Urban Outfitters (URBN) 21 Nov 232024 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc.

Third Quarter Fiscal '24 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce Oona McCullough, Executive Director of Investor Relations. Ms. begin. may you McCullough,

the welcome forward-looking Earlier URBN statements. issued this the results following materially results release and October differ period XXXX XXXX. may Please XX, a Quarter note Conference outlining The for operating and Call. afternoon, may financial those and to afternoon, X-month Third ending include the discussions Fiscal press X- statements. Good from the actual company that

projected results information Exchange to from Additional factors differ filings company's cause that Commission. and contained results actual is with concerning could Securities the in materially the

Outfitters; you from Chief Marein-Efron, Dave Global President URBN; Officer, On will today's Hayne, Chief COO Officer Nuuly, and of Conforti, Executive URBN; Officer call, Executive Financial Chief and Melanie Technology Officer, Richard hear URBN. Urban and Frank of Harrington, Co-President Chief Free Sheila Hayne, and People

to be questions. we pleased that, address Following your will

Relations conference of For refer to more the and detailed Investor text at performance commentary our please call, quarterly website www.urbn.com. today's on our

turn now to the over will I Frank. call

Thank and more our you, and comments the discuss to quarter our begin by will notes operating you afternoon, commentary on my third thank good today. I joined results call then who for everyone detailed brand. and Oona, with

for which a Overall, driven growth robust added third as strong was August billion during segment with call. a quarter. Nuuly, quarter sales to growth largely URBN The retail in sales by growth our the the $XX the third revenue discussed comp in $X.X from quarter. line record delivered performed URBN expectations on the X% of million and X%

all XX%. mid-single-digit increase result Sales in double-digit online comps traffic Movement sales in sales Anthropologie, and with Retail increased of high comp AUR. People FP Movement both in channels growth segment comps comp with channel single-digit by a of brands the FP and comps and driven the higher Free The produced leading and stores were way the stores. in was DTC

achieved URBN's to record negative our brands million which XX% to year earnings income these the million brand. $X.XX or than even of offset brand at $XXX Total sales line strong revenue operating jumped more than bottom URBN more were diluted third prior than Each Outfitters higher quarter sort of comp and share. results Urban XXX% per growth. a the impressive $XX

driven all dollars, profit growth improved rate gross while profit by surged earnings initial brands. points. Our over basis markdown increase well gross was lower to due XXX in in was gross significantly at as XX% profit margins rates part improvement by The a in rate as

now with Nuuly. from I details more brand will provide by a on help Dave little Hayne

renting hear they from their to or a or our their advocates Thank seems everyone. I'm friends to update vocal family you, resonating to certainly provide about Nuuly Nuuly. a for Frank, and rental become by us, new from then monthly our often of on month that subscribers they target friends good rental afternoon, subscription subscription QX a of our from renting customer. We results, first brief happy X business model our and and all about on with Judging Nuuly. tell after go learned be

subscribers XX% was quarter, of to in growth trend. in nearly of mouth was in million a end. $XX.X revenue XX,XXX XXX,XXX up a and by has revenue, year. increase quarter, from an QX this net drove a quarter's the This total driven of Nuuly And strong In grow execution at proposition of active which was increase subscribers last an us third business. helped value of is with word paired viral the years quickly It first attractive of that continuation few this our

possible the our And November. profit we would quarter two, of One, we As about that we X in goal the business. of it we XXX,XXX relating by believed milestones reach see year, Nuuly that we year. spoke in call, of quarter could end to first was this second subscribers remember achieved you may we from the now the our thought have a back half

pleased operating share very that today. to pushing work Nuuly to team I'm achieve, the a This profit Today, is everyone's quarter. the recognized makes has me in an proud saw see been hard to very goal hard it third and

As excited forward, about future. we be is much in to there look Nuuly's

Free clothing Anthropologie, Outfitters market. rental partner With the other well strong the as the Urban over most believe we sister of is and brands, our have XXX assortment partnership as People, what on Movement we compelling brands FP curated

Xx and provides digital operating our in needed to the enhance urgently our our count. further features well our business new subscriber the customer operations, of value drive Missouri of Raymore higher opening exciting with rental capacity customer center Nuuly can well center fulfillment and in fulfillment With over that experience very the robust with positioned QX into program to the help platform, the both driving current supporting the future total grow is

to our the most this homegrown I'm as with realize excited with an realize the company infrastructure the continued platform that drive digital best empowers more importantly, business us future. with today to a be a growth rental young help incredible profit So program with to first very and us team reporting value and to assortment in

over Thank will I Frank. back turn the now call to you.

