffs offset improvements in occupancy leverage and lower product markdowns. Fourth quarter gross profit margins could increase by approximately 75- 100 basis points as lower product markdowns, particularly at the Urban Outfitters brand, offset lower initial product margins from increased tariffs. Our current assumptions on tariffs are based on the announced tariff rates as of August 27, which includes 50% tariff rates on goods from India. Turning to SG&A for the second half of the year, we expect expenses to grow approximately in line with sales based on current sales performance and plans. The planned growth in SG&A is mainly driven by higher marketing spend to support customer and sales growth, along with increased store labor costs related to new store locations. For the third quarter, our brands are planning outsized marketing investments driven by brand campaigns at the Nuuly and Anthropologie brands, along with a pre-holiday push to drive customer acquisition ahead of the fourth quarter holiday season. As a result, we believe marketing expenses could deleverage in the third quarter while leveraging in the fourth quarter. As always, if sales performance fluctuates, we maintain a certain level of variable SG&A spending that we can adjust up and down depending on how our businesses perform. We are currently planning for an effective tax rate of about 23.7% for the quarter and 23% for the full year. Now onto inventory. We ended Q2 with slightly elevated inventory levels as we intentionally brought in product early to reduce the impact of announced tariff increases. In Q3, we expect inventory could grow at a rate similar to third quarter sales as our teams continue to focus on increasing our product turns. For fiscal year 2026, capital expenditures are planned at approximately $270 million. The fiscal year 2026 capital project spend is broken down as follows. Approximately 50% is related to retail store expansion and support, approximately 25% is related to supporting technology and logistics investments, and the remaining 25% is for home office. Expansion to support our growing businesses. Lastly, we're planning to open approximately 69 stores and close approximately 17 stores this fiscal year. Most of our net new store growth will come from FP Movement, Free People, and Anthropologie. Specifically, we're planning 25 new FP Movement stores, 18 new Free People stores, and 16 new Anthropologie stores. As a reminder, the foregoing does not constitute a forecast but is simply a reflection of our current view. The company disclaims any obligation to update forward-looking statements. With that, I'll hand it back over to Dick. Thanks, Melanie. What an incredible quarter. Each brand has cause to celebrate. Our two larger brands continue to attract more new customers and take additional market share, this while generating mid-teen profitability. As you heard earlier, the Urban brand smashed sales expectations in Europe and broke into positive comp territory in North America due to a very strong back-to-school season. Both newer brands, FP Movement and Nuuly, drove outstanding double-digit revenue comparisons and posted record profitability in total. Our portfolio of brands is a fantastic collection of consumer favorites, each one successful on its own. The foundation of this success is a healthy consumer combined with excellent brand execution. During the quarter, customers remained enthusiastic about fashion newness, and we delivered compelling products and distinctive experiences. Together, this produced a record second quarter performance. I do want to take a moment to recognize and thank the Urban brand teams on both sides of the Atlantic for their results. The turnaround in North America is real, with the brand recording nicely positive comp sales during the crucial back-to-school season. Both North America and Europe registered strong growth in new customers and better full-price selling. The Urban Outfitters brand is now clearly trending up globally and regaining its mantle as a preferred destination for young adults. Congratulations to both teams. Looking forward, success for all brands has continued August to date, and we are planning to deliver high single-digit growth in total sales for Q3. Both consumer demand and our execution remain strong. The only major headwind we currently face is the uncertainty surrounding tariff rates. We're confident that the product sourcing diversification URBN adopted post-COVID will serve us well as we navigate this lack of clarity. Overall, the future for our brands appears bright, and we believe there are many more record quarters to come. Finally, my thanks to our entire URBN family, brands, and shared services for producing another outstanding quarter. I want to acknowledge the phenomenal job each of our brand leaders and Meg Hayne have done. I understand the amazing amount of hard work and long hours you and your teams devote to making our brands among the best in retail today. Our results are