Urban Outfitters Inc (URBN) closed FY26 fiscal year with a record-setting $6.17 billion in net sales, an 11.1 per cent increase that underscores the success of its multi-brand diversification strategy. While its traditional retail banners showed steady momentum, the standout performer was Nuuly, the group’s apparel subscription service. Nuuly’s annual revenue increased by 50.2 per cent to $568 million, surpassing internal targets and officially transitioning from a high-growth startup to a core contributor representing 10 per cent of total group turnover. This shift toward a circular fashion economy has proven a critical buffer against the promotional volatility currently impacting the broader apparel sector, as average active subscribers jumped 45 per cent Y-o-Y.
Operational discipline and sourcing resilience
Despite a 12.8 per cent increase in inventory levels and persistent tariff headwinds, URBN achieved a 126-basis-point expansion in its full-year gross profit margin, which reached a record $2.22 billion. This profitability was engineered through a rigorous ‘regular price’ selling strategy and a reduction in markdown activity, particularly within the Anthropologie and Free People banners. The company is actively mitigating trade pressures - estimated at a 75-basis-point drag- by reconfiguring its sourcing geography and optimizing transportation logistics. Management’s capital allocation remains aggressive, with $270 million earmarked for 2026 to fund 69 new store openings, including a fleet of ‘Gen Z-friendly’ format stores designed to recapture younger demographics through immersive, modular retail environments.
Headquartered in Philadelphia and founded in 1970, URBN operates a lifestyle portfolio including Urban Outfitters, Anthropologie, Free People, and Nuuly. With a 2026 net income of $464.9 million, the group is focused on 5.9 per cent annual earnings growth and achieving a 60 per cent responsibly sourced material target by 2027.