entire we Thank come. more to team you, there to on many milestones incredible confident Dave. you are Congratulations are milestone. all notable know this I and Nuuly the

strong increase profit traffic markdown by in to third improvements rates digital team third Both were regular store delivered on and comps. and growth led increased quarter store QX. positive driven Strong and The Anthropologie IMU digital sales moving price and low quarter record Anthropologie. comps strong segment by Retail exceptionally dollars in sales. an double-digit Anthropologie. driven XX% to for This in all Now comp operating was

largest a continues campaign to the date to favorably respond resulting fashion Anthropologie in increases the Anthro. customer falling of performance The including newness. impressive Leveraging Anthropologie brand launched and driven That a Within apparel and brand impressions, Tonkin, largely talent, sessions ambassadors accessories. In growth. was strong celebrity quarterly influencers. Phoebe by to marketing and its in range apparel, resounding quarter, new customer campaign was for success,

brand's drive incredible apparel in categories, accessory marketing, in nicely acquisition over XX% across The operations North helped and all and season. positive has with customers growth customer The new execution the a across start to in holiday new has resulted product America. strength to along

Retail to store a XX% brand People Turning and marketing, Movement sales produced Total and a finished comps People the comp FP People. channels. yet Free at comps again exceptional historically third once XX%. brand operations XX% by delivered record The and in another and to was by strong segment in the People produced in the execution. comp. driven quarter, Free Free an segment part were Free quarter. strong up robust comps double-digit due growth comp excellent quarter These achieving double-digit digital Retail in product traffic channels impressive driven both profits the

weakness decrease of Free accounts. the to store the store accounts, segment in department fourth season. X% has and of during quarter. the a The Free strength start growth strong campaigns third holiday in specialty the assortments, marketing People store quarter. by People in sales was partially a Wholesale result The segment sales experience decreased Resulting offset retail continued in in

level. remained wholesale negative, to a profitability healthy has returned slightly sales Although

and Now negative comp Retail QX. performance of their is America yet. comp UO's assortment comp moving some The store America, negative. was marketing to In North execution, move and to result just enough and brand digital recorded channel improvements on XX% experiencing in a the sales a Urban were in low but segment not disappointing Outfitters. North double-digit needle in Urban Europe. negative

In elevated Outfitters versus the was Due These levels to Europe, during markdowns to to Europe Inventory the like lead we the positive weaker-than-expected concentrated for than during levels well quarter fourth forecast where season the rest planned in them segment see at inventory the the for of be. comps. the holiday Retail while quarter, higher brand. third weakness as would Urban continued the as to are will originally the U.K., sales brand

Sheila call People, will People Harrington, speak turn the the now to and will Movement I brands. who Free Urban Outfitters to Free

good Movement Free afternoon, the you, everyone. pleased I'm for provide FP update and Urban brands. an Thank Outfitters People, and Frank, to

discuss will I People and Free FP First, Movement.

welcome with few of years We along achieve People into past us labels, reported, brand People select an brand intimately looks more Free growth As focus total the the up attributed had label product, believe can and and the offering. Free FP, and We to revenue core continue allow reach Distorting the with use marketing. quarter to complete can brand by experience XX%. the over consumers' lifestyle product People and the our total people exceptional and that be on Frank strong creativity its in team's into Priest the including Free growth consumer consistently maniacal the brand. will free, The to expanding

Free The the and the in retail robust of net denim, We The accounts enjoyed the for offers Free The through includes outside which is XX% The we but product and of growth this several brand's over We growth captured Free sales accessories significant and spirit categories, wash. quarter. believe staples opportunity touch segment footwear. currently exists label It hand experiencing growth. The heritage-inspired details We FP label

be a our the particularly of We label to this growth. plan and for denim category, meaningful continued part

several launched the marketing factor of platforms is a achieved during successful throughout marketing growth and double-digit targeting the growth. customers brand and campaigns The across in year, QX. in mentioned, As consumers quarter multiple social key FP's new

with Free North People's digital revenue in America concentrated business. stores a currently is and XXX strong

and has believe larger fashion be strong brand. aesthetic its we opportunity People handwriting, a global to However, unique Free the

years locations operate first ago, the XX we U.K. our in store European stores Today, Europe Netherlands, the in X over with Just opened and Amsterdam. in France we

and several over that business continue total could in was the QX. international XX% next strong We grew Our by growth profitable believe years.

