Urban Outfitters, Inc. (NASDAQ:URBN) reported record third-quarter earnings and revenue on Wednesday, driven by broad-based growth across its brands and a surge in subscription revenue, sending shares up 12.7% in early trading.
The lifestyle retailer posted earnings per share of $1.28, beating analysts’ estimate of $1.19, while revenue rose 12.3% to a record $1.53 billion, exceeding expectations of $1.48 billion. Net income for the quarter reached $116.4 million.
All three of Urban Outfitters’ main brands sold more compared with the same period last year, with Urban Outfitters up 12.5%, Anthropologie up 7.6%, and Free People up 4.1%. Subscription revenue soared 48.7%, driven by a 42% increase in active subscribers. Wholesale segment sales were up 7.6%, led by Free People sales to specialty customers.
Gross margin improved 30 basis points to 36.8%, while operating margin held steady at 9.4% despite tariff headwinds. Retail segment sales increased 9.6%, with comparable retail sales up 8%, reflecting strong performance in both stores and digital channels.
“We are pleased to report record revenues, profits, and earnings per share for the quarter,” said CEO Richard Hayne. “These results underscore the strength of our diversified business model, enabling us to continue capturing market share and drive consistent long-term growth.”
Jefferies analysts maintained a Hold rating on Urban Outfitters, noting the company’s record performance and growth across all brands, including Nuuly’s 49% revenue gain. Analysts highlighted strong brand strength, continued store expansion, and marketing effectiveness, while cautioning that tariffs and rising SG&A costs could pressure margins in the coming quarters.
“Strategic investments in own brands, marketing, and store expansion continue to fuel growth, positioning URBN for a strong holiday and further market share gains,” Jefferies analysts wrote.
Urban Outfitters is scheduled to open 69 new stores in fiscal 2026.