a testament to your efforts and your talent. Lastly, I thank our partners around the globe and our shareholders for your ongoing support. That concludes our prepared remarks. We now invite your questions. Certainly. Ladies and gentlemen, we'd like to ask that if you do have a question during today's program, you limit yourselves to one question each. Our first question comes from the line of Paul Lejuez from Citi. Your question please. Thanks, guys. I think you gave the Tasman pass on a net. I'm curious if maybe you could talk about what the growth impact is and how much of the mitigation you are driving with pricing action, looking to take prices higher, reduce promotions. Also, just curious if you could talk about at a very high level the performance of your own brand, which came up several times during the call. Performance of own brands versus national brands at Urban and Anthropologie. Thanks. Hey Paul, it's Frank. I can take the first part of your question. Yes, you're correct that we're focused on the net here versus the gross as we're focused on our mitigation strategies as it relates to pricing. Honestly, we have a sort of four-pronged approach and pricing is really the last piece and that's intentional. We're focused on protecting that customer experience as much as we possibly can. First, our first piece there is negotiating better terms with our vendors. Second is going to be shifting our countries of origin where possible. Third is going to be adjusting our mode of transportation from air to ocean. Lastly, it's going to be gently raising prices. What I want to stress there is that the teams are being very thoughtful about the final step. We're looking to protect opening price points and only targeting areas where we believe we could gently raise some prices without significantly affecting the overall customer experience. I think to the credit, to the sourcing, to the brand teams, to the logistics teams, despite the tariff headwinds which we discussed would be about 75 basis points over the back half of the year, and that does include India at 50%. We did hold our gross profit margin goal of hitting 100 basis points of improvement this year. That feels really good given the tariff headwinds and the mitigation efforts that we've put into play. Okay, let's talk about own brand penetration, starting with you, Tricia, at Anthropologie. Yeah, hi, Paul. I can speak a little bit to Anthropologie. We've been focused on growing our own brands for the last several years and really pleased with the results that our buying, design, creative teams have been putting in. Our own brand total portfolio is growing at double digits, and that's not to say that our market brand partners are not growing, they're just growing at a faster rate. Our penetration of own brands currently sits at a bit of a record high at about 71% of our total business. Very pleased with not only the new brands that we've launched across Celandine, Daily Practice, and Meyerbird, but really thrilled with the results that we're seeing with Maeve and excited about the new plans that we have to expand that further. Thanks. Tricia. I can jump in for Global Urban, and then Emma or Shea can jump in and support. We're thrilled with the proprietary brand growth in both Europe and North America. I feel like, as Shea spoke to, BDG and Out From Under have been particularly strong brands with high levels of growth this year, supported by both the product and the marketing efforts on both. Over in Europe, the same thing is happening. BDG and Its front, both extremely strong, resonating really well with their consumer. That being said, I think the North America team in particular has done an amazing job with some of its national brand support. Whether it's a Owala or Baggu, the reintroduction of Nike have supported just the total customer interest. Thank you, Sheila. Emma, do you have anything to add? Thanks, Dick. Yes, I think just to sort of reiterate really what Tricia and Shea said, the proprietary brands in Europe have been very key to our success across sensibilities. Talking to mostly the casual brand, if you like, where we are distorting. BDG was mentioned, but also our streetwear brand iets frans, has been exceptional in driving exclusivity and hype and foot traffic. Yes, been great. Thanks, Emma. Our next question then. Our next question comes from the line of Lorraine Hutchinson from Bank of America. Your question, please. Thanks. Good afternoon. I wanted to follow up on the pricing conversation. Frank, I know you said you'd be pricing gently. Are you pricing at all major brands? Will you focus on the higher price points? If you could just help us out a little bit strategically with how you'll be executing this. It is a lot of tariff pressure to offset. I think there are a lot of q uestions on how much of this w ill be passed to the consumer. Now let's let Tricia answer that about Anthropologie, and then Sheila, if you'd like to answer about Urban and Free People. Yeah, I