redefine a voice unique by The the of this found the on offers and feminine infusing Movement women's male to successfully. and voice a business sensibilities. opportunities the dominated teams activewear function have FP female fashion and feminine long Moving to FP express Movement. and FP strong brand buying looks activewear by define into at design intersection market Movement to

and the of market. excellence and one-piece white studio, performance performance One space example strive team created is Righteous outdoors. for the develop capture pieces to run to the creation runsie, and and from continues marketing the product The team in a activewear

People After then, decided store expectations. of despite brand People is stores Movement our per profitability at square productivity that well Sales these performing a for opened the as we've greatly being Since experimenting shop-in-shops in still overall XX awareness. store are in several has have X stand-alone currently and locations brand stores Free first to the movement performance stand-alone similar building our U.S. brand Free additional foot exceeded as to levels Movement young we wall years, stores XXXX. the open in

Given XX the we the current fiscal at year least open in additional success FP of stores fleet, store plan to 'XX. Movement

team wholesale over XX% quarter. this delivered growth year-over-year The

brand growth, also are correct only runs not this and align with ensure partners workout connected connected and consumers platforms and marketing they're While in that our across achieving experiential and customers they through person such teams the various events strong selling events. we athletic values. with with also The who investors, organized our local markets in digital but with brand as aesthetics to

XX% Total FP These The channels, efforts X revenues to retail, continues of wholesale. led the success Movement by XX% the digital and Movement for new growth all quarter. FP the grew distribution brand over third across quarter. in build the in to customer

on in goal achieving revenue. still stages are annual $X in eyes are growth, the of We but our billion of early

QX for passion for your produce the to Movement FP both consumer. teams and and amazing People at Free in Thanks such results brand continued our and helping and the Meg

Turning improvement to back-to-school comps our the noted early Urban and Outfitters we last men's in during call, stores brand. women's in the On apparel some season.

apparel declined comps retail stores be fell in men's work consideration done. largest was within in target our for did trends more traffic for and our we short We our there the remain stores, we single in and comp have positive trend and segment total of consumer. quarter, improve the goals. improvement know to much know challenge, online While business Negative is our

improving identified products X brand to order have with and change are and emerging our teams They generated brands, the internally of the where of are. In the mix relevancy curating the meaningful connecting they Outfitters national our right trajectory Urban products customers and inspiring priorities. for of business, our

Let me priorities. these expand on each of

modernize consumer. of First, our has Urban Z national assortment from believe Gen offering pinch assortment more this and brand brand Outfitters has a to has of and to to brands competitors, off pandemic. been brands. relevant be and traffic Urban sales. on rely part This differentiating been our to We always a of since the need an emerging offering we drive important been We compelling its

current brand our brands, this external with our offerings popular Some unique belief. successes reinforce brands in business collaborations and within

merchant divisions is to brands reviewing mix new Each with brand most team all currently relevant working possible. and across build their portfolio the

items price Second, critical our value distort right apparel the the us for the development growth from and strong Recent we within the internal product evolution brand with support right see the our the the into when and own with proprietary ability architecture. price remains profitability. continued consumers business correct, we successes get provides response of consumer. long-term to to our products Strong

as such attribute an higher Silence able we Kimchi outside percentage into were distort women's and drove apparel. and sensibility and feminine This of Blue fall, a This productivity more labels showed feminine Noise. with to

follow it on and Third and Outfitters be consumers Urban we with our relevant and We inspiring known where we content they missed behind change to TikTok pandemic marketing. fashion has they or adopters stores. got opportunity to be to preferences. We our connect consumers in to the need is the and Historically, YouTube, the consumer. their where in know develop been in are, when platform meet our how to early prior

have improvement reactivated sequential see We the and digital begun total customers. progress to quarter throughout new, on with

we're consumer this the momentum, relationship rebuilding with While take will time. gaining

will on on lead X a profitability focus convinced for the long-term executing I'm our laser target to return priorities that and and to brand. growth consumer our our

our for their teams Outfitters. grateful and to Urban for I'm commitment dedication

business in Now sales segment while Total were sales driven brand Positive growth geography, turning By negative. your in retail Europe Urban attention Mainland to new have Retail the positive continue U.K. in the to our challenged. the and store Europe. were our in brand QX. remains delivered segments by comp in on more grow to region. channels, our believe were an both Europe connection strong, was our comp we across while with sales We consumers this in opportunity openings,

our drive boasts greater increasing name cinema of Tomorrow, is Via the which street store city. flagship commands the which Strategic Urban in the counts openings such Madrid will unparalleled highest should pedestrian key in store in as repurpose Outfitters opens visibility. one Gran traffic penetration. recognition, Urban The and first on brand's to this housed be a also digital

with global our I you teams around the both like world. in consumer, this service and on Urban to openings our to this to our for year. work European opening, first other along and Congratulations past the momentous market stores Outfitters their passion, would And teams digitally hard thank to say drive total

the will turn I now to call Melanie. over

good Sheila, Thank afternoon, and you, everyone.

