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URBN Stock Falls 12% Despite Broad-Based Holiday Sales Gains

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Key Takeaways

  • URBN shares dropped 12.3% despite holiday sales growth that missed analysts' expectations.
  • Urban Outfitters posted 9% holiday net sales growth, driven by Retail gains across digital and stores.
  • URBN saw strong Subscription growth of 43% and a 13% rise in Wholesale sales, led by Free People.

Shares of Urban Outfitters, Inc. (URBN - Free Report) fell 12.3% during yesterday’s trading session following the company’s holiday season sales performance. Results, though solid overall, fell short of analysts' expectations, hurting investor sentiment.

Let’s Dig Deeper Into URBN’s Holiday Results

For the two months ending Dec. 31, 2025, Urban Outfitters reported a 9% year-over-year increase in total net sales, moderating from the 10% rally posted in the year-ago period. This growth is primarily attributed to a notable 7% rise in the total Retail segment net sales, with a 5% increase in comparable Retail segment net sales. Growth in this segment was fueled by mid-single-digit gains across both digital channel activity and retail store sales.

Brand-level results within the Retail segment showed varied momentum. Urban Outfitters delivered a 9% increase in comparable Retail segment net sales, Free People achieved a 5% improvement, and Anthropologie posted a 3% rise. Within the Free People family, the FP Movement brand delivered particularly strong results, posting an 18% year-over-year jump in comparable Retail sales, while the Free People brand achieved a modest 1% increase.

The Subscription segment continued its strong upward trajectory, recording a 43% year-over-year increase in net sales. This substantial growth was primarily driven by a 41% jump in average active subscribers from the prior-year period.

The company’s Wholesale segment also delivered a healthy performance, with net sales climbing 13% year over year. This advance was largely powered by higher Free People wholesale volumes, especially through expanded sales to department stores.

URBN Stock Past-Year Performance

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Urban Outfitters’ 11-Month Performance Details

Looking at the 11 months ended Dec. 31, 2025, Urban Outfitters maintained its upward trajectory with an 11% year-over-year increase in total company net sales. The Retail segment continued to show positive trends, with a 8% increase in net sales and a 6% rise in comparable Retail segment net sales. Again, mid-single-digit gains across both digital channel activity and retail store sales contributed to this growth. 

The Subscription segment continued to deliver exceptional results, posting a 51% increase in net sales, largely driven by a 46% rise in average active subscribers from the prior-year period.

The Wholesale segment also performed well, generating a 15% increase in net sales due to higher Free People wholesale sales, driven by increased demand from specialty customers and department stores.

URBN’s Store Details

During the first eleven months of fiscal 2025, Urban Outfitters expanded its physical presence by opening 58 retail locations, comprised of 36 Free People locations (including 21 FP Movement stores), 13 Anthropologie stores and 9 Urban Outfitters stores. Over the same period, the company closed 7 stores, including 5 Urban Outfitters locations and 2 Free People stores.

As of Dec. 31, 2025, Urban Outfitters’ portfolio consists of 252 Anthropologie stores across the United States, Canada and Europe, supported by catalogs and digital platforms, 264 Free People stores (including 84 FP Movement locations) in the United States, Canada and Europe, along with catalogs and e-commerce, and 259 Urban Outfitters stores in the United States, Canada and Europe, complemented by online channels. 

The company also operated nine Menus & Venues restaurants, in addition to seven Urban Outfitters franchise-owned stores and two Anthropologie franchise-owned stores.

Conclusion

While investor expectations briefly overshadowed URBN’s holiday performance, the company’s growth across Retail, Subscription and Wholesale underscores a solid multi-channel strategy. Continued execution in digital and Subscription offerings positions URBN well heading into fiscal 2026. Shares of this Zacks Rank #2 (Buy) company have rallied 28% in the past year compared with the industry’s growth of 4.1%.

Three OtherSolid Picks

Some other top-ranked stocks are FIGS Inc. (FIGS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and The Gap, Inc. (GAP - Free Report) . 

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests a decline of 23.6% and growth of 2.4%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It currently flaunts a Zacks Rank of 1.

The Zacks Consensus Estimate for Gap’s fiscal 2026 earnings and sales implies a decline of 2.7% and growth of 1.8%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 19.1%.

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