think, Lorraine our pricing strategy, as Frank mentioned, is really to look at some gentle price increases where we feel like there's the value that can contribute to that. Making sure that we're protecting some of the opening price points that the customer counts on and some programs that we know drive a lot of volume. I think the combination of really gentle price increases really maintains our AURs and the growth of that at a rate that feels comfortable to the business, then offsetting the rest of tariffs around negotiations with our factories and trying to understand how to hold that line without making any significant price increases. We don't think that'll have any impact on our sales ability. I feel like for Free People and Urban, definitely echoing exactly the same strategy, recognizing the value equation is really important to all of our consumers. We want to maintain our opening price point, our welcoming price point for our consumers so they can participate in the brand, and then where possible, asking the customer to join in the value equation and raising our high AUR a little bit more gently than not touching openings. Great, thank you. Next question. Our next question comes to the line of Adrienne Yih from Barclays. Your question, please. Great, thank you. A huge congratulations and shout out to everybody in all brands, all divisions. Congrats. I guess my first one is for anybody who wants to chime in on this. As we're looking at kind of back to school and sort of the denim cycle, we've seen kind of the wide silhouette everywhere, but it seems like there's a new wave of the premium over $100 denim that seems to be taking hold, a little bit of an elevation. Can somebody, by brand, or if somebody wants to take that on, hold. Frank, I'm still stuck on the tariff thing. You're really mitigating it extremely well, the fourth quarter in particular. Frank or Melanie, up 71- 100 basis points. Can you help us kind of shape t he eight, seven tariffs and now India as of today based on your turns, would those necessarily be impactful to the holiday and, you know, the back half of the year, or is there some hangover effect that kind of bleeds out into spring of next year? Thank you. I can certainly take the tariff one. I don't think the brands want me touching any denim fashion trends. Yes, our plan does include the 50% all-in tariff on India right now. I do want to stress when we talk about shifting countries of origin, which is an impactful mitigation strategy, we talk about doing that where possible. Obviously, the ability for a factory in a country to execute our product is critically important. We also talk about when appropriate. What I mean by this is the tariff landscape is changing day to day right now and we want to protect our customer experience and that means protecting our product. We're not going to make extensive changes that are going to impact our products right now or our customers. I think we're going to try and do the best that we can waiting for the dust to settle before we start to make extensive changes. That being said, we've got great relationships with our vendors. We have a very flexible sourcing network. I think the first two strategies of working back with our vendors to help negotiate better terms to mitigate some of the impact, as well as some of the things that we've been able to do in adjusting countries of origin, have certainly led the way in helping offset the tariff. Yes, the impact that's hitting today for India, I think it hits for air, any air receipts after today, and ocean in the next couple of weeks will absolutely have an impact on our fourth quarter. We turn our business here pretty quickly and that is baked into our plans and absolutely that will have some carryover into the first half of next year as well. And Adrienne, I'll take a shot talking about denim for all three brands. Ladies, if I make mistakes, please f eel free to correct me. I think what we see is an opportunity to offer a number of different silhouettes in leg openings, rises, and colors. That's exactly what we're doing. I want to stress that the full legged bottoms are still by far the number one silhouette that the customer is voting for. I hope you all remember, and Adrienne, I'm sure you will, you've been with us for a long time, that we've been talking about the full legged silhouette since before COVID. This is nothing new to us. I think there are varied silhouettes from straight to flare to full leg. Certainly, our next question comes in line. Matthew Boss from JPMorgan, your question please. Thanks and congrats on a nice quarter. Thank you, Matt. Dick, I guess how would you characterize health of the global consumer into the back half today? Can you speak to trends that you've seen across concepts in August, and then for Shea at the Urban brand, I guess could you just elaborate on the best is yet to come maybe A s it relates to additional opportunities, that Y ou see from here? Sure, Matt. Let me try the consumer. We