I year Now the discuss fourth our fiscal will quarter performance. thoughts and financial 'XX on

total fourth to quarter. slowed could we October X the October. high similar in growth comp year. have first QX in Sales growth Retail of November the versus in versus of segment Based sales demand quarter double-digit quarter, the Consumer growth believe the off to started start segment sales slightly the Nuuly third months in sales from on result low last could be and single-digit company digits. growth sales mid-single

Our segments the our decline offset QX. is be to retail growth in Nuuly segment by and similar Wholesale sales likely to partially in

could which The freight as lower primarily rate driven profit inbound for will cross-functional basis in plan, Based quarter. the on the margins. margin believe product as gross product well could by approximately URBN's improve Now favorably gross profit points fourth initial margin. quarter margins on current and to sales XXX higher year we initiatives to by performance gross increase prior margin impact be fourth compared from

growth believe quarter high We digits. fourth in increase the SG&A expenses. the for SG&A to on could moving single Now

SG&A overall payroll company Our planned store in improved by higher expenses driven be growth incentive and primarily higher due could payroll from performance. to increased pay

addition, could In versus support expenses expect growth customers be year in sales. marketing to and we last higher

spending level down business variable up is that performing. on always, of our As a certain maintain performance how if fluctuates, SG&A can adjust we we depending sales and

We quarter. tax effective fourth rate XX.X% be are approximately the currently our to planning for

grow inventory levels quarter a We fourth moving rate to could that the in sales below growth. inventory. Now on believe at

our significant expect and City, year expenditures omni are approximately have planned next controlling progress year. fiscal year, to into The spend Capital Kansas facility distribution sales additional that Kansas. highly year for We to facilities. related trend in inventory $XXX is our million. we opened this made investments this primarily at continue fulfillment ratio the automated to in Earlier

facility in within City a investing new the Kansas In fulfillment rental region. in addition, Missouri we're

We in are year fiscal the beginning open targeting to 'XX. of this facility

stores XX fiscal opening be stores 'XX. XX and during closing we'll approximately Lastly, year new approximately

not does statements. foregoing views. any but the our The to a company update of simply obligation is reminder, current reflection constitute a As a forecast disclaims forward-looking

pleased the over I'm Now call Dick. turn to to

Thank you, afternoon, Mel, and everyone. good

The in of and heard set As People, and records new colleagues, brand quarter. from brands adding $XX X huge delivered first during in Anthropologie our the profit. their achieved Nuuly for QX. additional and million recording outstanding revenues milestone active all revenues Free Movement profits. also you've by X posted sales in my both The Nuuly results record subscribers quarterly FP a third quarter QX brands

concept. their since celebrated All as they this anniversary of launching only the fourth

fourth quarter consumer Moving a much on spending. market slowdown to has overview in chatter prospects. of been about There an our

October. pay did newness I customers and October as moderation is a Melanie for want purchase want. are our in to they willing the word fashion full demand November-to-date preferred and in in their experience brands results to As with reported, to slight beginning continue early line what business price slight. choose emphasize

some show segment planning Anthropologie still brands the double-digit comps remain negative. People at Urban and to QX and improvement, Retail but Free to the both We're remain brand positive

produce the for retail total calls segment plan comps QX X%. to company's of Our

has our past produced new in enjoy enter brands we these Together, which comps to XXXX, X drive customers nicely this to young that gain and FY segment attract several market drove year should revenue positive and prepare will growth year strong fiscal excellent comps, we larger brands, 'XX. believe continue we As share. and Retail

In bodes on well for while addition, the merchandise further line profitability. margins holding improve the we to This opportunity SG&A increases. possess

