Urban Outfitters cleared estimates with its Q2 results late Wednesday, reporting record sales and net income for the quarter. However, shares retreated Thursday. Retailers were generally mixed on Wednesday as Abercrombie & Fitch shares eased after its report in the morning, while Kohl's stock scrambled higher.
Urban Outfitters reported a 27% increase in earnings to $1.58 per share on 11.3% revenue growth to $1.5 billion.
FactSet expected earnings of $1.48 per share on $1.479 billion in revenue.
Comparable sales increased 5.6% to outpace views for 4.9% growth. All three of Urban Outfitters' main brands saw same-store sales growth.
Anthropologie sales climbed more than 6% to $606.95 million, just ahead of analyst views for $606 million.
Revenue for Free People rose to $415 million, while FactSet expected $410 million.
Nuuly, the company's clothing rental business, saw revenue jump more than 53% to $138.93 million. Analysts expected $141 million in sales.
Urban Outfitters Brand Sales Beat Views, Tariff Warning
Meanwhile, the number of average active subscribers jumped 48.1%.
Sales for Urban Outfitters' flagship brand increased to $333 million, beating forecasts for $318 million.
As of July 31, total inventory increased by 15.1% vs. last year.
CEO Richard Hayne said he was "proud" of Urban's record revenues, profit and earnings, which included "exceptional performance" across all its segments. He believes the results reflect the strength of the company's brands and is "confident" momentum will continue.
COO Frank Conforti during the earnings call said that tariff rates have increased for many countries, and expects tariffs during the second half of the year will impact gross margins by 75 basis points. The company is working on mitigation strategies and negotiating with vendors, Conforti said. Urban Outfitters expects to manage through the current environment to achieve 100 basis points of gross margin improvement for 2026, based on what the company knows currently.
URBN stock retreated 10.7% Thursday to tumble back below its 50-day moving average.
Urban Outfitters on Aug. 7 hit a record high of 80.71 following a cup-with-handle breakout from late July.
Shares are still up 27% this year.
Abercrombie Issues Tariff Warning
Abercrombie & Fitch on Wednesday beat views for its Q2 results, but warned that tariffs will hit full-year results.
Earnings declined to $2.32 per share adjusted, but still beat views for $2.30 per share. Sales rose 7% to $1.2 billion, edging out expectations for $1.19 billion.
Hollister brand sales grew 19%, marking its best-ever second quarter. Abercrombie brand sales declined 5%.
The company lifted its 2025 outlook, with CEO Fran Horowitz citing Abercrombie's "strong positioning and growth trajectory."
Abercrombie now expects 5%-7% sales growth for the year, up from its prior outlook for 3%-6%. The company expects its operating margin in the range of 13%-13.5%. Its previous forecast expected a margin of 12.5%-13.5%. Abercrombie lifted its full-year earnings forecast by $1 to range from $10-$10.50 per share.
The full-year outlook includes about $90 million in expected tariff expenses, which represent 170 basis points as a percentage of net sales.
FactSet analysts expect earnings of $10.19 per share on 5.6% revenue growth for the year.
Abercrombie expects Q3 earnings per share of $2.05 to $2.25, which missed Wall Street estimates for $2.49 per share.
ANF stock reversed from an early climb to slide 1.3% Wednesday. Abercrombie climbed 1.2% Thursday. Shares are down 35% so far this year.
Kohl's Soars Results
Kohl's on Wednesday reported earnings of 56 cents per share adjusted, which crushed forecasts for 30 cents. Net sales declined 5.1% to $3.35 billion to just beat views for $3.32 billion.
Comparable sales declined 4.2%, but that was better than expectations for a 5.1% drop.
Despite the sales decline, interim CEO Michael Bender in the release said that the company's initiatives are "beginning to resonate with our customers." During the earnings call, Bender noted that lower- to middle-income customers are facing the most pressure in the current environment, and are prioritizing value and trading down to lower price points. Higher-income customers have been more resilient, he said.
Kohl's continues to invest in its proprietary brands to provide greater price flexibility for customers, Bender said during the call.
Kohl's narrowed its sales forecast for the year to range from a 5%-6% decline, from its previous outlook for a 5%-7% decline. The retailer sees earnings ranging from 50 cents to 80 cents per share adjusted, up from its earlier earnings guidance for 10 cents to 60 cents per share. FactSet analysts expect earnings of 49 cents per share adjusted for the year.
KSS stock spiked nearly 24% Wednesday. Shares pared their gains Thursday with a 5% decline. Kohl's is up 9.4% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
