Urban Outfitters (URBN) Unveils Holiday Sales & Store Update
Urban Outfitters, Inc. URBN has shared its sales figures for the final two months and the cumulative eleven months of 2023. This announcement reflects the prominent lifestyle products and services company's ongoing growth and expansion in the retail sector. It is known for its global consumer brands, including Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly, and has seen diverse and positive financial performances across its various segments.
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Let’s Dig Deeper
For the two months ending Dec 31, 2023, Urban Outfitters reported a 10% year-over-year increase in total net sales. This growth is primarily attributed to a notable 8% rise in the total Retail segment net sales, with a 6% increase in comparable Retail segment net sales. A significant factor contributing to this growth has been the robust performance in digital channel sales, exhibiting high-single-digit growth, coupled with a steady increase in retail store sales.
The performances of specific brands under the Urban Outfitters umbrella are awe-inspiring. Free People's comparable Retail segment’s net sales jumped 20% year over year, while Anthropologie enjoyed a 14% increase. However, the Urban Outfitters brand saw a 13% year-over-year decrease in comparable net sales.
The Wholesale segment of the company showed a healthy 15% year-over-year increase, largely driven by augmented sales of Free People's wholesale, especially to department stores and specialty accounts. This rise, however, was slightly offset by a reduction in wholesale sales of Urban Outfitters.
The Nuuly segment, a relatively recent addition to the company's portfolio, marked an extraordinary 71% year-over-year surge in net sales. This surge is largely credited to a significant 58% rise in subscriber numbers from 2022.
Looking at eleven months ended Dec 31, 2023, Urban Outfitters maintained its upward trajectory with an 8% year-over-year increase in total company net sales. The Retail segment continued to show positive trends, with a 6% increase in net sales and a 5% rise in comparable Retail segment net sales. Again, digital sales and store sales contributed to this growth.
However, the Wholesale segment experienced a slight setback with a 4% year-over-year decrease mainly due to reduced Free People wholesale sales to department stores. On a brighter note, the Nuuly segment saw an impressive 92% surge in net sales, bolstered by a significant 58% increase in subscriber numbers from the end of 2022's comparable period.
Store Details
During the eleven months of 2023, Urban Outfitters expanded its physical presence by opening 26 retail locations, including 11 Free People, 7 Urban Outfitters, 7 Anthropologie stores, and 1 Menus & Venues restaurant. Conversely, the company closed 12 locations, encompassing 5 Urban Outfitters stores, 4 Anthropologie brand stores, 1 Free People brand store and 2 Menus & Venues restaurants. Another new Urban Outfitters franchisee-owned store was opened during these eleven months.
As of Dec 31, 2023, Urban Outfitters’ portfolio consists of 265 Urban Outfitters stores, 241 Anthropologie stores and 198 Free People stores across the United States, Canada and Europe, along with websites and catalogs for these brands.
The company also operates 10 Menus & Venues restaurants, 7 Urban Outfitters franchisee-owned stores, and 2 Anthropologie franchisee-owned stores. The wholesale divisions of Free People, FP Movement and Urban Outfitters maintain the company's global product distribution through department stores, specialty stores, various digital platforms and the company's Retail segment.
Wrapping Up
Urban Outfitters’ performance in 2023 exhibited a successful blend of growth, adaptability and strategic foresight. The company adeptly navigated the dynamic retail landscape, leveraging its diverse brand portfolio and expanding its market presence physically and digitally.
Additionally, significant growth in the Nuuly segment and the ongoing global expansion of its core brands position Urban Outfitters as a resilient and forward-looking player in the global retail market. Shares of this Zacks Rank #3 (Hold) company have rallied 29.8% in the past year compared with the industry’s growth of 14.7%.
Three Solid Picks
A few better-ranked stocks are The Gap, Inc. GPS, Abercrombie & Fitch Co. ANF and Deckers Outdoor Corporation DECK.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current fiscal-year sales indicates growth of 387.5% from the previous year’s reported figures. GPS has a trailing four-quarter average earnings surprise of 138%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a 60.5% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 13.3% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 21.9% and 13.4%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 26.3%.
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