So we could remain produce that in encouraged profits. and FY sales growth 'XX solid

rests We are, ability bottom the acutely to to aware brand largest improve that Urban turn single our around. line opportunity our of the course, with

efforts. as and on and the end, building the highly focused discussed, our that we To offering are improving team, product marketing Sheila strengthening

our significant critical made in for is have search We forward. our in progress President, moving step brand a which

we promise witnessing benefits. in learning to beginning like have demand watershed the Current technology Looking retail shorter deliver much more another future, XXXXs further science believe e-commerce advances machine many hold Commerce planning I better lead in impact potential inventory intelligence are the other the product the beginning the business transform Mobile of the again. early accurate following into marketing forecast, and decade. had the period retail, in among of more Data times, optimized the allocations, to once artificial and much and personalized had

efficiency, improve wide should waste of functions. a and across technologies reduce range provide savings These cost

I creative for superb enhance and and especially capabilities. to our teams already brand generative the augment by Our AI are excited potential

expect to amazing We give new benefits of our update the of progress you these an appraisal realizing annual and tools. in

service operating our thank thank recognize dedication their their remarkable closing, creativity. associates and I thank and also the brand our produced our globe. humbled by teams quarter, XX,XXX another In creative Their I and many them. outstanding partners merchant, leaders worldwide. around efforts I and I'm constantly and and and shared

support. for their prepared for That concludes shareholders our over our the continued remarks. call questions. thank turn I I now your And finally, And

Bank of from Hutchinson [Operator first comes the America. question Instructions] with line Our of Lorraine

headwind a brand of fourth receipts Urban planning first that separately, margin? your half the are you next And gross how Outfitters of year? quarter pose does then to for weakness the much How for

baked our can The your is forecast. I first into the of half UO question. take headwind

points call impairment of of $X.X QX. I It plan adjusted year. point basis the So it to to is in want million off is I our was last sort of quarter. fourth being that what achieve quarter does out include of in profit an plan, improvement just contemplated not that gross able margin over the XXX in fourth would of in that also the

that. impairment, margin come relates think of in If as inventory, And adjust normally you just that gross Sheila profit I XXX include out. our could were then can points likely basis But it over to take that improvement improvement. we to

I Lorraine. that. can take Hi,

half like As and compelling make that will we in sure one we a too we improve aggressive as assortment inventory sales want we the business way amounts of believe don't feel inventory the accordingly to we We we manage to to or start other. basically can sure that to into. we first move small make the our give that We quarter-over-quarter, walk be year, outpace see that stores level. the throughout the want

going so versus an definitely like feel it's reaction. indiscernible an we And to [ be immediate ]

line from comes of Our Matthew next Boss the with question JPMorgan.

opportunity reaction you in On to on by Maybe banners. that holiday. speak Melanie, could And deck, recent and remaining FY the just into category move holiday front? the gross any across margin 'XX could you And November you fourth elaborate then seen marketing into we on in assortments just you're the trends color in to cited as positive that margin anticipating you've just key gross quarter? drivers any

that, so in similar be October. very results Matt. do I'd pleased Sure. QX Retail to far in segment our comp to performance are

the that has to Free were results. results seeing QX comps discussed, which to some negative. it's Melanie want rather been in in comp now brand is biggest again, that slightly Urban I The but mid-XXs is America emphasize achieved And total slightly. People, the the posting teens they stratoferic date, North the word October As high below than difference QX. Meanwhile, in improvement still

all wrap QX total we together, segment URBN in at you retail should comps believe X%. that come approximately If

of seeing I to entire IMU chain basis the brands really improvements. think inbound fourth that enterprise. that's normalization starting our all in of the initiatives of improvement as over several going largely supply we're the of is the cross-functional quarter really margin, across benefit all we're just And costs as And be the realize by as points well to gross then, relates the Matt, it to as profit across XXX driven

banners. that improved As fiscal we margin think driven of continuing We more there and the obviously with. cross-functional part for of led benefits on coming IMU inbound 'XX, the will but the reaping think importantly, is costs incremental I the initiatives forward we look also all we've still expansion. down, do of continued by across be be the would transportation Again, gross into benefits that profit room that

And Kansas full then And then secondarily, expense now but of delivery We'll logistics, -- can do its think to we as see begins distribution in potentially a in those to improvement that as starts moderate the I see and running. see continued throughout start that is reach by markdown brand. in the following some benefits lastly, benefits to Urban sort start new to the not to benefits and we perspective, being hopefully on those up we'll think Outfitters that well. that year the year of build And to then improvement rate driven from in largely facility allocation. bit we and just little have start we a of built think

I there's all brands. So opportunity across think X

new think the Outfitters And in due in nice There's leading 'XX. a markdown logistics of could start expense the opportunity opportunity facility some to to brand. all healthy and keep at amount I Kansas, delivery Urban to you fiscal opportunity that

