Prepared remarks
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1 | P a g e URBAN OUTFITTERS, INC. Second Quarter, FY’27 Conference Call August 26, 2026 Participants Richard A. Hayne, Chief Executive Officer Frank Conforti, Co-President & COO Margaret Hayne, Co-President & CCO Sheila Harrington, Global CEO, Urban Outfitters & Free People Groups Emma Wisden, President, Urban Outfitters, EU Shea Jensen, President, Urban Outfitters, North America Tricia D. Smith, Global CEO, Anthropologie Group Melanie Marein-Efron, CFO Azeez Hayne, Chief Administrative Officer Dave Hayne, Chief Technology Officer, URBN and President, Nuuly David Ziel, Chief Development Officer Oona McCullough, Executive Director of Investor Relations Good afternoon, and welcome to the URBN second quarter fiscal 2027 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 31, 2026. 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. Please note, on today’s call, management will be speaking to our financial results on an adjusted basis which does exclude one -time benefits related to refunds for IEEPA tariffs previously paid, associated interest income and a tax benefit related to the release of a valuation allowance against certain foreign net deferred tax assets. Each of these items is detailed in our press release as well as the investor presentation that is posted to our URBN investor relations website. I will now turn the call over to Dick.
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2 | P a g e Dick Hayne Thank you, Oona. In the second quarter, our teams once again produced record quarterly sales and earnings per share. Net sales grew 10% to $1.7B, operating income increased by 11%, and EPS grew 9% to $1.72. This marks the eighth consecutive quarter of record sales and profits. I salute our leaders and their teams for their talent, hard work, and remarkable consistency. Additionally, all Retail segment brands delivered positive ‘comp s’ and the Wholesale and Subscription segments registered record second quarter results, as well. Now to provide more details on our Q2 performance, I’ll pass the call over to Frank Conforti, our Co-President and Chief Operating Officer. After Frank, Dave Hayne, President of the Nuuly brand will update you on our Subscription rental business. Following Dave, our CFO, Melanie Marein- Efron, will walk you through our outlook for Q3 and the second half of the year. I will then wrap things up with a few closing thoughts before we open the call for your questions. Frank, it’s all yours. Frank Conforti Thank you, Dick, and good afternoon, everyone. Today, I’m excited to share our Company’s second-quarter record results, then I will dive into some detailed notes by brand, followed by a tariff and fuel costs update. Overall, our teams delivered another outstanding quarter, exceeding our plans and setting new sales and operating profit records. Total URBN sales grew by over 10%, reaching a Q2 record of $1.7 billion. All our Retail segment brands delivered positive Reta il segment 'comps', while four of our five brands posted record second-quarter sales. Nuuly continued its impressive double-digit revenue growth and our Wholesale segment also delivered exceptional double -digit revenue growth. Our total URBN sales growth was partly driven by a 6% increase in the Retail segment 'comp,' with digital 'comps' slightly exceeding store ‘comps’. Nuuly delivered strong 29% revenue growth, driven primarily by an increase of almost 113,000 average active subscribers compared to Q2 last year. Additionally, the Wholesale segment delivered a 19% increase in revenue, driven by growth across both specialty and department store accounts. Next, I will turn your attention to gross profit. URBN saw an 11% increase in gross profit dollars while the gross profit rate increased by 4 bps to 37.7%. Due to strong sales, we nicely leveraged store occupancy expense and through several impactful init iatives which improved our customer service and lowered our expense per package, we were able to leverage delivery expense despite the negative fuel surcharges related to the war. These benefits were partially offset by higher initial merchandise costs due to higher year over year tariff costs, inbound freight fuel surcharges and