Urban Outfitters, Inc. (URBN) | Investment Case

1. Company Snapshot

1.a. Company Description

Urban Outfitters, Inc.engages in the retail and wholesale of general consumer products.The company operates through three segments: Retail, Wholesale, and Nully.

It operates Urban Outfitters stores, which offer women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women's casual apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45.The company also operates Bhldn stores, which offer heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations; and Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories.In addition, it operates Free People retail stores, which offer casual women's apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; restaurants; and women's apparel subscription rental service under the Nuuly brand name.

The company serves its customers directly through retail stores, Websites, mobile applications, catalogs and customer contact centers, franchised or third-party operated stores, and digital businesses.As of January 31, 2022, it operated 261 Urban Outfitters, 238 Anthropologie Group, and 173 Free People stores in the United States, Canada, and Europe; and 10 restaurants, as well as two Urban Outfitters and one Anthropologie franchisee-owned stores.The company is also involved in the wholesale of young women's contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and home goods through department and specialty stores worldwide.

The company was founded in 1970 and is based in Philadelphia, Pennsylvania.

Show Full description

1.b. Last Insights on URBN

Breaking News: Urban Outfitters Inc has been delivering strong performance in the battered retail sector. The company has reported several quarters of accelerating retail comps growth, outpacing its struggling peers. Despite tariff pressures, Urban Outfitters has been expanding its gross profit, showcasing strong operational execution. The company aligns with the strategy of rotating into lagging sectors and small/mid-cap value stocks. Analysts view Urban Outfitters as a gem in the retail sector, with a buy recommendation given its promising outlook and operational efficiency.

1.c. Company Highlights

Last Price	75.72
Change Percentage	-4.38%
Open	78.58
Previous Close	79.19
Market Cap ( Millions)	6792
Volume	1789600
Year High	80.71
Year Low	41.89
M A 50	67.84
M A 200	65.01

FCF Yield	8.75%
Dividend Yield	0.00%
ROE	19.20%
Debt / Equity	43.79%
Net Debt / EBIDTA	134.76%
Price To Book	2.53
Price Earnings Ratio	13.99
Price To FCF	11.43
Price To sales	1.13
EV / EBITDA	11.78

2. Urban Outfitters' Q3 2026 Earnings: A Strong Performance Across All Brands

Urban Outfitters, Inc. reported a robust third quarter for 2026, with total revenues surging 12% to a record $1.5 billion and net income rising 13% to a new Q3 record of $116 million or $1.28 per diluted share. The company's gross profit dollars increased 13% to a record $563 million, with a gross profit rate improvement of 31 basis points. The earnings per share (EPS) of $1.28 exceeded estimates of $1.19, indicating a strong operational performance. With a P/E Ratio of 13.03, the market seems to have reasonably priced in the company's growth prospects.

Publication Date: Nov -26

                                    📋 Highlights
                                    Revenue & Profit Growth::
                                                Q3 revenues rose 12% to $1.5B, net income up 13% to $116M ($1.28/share), driven by all brands reporting positive comps.
Nuuly Subscription Surge::
                                                Subscription segment revenue grew 49%, highlighting strong customer engagement and expansion in southern U.S. regions.
Gross Profit Expansion::
                                                Gross profit hit $563M (+13%), with a 31-basis-point margin improvement despite 60-basis-point tariff impact in Q3.
Store Expansion Strategy::
                                                Opened 8 Anthropologie stores YTD; plans to add 43 new stores in 2026, including 18 Free People and 25 FP Movement locations.
Brand Performance::
                                                Urban Outfitters delivered 13% global retail comp; Anthropologie saw 50% customer count growth, driven by full-price sales and modernized product lines.

                                

Segment Performance

All brands produced positive comps across all geographies, with Urban Outfitters delivering a 13% global retail segment comp, Free People a 9% increase in total revenue, and Anthropologie Group an 8% retail segment comparable sales increase. Nuuly, the subscription segment, drove double-digit revenue growth of 49%. The Urban brand delivered a positive low single-digit segment margin in Q3, and the company expects improved operating margins in Q4 versus the prior year.

Operational Highlights

The company plans to open 43 new stores for the year, including 18 Free People and 25 FP Movement stores, and has opened eight new Anthropologie stores in North America year to date. The company reported strong performance across all brands, with record sales and double-digit operating profitability. The Urban Outfitters brand posted significant profit improvement, driven by better product, improved marketing, and more full-price customers.

Guidance and Outlook

For the fourth quarter, the company expects total company sales to grow in the high single digits, with Retail segment comp sales growing mid-single-digit positive. The company still believes it can achieve approximately 100 basis points of gross margin improvement for the full fiscal year 2026 despite tariff headwinds. The effective tax rate is expected to be about 23.5% in Q4, with an SG&A growth rate similar to Q3.

Valuation and Growth Prospects

With a ROE of 19.33% and an ROIC of 11.72%, the company is demonstrating a strong ability to generate returns on equity and invested capital. Analysts estimate next year's revenue growth at 9.9%, indicating a continued growth trajectory. The current valuation metrics, including a P/S Ratio of 1.05 and an EV/EBITDA of 10.62, suggest that the market has reasonably priced in the company's growth prospects.