Lejuez Paul from the Our with of next Citi. line comes question

locations and store more think correctly? you the store the terms is about I'm how locations Dick, fashion the just number the are? of Urban say, in size, turnaround fashion Do interpreting thinking performance Or number not Outfitters there. stores. where context in something the there you of curious number potential of this turn structural trends or about competitive set, you're just and how view is

cost separately, that tools. fingertips. a future big guys? then the about in already talked at tied coming for learning that there is your to Or efficiency you And something and you machine have up Is that you is

what looks curious that Just like.

the and steady with Certainly, something It invest will progress. machine And start Paul. at make that will first, have we over time. in we learning second I'll is AI part our we fingertips. don't

into it's We I feedback. started e-commerce initiatives We that As said, got throttle other some of happened didn't some XXXX. We much that early like very it. from in the 'XXs. jump the full like

We the work bit a And be little find the fairly ahead in this of to beginning near as well. I expect more. and out we then, what endeavor of invested what think didn't the curve curve somewhere we're worked,

fairly turning President think As that. that the around, is key you to dissipation about plan think that about brand The hiring Urban Urban to a gave comprehensive to didn't it want relates emphasize do is one I component. a how a we Outfitters I Sheila thing for we that do talk that

I towards significant -- we've months. And in might you that something progress made And end. the hear think in next few

that be marketing. improve to will we our improve, our to have we and one importantly, And then So have thing. most offering, product

quite well. we the feminine I feminine that look a performing what product And I think think look. the will increase femininity our offering that you've to a more is in penetration seen assortment. is shift of in And fashion

or not highly like we've feminine, known -- had something not not is People for. the that It's always while This are more particularly Anthropologie is Urban which much Outfitters this feminine. brands, is and Free

swinging little against a but in excuse. side, we're sense, there out as don't I that want to think I so put that the an And

the always products is our want. that have job customers Our to

I marketing, areas of and platforms. like appear enough one and and think miss is in where I main the residing in TikTok as move terms that, of we customer our didn't as a quickly Sheila that the didn't was YouTube customer the along with adopt we and think was is, that said,

that exposure and Instagram large awful on an have remain did on We platform.

I and sessions. customers continue improve our toward move So have digital as the better along we is, our march a think marketing we greater and and will penetration show customer up where of

So I think that does it.

question. as So for next the

Straton comes Morgan Stanley. next the Our question of with Alex from line

much place, time the Perfect. to in line are sits inflection the where the Urban of a on profitability and I'm having about think color Urban in lot And a that thinking is for do then secondly, the the how and trouble focus With well. I just here on watching business. the for banner Outfitters it versus as on you're meantime? how total key those Thanks it the wanted initiatives. the on about for you drag what business. metrics from history

piece, just if would could on perhaps that of takes helpful. So puts it and too, you outline kind the be super

Okay. I'm question. that first to of part Alex, going the take

when long about to measuring Urban thinking how brand think the we're and take about we're Outfitters will how I that. think it how we turn

very I XX-year-old quarter-over-quarter our want because think to to do and we're improvement staying for Urban focused on month-over-month a we've in we the consumer, Outfitters and look highly way XX- it lost consumer. healthy

will focus that consumer on And with back. the we feel customer gain laser like

focused We consumer. the our the offering. marketing We in reacting hard as to product and We're watching consumer are We're there looking in well listening lost that reget it's engagement through as of to that. on platforms. what new they're to terms consumer efforts, social whether back We've the our way. different for need hyper

So I most. also think where much not we but resinates top velocity trying sales sales it to and a from a perspective do the line we as look only merchant, or at from a to listen what harder

for, healthy improvement we're what is looking for return growth. for a long-term quarter-over-quarter Outfitters So Urban

this is talking. Dick Alex, And

I basis the we always are want metrics, you can of that Sheila that and think question? will the those to watching that see the you asked improvr, I those if last part follow. we right the track carefully sales take know store do know will on we And extremely Frank, and think is about X on of sessions and traffic. a number daily metrics. watching I

where yield historically meaningfully run fallen profitability from at. the they've has Obviously, pretty

to around opportunity healthy we've thing And that business from strength is to able of 'XX to gains. then the in for I and operating X fiscal them businesses, with for and begin to think our compensate the more really, and where been than drive really contribute that they nice for profit beyond to for begin then incremental recapture their growth leaves turn does the Urban were. other

question comes with Advisory next Telsey Our the line Telsey Group. of from Dana

earlier, gross this markdown gross the IMU to about see Free there profitability the structure about of the and smaller this there do lower Or now with on and you In going As margin strength thinking think is, you discussion the those IMU framing forward? Nuuly higher and think just of People from the operating Movement what businesses opportunity continue early for some incremental like and of or or the improvement that potentially any reaching just XXXX margins markdowns, to the changes of cadence? opportunity environment? is in you them businesses. And is lastly,