think that consumers are feeling very optimistic and we have noticed t hat they're behaving accordingly. You know, from our customer purchasing data, Q2 shows that the sales were up very nicely in mid digits, but traffic was very positive both in the stores and online. Transactions were up, conversion improved, and new PT was up as well. The only decrease we saw was in AOV. This was largely driven by the shift in mix by category. Lower price areas like athleisure and lounge and accessories outperformed some of the more expensive categories, and that's what drove the lower AOV. I guess our conclusion from this data is that our customers remain very enthusiastic about acquiring the latest fashion, and they're finding our assortments very compelling. Hi Matthew, it's Shea. First of all, I think I just want to amplify our enthusiasm about our results. I think just to clarify what we meant by the best is yet to come. We have a lot of momentum in the business, and I think our results reflect that our plan is working. Our strategies are definitely paying off. I think we see a continuation of those results in back to school as we're heading into the third quarter. That gives us a lot of confidence as we look ahead into even the holiday season. We intend to continue to deliver sequential improvement. We believe that will result in continued growth on the top line. We intend to manage with continued discipline on the bottom line. We certainly hope that doing those two things and staying focused on our plan will drive us toward the path to profitability. Thank you. Next question, please. Certainly, our next question comes to the line of Alex Straton from Morgan Stanley. Your question, please. Perfect. Just a couple for me, maybe for W hoever is best suited. Just any thoughts on what the end W hat the de minimis exemption means for the competitive landscape and any comments on if you use that at all. Maybe for Frank or Mel, I t seems like the spread between total s ales growth and comp should narrow in the back half compared to the front half. I should make sure that's right. If you can comment on what exactly drives that change. Thanks so much. Great. Frank, you want to take it? Yeah. Thanks, Dick. And thanks, Alex. The de minimis for honesty is really immaterial. We have just a very small amount of sales that we utilized and received that benefit on. It's obviously just not something that we're worried about that's going to impact our business. As it relates to the spread between total and the retail segment comp shrinking a little bit, I think that's probably largely about wholesale. Wholesale had really strong double-digit gains in the first half of the year. They start to anniversary those strong double-digit gains in the back half of the year, so as we say, they're up against a more difficult comparison. I think, as Melanie said on the call, we're planning sort of mid-single digits in the back in the third quarter and back half. That's probably the biggest piece. Alex, I will say about the minimus that as far as the Urban brand is concerned, it can only help. I mean some of the folks who were big into this Shein and some others are obviously having a little bit harder time coping with some of the new regulations. To the degree that they're shipping less, it should help us. Okay, next question. Certainly. And o ur next question comes from the line of Mark Altschwager from Baird. Your question please. Great, thank you for taking my question. You definitely sound more bullish on the momentum you're seeing at U O. I was hoping you could update us on how you're thinking about the progress for profitability at that brand and whether break even could be in the cards this year with the top line that you're seeing. Sorry. Thanks Mark. This is Frank. We are definitely more bullish, and again, congratulations to Sheila, Shea, and Emma on just the incredible performance. I think the strategy they put and the teams that they've built. We're just excited to see the turnaround and the significant progress in the second quarter, building on what started last year. We are not giving a timeline on return to profitability. That will not be this year. I feel comfortable saying that. I want to say that we, and stress here that we are planning for and believe we can drive consistent, steady progress to achieve profitability. To do this right, it's going to take some time, and I think the brand is doing it right. Focusing on MMU, you're seeing that from the reg price sales gains sort of leading the way. Now you're seeing total comps come into play. You started to see that MMU recapture, and then as the comps grow, you'll start to see things like occupancy and other fixed expenses leverage, which will start to benefit the bottom line. I think the brand's going about it the right way, focusing on the consumer, focusing on that reg price sale, and we're certainly on the right track. Thank you. Next question, please. Certainly. Our next question comes from the