The last, but certainly not least, of our holiday winners is Urban Outfitters(URBN).

Urban Outfitters is a multinational lifestyle-oriented retail chain that targets young adults. It sells fashionable clothing, footwear, beauty and wellness products, housewares, and vinyl records under the Urban Outfitters, Anthropologie, and Free People Brands — and operates a rapidly growing women’s apparel subscription rental service called Nuuly.

Fiscal 2025 Q3 Earnings --- stock soared 18.3% on November 27th

• Revenue up 6% YoY to a record $1.4 billion (beat)
• EPS up 25% YoY to $1.10 (beat)
• Expects Q4 total comparable sales to be similar to Q3

Company Updates

Non-namesake banners like Anthropologie and Free People are driving near-term growth for Urban Outfitters. The company is also getting a boost from Nuuly which grew sales 48% last quarter.

Average active Nuuly subscribers increased 21% sequentially in Q3 and passed the 300,000 mark in November. The up-and-coming apparel rental business is resonating with budget-minded women looking to simultaneously limit new clothes spending and expand their wardrobe with company-owned, third-party, and one-of-a-kind vintage items.

Management noted a strong start to the holiday shopping season in its latest earnings call — including at Urban Outfitters where consumer reception of holiday apparel, gifts, and decorations has been positive. Next year, Urban Outfitters will launch a dance-inspired Tinashe collection to capitalize on the exercise and fashion intersection trend.

Skyrocketing Stock Price

URBN recently reported stronger than expected earnings with sales up 6% reaching $1.4 billion.

In its earnings call the President of Urban Outfitter’s Inc. noted, “the holiday season has started well, and they are seeing traffic momentum in their selling channels. They are managing inventory with more discipline, aligning it with sales.”

As consumer spending remains robust during the holiday season, URBN is confident that its Q4 earnings will mirror Q3.

Wardrobe Innovator

URBN is capitalizing on the growing rental clothing market through its popular subscription service, Nuuly.

Nuuly allows customers to rent outfits for 30 days at a fraction of their retail value, offering a great deal for consumers. As a result, the service’s subscriber base surged to 297,000 in Q3, a 51% increase from the previous quarter.

This growth has also translated into a strong revenue boost, with Nuuly's earnings rising 48% to $97 million compared to the prior quarter.

Boosting Brands

Urban Outfitters is delivering robust growth across its portfolio.

Last quarter core sales rose 6%, led by Free People's 10% gain and FP Movement's standout 30% growth. FP Movement plans 25 new stores, while Anthropologie posted its eighth straight quarter of double-digit operating income growth.

LikeFolio web data suggests suprising strength in URBN’s core namesake banner and substantial continued growth in Nuuly, its rental brand.

Takeaway

Urban Outfitters’ recent growth is fueled by Anthropologie’s strong demand for giftable home products, Free People’s expansion in retail and activewear with FP Movement, and Nuuly’s rapid rise in the rental clothing market. Nuuly adds a fresh revenue stream by tapping into the growing popularity of subscription-based fashion.