Dana, think talk take that People it I'll the about Free pass they who be who collectively the you both will talk smaller glad because the here you'd URBN extremely to of question excited first smaller I'm about for then Dave, Nuuly. to part loan. Movement about we at that Sheila, we Okay, won't question what are and asked will because and called along businesses

I We than think FY you brands. billion because 'XX in have $X People much our But quicker I $X both tell of happen Nuuly And plus going billion. can't be going think Movement an know is won't. other and to it any opportunity brands it Free that's to to I reached happen

Movement? talk to about And would you so Sheila, like

FP been about indicate to all has IMU. scale, reading us Movement. excited possibly encouraging do Dick along. Sure. that as there Yes, which can, in speed as I'll scale invest comes just comes The And should speed that we're metrics that start. much we we with with this we're

digital we a to new grow So count robust continue attracting at stores attached nearly I FP with least to think customers. XX marketing strategy doubling Movement next and brand as year store our with new the do and

have Dana. there the buys So advantage that long to in work of to frankly. IMU there's scale able strategies only from been [ lot take a is upside depth of And that terms ] in our of of be

Okay. to you Dave, Nuuly? take do want

thanks having interesting a We with learnings to been question. see business grow. the of interesting Nuuly and a continue been lot fun a business. the It's Yes, Nuuly it. of there's We've to building the of been really to new from opportunity lot sure. lot a for Dana, learn business,

is of think learnings interesting we're really we've new that a most I growing that one market. the seen

market XX% that impression anybody see we have ourselves business. and kind a to join is that We Nuuly, we're never that indicator we have roughly a from new we all new And our new before. new is us of survey stealing We The see share when necessarily feel concept learn. don't rented of when see the always rental gives subscribers in people that them growing Nuuly like subscribers. of

feels this gives for of upon more a as of like really the customers idea into come us future we're and it and lot model, So excitement a the where people which can bringing new new just consumption go more renting.

So should our I continue and and shipping opening thing. us down warehouse of next fair think amount then Raymore that's really across variable Nuuly, costs. that's a really And to scale supporting the our infrastructure to going allow delivery exciting a Missouri to I costs also think our we on drive be as

to of So us continue going just leverage to to allow are those we grow. as continue things types to

fun Nuuly. So times at

fourth the What's and Frank. to this Then start get goal towards when can knock think driving done we X first about obviously, wood believe to this have yet continue to getting our XX% going on. nice the levers across X IMU talk to profit. made we've pull the the we is you of I think improved and all in that us do some can quarter think exciting think, really in make And there, I is Dana, IMU progress brands. in that we're year, about that structurally improvement. operating really quarters about is goal that rounding you We nothing fiscal that 'XX. There out we progress

double-digit and fiscal to and third of milestone and into businesses other our producing rate, about You now of quarter our a FP able growth meaningfully to forward. 'XX operating Talk and going contribute is operating the upon movement, some profit profit reaching that talk about growth Nuuly, outpaced just their XX% build growth. hitting right? they're operating which in being to to continue going versus profit have So

we've talked But operating we and just growth to as that profit progress year the running operating year profit XX% contributing As and us have. hit across a they there's really Outfitters, lot longer-term goal not our historically on that Urban a this the made well. of where around begins as table opportunity next about, currently build turn for to business basis. into upon continue to that there run

Associates. Our Research of from question Janet JJK comes line Kloppenburg with next the

that great store look to Free an its you that Do People you forward. success as openings brand, think Sheila. when [indiscernible] for people should expansion for a accelerate that's of and about Free on should we that while And we think continue. think we the acceleration quarter. unit COngratulations Dick, anticipate store Movement openings opportunity an

know sales slight, And I'm -- Dick, not I then and on you just the slowdown, hysterical. recent could it's

of if to many or warmer in to you're understand attributable wanted was any that sort of weather seeing. it just I category markets sort or So geographical dispersion

People stores. Okay, Janet. to I'm about going really planning a Sheila? I and open excited about is Sheila because Free to new of first talk ask Movement know to lot she's

Yes.

pipeline So for to ready Janet, we go strong year. a have currently next

XX, XX. are we saying at least So

my of that's most Free the think I amount People experienced. of at the growth we've stores, least brand family in that

that markets. say would continuing I knock for growth frankly, years explore So wood, to as we see several that on we come, new