line of Dana Telsey from Telsey Advisory Group. Your question please. Hi, good afternoon. Two quick ones. When you think about the framework for T he third and fourth quarter, I just W ant to make sure I heard it right. I think you said SG&A up in l ine with sales for the second half. With marketing deleverage in the third quarter and leverage in the fourth, any clarification on that, the magnitude of m arketing spend and just lastly on the r eal estate portfolio, how you're thinking about some of the remodels and new stores. Now with Maeve, what you see i s the opportunity there? Thank you. Thanks, Dana. I'll start with your question about SG&A for the second half. I just wanted to highlight, we did leverage in the first half and we think that we can grow sales and expenses in line with that sales growth. By quarter there is a little bit of unevenness as a result of the marketing campaign. You will see in the third quarter we have a bit of deleverage, and then in the fourth quarter it comes back with leverage. You want Tricia. You want to talk about the real estate, Maeve? Sure. Hi Dana. We're really excited to launch our first standalone Maeve store this fall, looking at a three to four store test through the course of spring. We're planning to really read and react to those results to determine what the longer term growth plan could be. I'm very excited to get the first store open, lots to learn, very excited to be able to share more of the Maeve brand with our customers, and excited to see what happens. The store is in Raleigh, yes? Correct. Yep. Raleigh, North Carolina. Thank you. Next question. Certainly. Our next question comes from the line of Marni Shapiro from The Retail Tracker. Your question please. Hey guys, congratulations to everyone. Source has been fantastic. I am also going to stay away from Denham and that conversation and kind of shift. Could we get an update on what's going on with the home assortment, specifically at Anthropologie, and then Shea at Urban Outfitters, where you launched a great dorm assortment followed by that Chipotle assortment, which I thought was fabulous? Could we also get an update on what the timing for the improvement on men at Urban Outfitters looks like? Are you seeing a different trend in Europe that makes you hopeful about how that will come to pass in the U.S? Tricia, you want to talk about Anthropologie? Yeah, happy to, Marni. Our teams have been working incredibly hard on our home assortment, and as I've mentioned before, really focused on driving profit and making some really nice gains. I'm very proud of the fact that we've now delivered our third consecutive quarter of comp increases in the home business. That's largely been driven by really fantastic growth in categories like home accessories and textiles. The furniture business continues to be challenging, but the comps are lessening as we head into Q3. Overall, I think we believe that we can still continue to deliver low single digit comp increases in home, and just really proud of the team's progress that we've made there and feeling like w e're in a really great place. Shea, would you like to talk about men's at Urban? Yeah. Hey Marni, first let me just talk briefly about, you mentioned the Chipotle collab, which was really, really exciting. Obviously, Chipotle is a brand that's really well known by our customer. We were really excited to partner with them as it is part of our strategy to partner with some of the best and most well known brands. We last week launched a collab with some dorm furniture accessories. It was really well received, brought in a lot of new customers for us, really exciting, had great, great, well received product acceptance by the customer, and just overall was really exciting. It is a great example of what we want to do more of, which is partnering with great brands that the customer loves and bringing some great product to market. We were real excited. We think Chipotle was real excited, and thanks for noticing and asking the question. As far as the men's assortment goes, we're really excited to be in the progress of rebuilding the men's assortment with a great new leader in place. We think that the timing on that is forthcoming. I would expect, probably by spring, that you'll really see a noticeable difference in that assortment, with some evolution between now and then as we build towards that. Your question about working with Emma and team, we do work really close with them and share a lot of conversations. With that, maybe I'll flip it over to Emma to talk about some things that are working in her men's business. Okay. So I can jump in for Emma. I feel like just like with everything, the Zoom phenomenon, we get just a little challenged. Emma and her team have driven tremendous year over year growth in men's. They've been able to learn about their men's business in the U.K., in Germany, and the proprietary brands that they have have really made an impact. Now she's up and running. I'm going to let