- Revenue & EPS Growth: Q4 revenue rose 10% to $1.8B; adjusted EPS jumped 38% quarterly and 35% annually.
- Nuuly Expansion: Revenue grew 43%, with 40% higher average active subscribers and $21M profit increase.
- Brand Performance: Anthropologie achieved 5-year positive comps (4% Q4 growth); Free People and Urban Outfitters delivered 10% revenue increases.
- FY '27 Guidance: Targets high single-digit sales growth, 25 bps gross margin expansion, and $385M in capex for stores/logistics/tech.
- Strategic Investments: SG&A to grow faster than sales initially due to AI/tech spending; $57M net new store openings planned.
Segment Performance
All of URBN's retail segment brands delivered positive comps, with four out of five brands posting record fourth quarter sales. Anthropologie delivered a 4% increase in retail segment comp, driven by strength in its own brands, such as Maeve and Pilcro. Free People achieved a retail segment comp of over 5% and strong gains in the Wholesale segment, driven by the continued strength of FP Movement. Urban Outfitters continued its positive momentum with a global Retail segment comp of 10%, driven by healthy sales comps in North America and Europe.
Nuuly's Strong Growth
Nuuly delivered another exceptional performance, with total revenue growing by 43% and a 40% increase in average active subscribers. The brand surpassed its goal of $500 million in annual revenue and increased its total profitability by over $21 million. Management is confident in Nuuly's continued growth potential, citing a significant awareness gap in the market.
Guidance and Outlook
For fiscal year '27, URBN expects positive high single-digit total company sales growth, driven by mid-single-digit Retail segment comp and mid-double-digit revenue growth at Nuuly. The company is planning for a 25 basis point gross margin expansion, with some SG&A margin pressure. The effective tax rate is expected to be approximately 22% for the year.
Valuation
With a P/E Ratio of 12.67 and an EV/EBITDA of 10.86, URBN's valuation appears reasonable, considering its strong growth prospects. The company's ROE of 17.66% and ROIC of 11.5% indicate a strong ability to generate returns on equity and invested capital. Analysts estimate next year's revenue growth at 8.6%, which is in line with the company's guidance.