We're the of isn't in FP of markets cost in this Movement People with And growth not actually at of a Free Free the well. is couple that People. as

have a to with lot the I of and itself. spoke still As we digitally growth Free internationally People do brand about,

independently. growing brands both see we So

billion FP goal. accelerated level at $X our towards an Obviously, movement

quarter years retail that FP of QX a of As in far segment ended ago X sequential XXth growth. the if quarter 'XX. exclude the positive couple as fiscal Free People, slowdown we of XX

comparisons. So we're just up against more challenging positive

our in the strong the pulse the teams of design marketing buying And that extremely frankly, and the fashion teams, I right are feel all trends. teams

remain into extremely optimistic fourth going quarter. we positive so the and And

time I we to pause very want momentum is going on, to date, always think of but we're our is to believe and interrupted. be strong to year reason this results have no seeing

that When Honestly, that's real it's stores. I fact some a the to their growth. just the that you is confident days excited very want that us in to early sales the really awareness and think leaves with the still brand on FP Free an productivity par add about success People growing Movement in strength in in those and on young fact that about such and and very brand profit stats. store have quick really impressive doors

and about because awareness how talks stores that build couple first we've of Sheila least, the years well than performed, the not where -- XX over the at those to why we're people much just really X that's been brand if collection especially but obviously, And more, stands. continued less have starting upon, given impressed

in repayment around harder weather, we what out a or you like I and what we Janet, tell And discussed a talk threw can -- like reasons slowdown like the all and loan potential we good have you, like slight October. there -- sit And about student comparisons. the slight as and deal some again,

just of we of them. necessarily we've kind that don't think think any I And said are there

the heavier harder Of the real. -- course, are comparisons

money factor. loans, And from purchasing. be that's to could could positive. possibly got that be It so a Student how steal only away

that to just we feel be is can't up that slowdown that slight could can Quite one So attribute it. a we we with factor. frankly, this compelling come so

R engaged it of that buying beginning brand. of my can unusual the those in we we're the of isn't, recession. sense given customer and business consumer word. that price will buying convinced very the the with see the if are our she's I you experience were behavior back. of that the there's She's And the She's what tell fashion. dreaded very the What beginning is is in any We pulling it don't full very think

treat So about I don't think that. that should we

The our healthy, business is excellent season. going is we to I very an that have and we're healthy. think holiday customer believe

from Shapiro retail last Our question come will line with tracker? of Marni the the

acquisition so is is question business expensive parts that difficult. And new starting turning on most a of and And Nuuly. very one to the don't forget happy a have to Friday everybody. I for profitability the I Black cost. customer you of Congratulations on Dave,

tap dig Anthro Have And like? to they into So industry? off in a the are what I'm we people to that into customers guess, really, Nuuly down little low able or that into Are a relative bring draft curious high if or to looks come bit. they just free of can you all? just little at I

Yes. Sure, the the Thanks for for and Marni. words. kind all question, thanks

started originally when Our we thought customer to than be a business. the few less last we acquisition originally were they have going the been costs over been actually what years, lot have

So that. very we've about been happy

team I has been creative go marketing. about about how think very our they

to something been word business, programs the They've in of in some a been do has mouth, acquisition putting big customer creatively a we that's been which a ambassador very and influencer for platforms. programs we've allow incentivize are with costs look things huge referral happy across mouth And of for driver things that lot like been across leveraging that like. platforms, of place social people driver part has say those what would that our us. We like so I spend spending been programs,

other the to I what been do We -- doing. to off we've all of the lot were you a continue off marketing think we've much on been is standpoint. don't we the from like -- draft work brands opportunity we an draft good a a huge platform. say standpoint, other that's would from suggesting at product brands off really draft What a and benefit very I there's the

love to customers of We would some love have working sister rent with the that to produce amazing luxury and that product do brands rent.

is a think brings on and it's something acquisition that new ] indiscernible that our huge [ attractive is that People just source fact Anthropologie customer that for also an I is benefit thing customers. we in platform, that So have Free a is big The us. that product

I reasons far. so all of So for has combined of been think that success one the big the

Okay.

all most over you -- thank if I out all I in call. all Thanksgiving. eat day, eat. you of today's much the because Slightly up joyous Black wraps next we Friday's joining. that wish think the over for have be very stores I Don't to

Okay. Thank very much. you

gentlemen, call. participation. your you this and conference Ladies for concludes Thank today's

You may now disconnect.