her say In her own words, Yes, huge apologies there. I think menswear in Europe is particularly strong. There are certain regions, particularly northern Europe, that distort in menswear, but essentially the casual brands, BDG and iets frans are extremely strong on menswear as they are on womenswear. Those streetwear brands and denim brands are really driving great performance. Okay, thank you. Marni. I hope you've got your leave it here Chipotle doormat. No, everybody wants one. Okay, next question please. Certainly, our next question comes from the line of Sole Jay from UBS. Your question, please. Thanks so much. My question about Nuuly, I think you mentioned in the prepared remarks that it surpassed even your highest expectations. If you just take a step back and think about what you saw over the last 90 days, can you just reframe what the big picture opportunity is at Nuuly today from a total sales and margin perspective if you look out, say, three or five years? Okay, Dave, take it away. Thanks for the question, Jay. Appreciate it. I would reiterate a lot of the e xcitement you've already heard on the call and just say that w e have a similar amount of excitement for Nuuly. It's kind of steady growth and steady progress. We continue to add new subscribers. Awareness continues to grow as we do m ore and more marketing campaigns and r eceive m ore word of mouth from our subscribers, t elling their friends and their family about what Nuuly is. We think there's an incredible amount of a wareness still to be had out in the market. We're seeing a lot of our new subscribers that have never rented before, so they're really new to the rental model. As we said in the prepared remarks, that's about 66% we saw in the second quarter. We think that there's a really sizable opportunity here and w e think the market is actually. A lot bigger than a lot of people may believe at the moment. I think rental apparel is a very viable business and a very viable market. We think we're leading now in that market and are very excited about that opportunity. We continue to see sizable growth and we're excited about where we are in August currently. At the moment, we're at about 370,000 active subscribers for where we are currently, and we think the third quarter is going to continue with a lot of growth. So v ery excited about it. Thank you. Next question, please. Certainly. Our next question comes from the line of Janet Joseph Kloppenburg from JJK Research Associates. Your question please. Hi everybody, and congratulations. A couple of quick ones. Have you in fact executed some price increases? I was wondering, you know, the elasticity levels that you are e xperiencing p eople for a minute. What d rove that acceleration, particularly at FP Movement. I wanted to ask Dick, given the success of the marketing program, if he thought that, you know, marketing as a percentage of sales could continue to tick higher. Thank you. Okay, Sheila, you want to talk about price increases? I think you have had some, but not many. Yeah, I'll take the first two questions. I think there was something about FP Movement as well. We've been very thoughtful about where to do our price increases, really leaving opening as it is and really focusing on where we could gently raise prices according to the value of the product, some higher priced jackets and select pieces in our assortment. We're feeling very good about it. Our customer has been very, very receptive to where we've made those changes. I think the merchants have studied very hard where they're asking the customer to pay a small amount more. Like Richard mentioned, we are seeing lower price point categories certainly penetrate deeper, whether it be accessories or intimate classes, etc. Janet, I'll talk a little bit about the marketing. We do have two, as Frank talked about, two projects going right now. One is in Nuuly and the other is to introduce Maeve at the Anthropologie brand. Marketing expenses will go up a little bit in the third quarter. We expect it then to come back w own in the fourth quarter. As far as next year is concerned, we think it's a little too early to start talking about what we're going to do next year, so we'll save that for the November call. Okay, thank you very much. Oh, I was just a question about FP Movement. Actually, on that note, FP Movement. We're thrilled with the performance of our FP Movement across the three channels of business: wholesale, retail, and direct, where the team is thrilled with the impact of performance. It's been a long road to really focus on making sure we're delivering on the prominence of performance as well as fashion, and we're making significant inroads on that front. I think with that momentum, I think there will be a very sticky customer as we continue to build. I'm with you 100%, Sheila. We are in love with FP Movement. Thank you all very much for joining the call, and we hope to see you back in a few months. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.