Urban Outfitters Inc. reported record second-quarter net sales of $1.7 billion, an increase of 10.4% year over year, driven partly by a 28.6% net sales increase at its Nuuly rental business and 18.6% growth in wholesale, according to a Wednesday press release.
Nuuly’s Subscriber Growth Drives Revenue
Sales at Nuuly reached $179 million in the second quarter, driven by the addition of nearly 113,000 new average active subscribers, a 30.4% year-over-year increase. Nuuly President Dave Hayne revealed on a Wednesday call with analysts that the service had briefly surpassed 500,000 active subscribers in early June before adjusting to typical summer seasonality.
Urban Outfitters’ Overall Retail Sales Growth
Overall retail net sales grew 8%, with comparable retail sales up 6.2%. This was led by high single-digit digital channel growth and mid single-digit retail store sales growth. Retail comps at FP Group grew 10%, with Urban Outfitters up 8.4% and Anthropologie up 3%.
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Nuuly’s meteoric success in the clothing rental market helped parent company Urban Outfitters Inc. set a first-half record, with total company net sales increasing 10.9% to $3.14 billion. Nuuly rental subscription segment net sales were up 31.4% for the half.
However, products from Urban Outfitters, Anthropologie, and Free People comprised around 45% of Nuuly’s inventory in 2025, according to Wells Fargo analysts. Hayne noted, “We remain thrilled to have our URBN sister brands at the heart of our assortment while continuing to broaden the selection of brands around them.”
In the second quarter, Nuuly added brands like Collina Strada, Faithfull, and Edikted, along with capsule collaborations with Simon Miller, Tyler McGillivary, and Revolve’s private label brand. Nuuly’s Q2 brand choice count rose 35% to nearly 33,000, with Nike set to join later in the year.
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Yet, Hayne acknowledged that Nuuly’s large brand assortment can be overwhelming for some customers. To address this, the company has improved its personalization engine and added a custom fit guidance engine. Nuuly also plans to enhance its checkout and delivery experience and is expanding its East Coast operation to support roughly 1.2 million subscribers with a more efficient operation.
Meanwhile, rival service Rent the Runway had 155,692 active subscribers in its Q1 2026 results, planning to launch more than 30 new brands this year.
Urban Outfitters’ Outlook for the Third Quarter and Full Fiscal 2027
Urban Outfitters Inc. CFO Melanie Marein-Efron told analysts that total company sales were expected to grow in the high single-digit range in the third quarter and full fiscal 2027. Retail segment comp sales are expected to rise mid-single digits, with single-digit retail segment comps growth across FP Group, the Urban Outfitters brand, and at Anthropologie brand. Wholesale is expected to produce low teens growth. Nuuly is projected to deliver high 20s revenue growth driven by continued subscriber momentum.