3. NewsRoom

Retail Stock Has More Room to Run After Earnings

Dec -04

Source: schaeffersresearch.com

Urban Outfitters: Rating Upgrade On Turnaround And Broad Demand Strength

Dec -03

Source: seekingalpha.com

Dow Jones Retail Giant Walmart, Three Others In Or Near Buy Zones

Dec -02

Source: investors.com

Urban Outfitters: A Gem In A Battered Retail Sector

Dec -01

Source: seekingalpha.com

Urban Outfitters (NASDAQ:URBN) Trading Down 3.8% After Analyst Downgrade

Nov -29

Source: defenseworld.net

Big retailers project calm and confidence this holiday season, while smaller businesses scramble

Nov -28

Source: marketwatch.com

Boston Partners Raises Stock Position in Urban Outfitters, Inc. $URBN

Nov -28

Source: defenseworld.net

Why Urban Outfitters Stock Jumped Today

Nov -26

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.93%)

6. Segments

Retail

Expected Growth: 7%

Urban Outfitters' 7% retail growth is driven by effective omnichannel strategies, strong brand recognition, and a focus on experiential retail. The company's ability to adapt to changing consumer preferences, invest in digital marketing, and optimize store layouts have also contributed to its growth. Additionally, the company's focus on sustainability and social responsibility resonates with its target demographic, further driving sales.

Wholesale

Expected Growth: 5%

Urban Outfitters' wholesale segment growth is driven by increasing demand for its Anthropologie and Free People brands, expansion into new international markets, and strategic partnerships with prominent retailers. Additionally, the company's focus on digital marketing and e-commerce optimization has contributed to the 5% growth rate.

Nuuly

Expected Growth: 8%

Nuuly's 8% growth driven by increasing demand for clothing rental services, particularly among Gen Z and millennials seeking sustainable fashion. Strong brand recognition, convenient subscription model, and frequent new arrivals also contribute to growth. Additionally, Urban Outfitters' existing customer base and infrastructure provide a solid foundation for Nuuly's expansion.

Intersegment Elimination

Expected Growth: 0%

Urban Outfitters, Inc.'s Intersegment Elimination with 0% growth is driven by the absence of significant transactions between segments, stable organizational structure, and consistent accounting practices, resulting in minimal eliminations. This suggests a well-integrated business model with no material intercompany activities.

7. Detailed Products

Women's Apparel

Urban Outfitters offers a wide range of trendy and fashion-forward clothing for women, including tops, dresses, pants, and outerwear.

Men's Apparel

Urban Outfitters provides a curated selection of stylish and modern clothing for men, including graphic tees, denim, and statement pieces.

Beauty and Wellness

Urban Outfitters offers a variety of beauty and wellness products, including skincare, haircare, and fragrances from popular brands.

Home and Accessories

Urban Outfitters sells a range of home decor and accessories, including bedding, kitchenware, and decorative items.

Gifts and Novelties

Urban Outfitters offers a selection of fun and quirky gifts, including stationery, accessories, and novelty items.

Vintage and Second-Hand

Urban Outfitters sells a curated selection of vintage and second-hand clothing and accessories.

8. Urban Outfitters, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Urban Outfitters, Inc. faces moderate threat from substitutes due to the presence of online retailers and fast-fashion brands offering similar products.

Bargaining Power Of Customers

Urban Outfitters, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand image and unique products limit customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Urban Outfitters, Inc. relies on a diverse supplier base, which reduces dependence on individual suppliers. However, the company's reliance on a few large suppliers for certain products gives them some bargaining power.

Threat Of New Entrants

The fashion retail industry has high barriers to entry, including significant capital requirements, established brand recognition, and complex supply chains. This limits the threat of new entrants to Urban Outfitters, Inc.

Intensity Of Rivalry

The fashion retail industry is highly competitive, with many established players competing for market share. Urban Outfitters, Inc. faces intense rivalry from companies like H&M, Zara, and Gap Inc.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	33.80%
Debt Cost	3.95%
Equity Weight	66.20%
Equity Cost	11.68%
WACC	9.07%
Leverage	51.05%

11. Quality Control: Urban Outfitters, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Urban Outfitters

A-Score: 5.4/10

Value: 6.3

Growth: 6.9

Quality: 6.1

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Gap

A-Score: 5.0/10

Value: 6.6

Growth: 4.7

Quality: 5.2

Yield: 7.0

Momentum: 5.0

Volatility: 1.3

1-Year Total Return ->

American Eagle Outfitters

A-Score: 4.4/10

Value: 6.6

Growth: 4.6

Quality: 4.5

Yield: 6.0

Momentum: 2.5

Volatility: 2.0

1-Year Total Return ->

Abercrombie & Fitch

A-Score: 4.3/10

Value: 7.1

Growth: 8.3

Quality: 6.8

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

Boot Barn

A-Score: 4.2/10

Value: 2.3

Growth: 8.0

Quality: 5.9

Yield: 0.0

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

Burlington Stores

A-Score: 3.8/10

Value: 2.0

Growth: 5.9

Quality: 4.7

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.40%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.07%

Urban Outfitters, Inc. - US9170471026

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on URBN

1.c. Company Highlights

Stable Momentum

Average Yield

Average Growth

Earnings Beats

Revenues Beats

Strong Momentum

Average Quality

Fairly Valued

Medium Volatility

Revenues Miss

Better Quality

2. Urban Outfitters' Q3 2026 Earnings: A Strong Performance Across All Brands

Segment Performance

Operational Highlights

Guidance and Outlook

Valuation and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.93%)

6. Segments

Retail

Expected Growth: 7%

Wholesale

Expected Growth: 5%

Nuuly

Expected Growth: 8%

Intersegment Elimination

Expected Growth: 0%

7. Detailed Products

Women's Apparel

Men's Apparel

Beauty and Wellness

Home and Accessories

Gifts and Novelties

Vintage and Second-Hand

8. Urban Outfitters, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Urban Outfitters, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

75.72$

Current Price

75.72$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA