URBAN OUTFITTERS INC

Previous wording

We operate under three reportable segments – Retail, Nuuly and Wholesale. Our Retail segment includes our Anthropologie, Free People, FP Movement and Urban Outfitters brands. Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers and franchisee-owned stores. Our Nuuly segment includes the Nuuly brand, which offers customers a more sustainable way to explore fashion through a monthly women’s apparel subscription rental service. Our Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Wholesale segment includes our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment.

Current wording

We operate under three reportable segments – Retail, Nuuly and Wholesale. Our Retail segment includes our Anthropologie, Free People, FP Movement and Urban Outfitters brands. Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers and franchisee-owned stores. Our Nuuly segment includes the Nuuly brand, which offers customers a more sustainable way to explore fashion primarily through a monthly women’s apparel subscription rental service. Our Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Wholesale segment includes our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment.

Previous wording

The Anthropologie brand tailors its merchandise to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party branded product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. Anthropologie stores are located in specialty centers, upscale street locations and enclosed malls. Anthropologie operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers catalogs in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East. Anthropologie's North American Retail segment net sales accounted for approximately 41.3% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 40.6% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.6% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 1.5% for the comparable period in fiscal 2024.

Current wording

The Anthropologie brand tailors its merchandise to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party branded product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. Anthropologie stores are located in specialty centers, upscale street locations and enclosed malls. Anthropologie operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers catalogs in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East. Anthropologie's North American Retail segment net sales accounted for approximately 41.4% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 40.9% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.6% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 1.5% for the comparable period in fiscal 2024.

Previous wording

The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People stores are located in enclosed malls, upscale street locations and specialty centers. Free People operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all of the Free People and FP Movement wholesale offerings. Free People also offers catalogs that market select merchandise, most of which is also available in our Free People stores. Free People's North American Retail segment net sales accounted for approximately 21.1% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 20.0% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.1% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 1.0% for the comparable period in fiscal 2024.

Current wording

The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People stores are located in enclosed malls, upscale street locations and specialty centers. Free People operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all of the Free People and FP Movement brands’ wholesale offerings. Free People also offers catalogs that market select merchandise, most of which is also available in our Free People stores. Free People's North American Retail segment net sales accounted for approximately 20.8% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 20.0% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.1% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 1.0% for the comparable period in fiscal 2024.

Previous wording

Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, social media and third-party digital platforms, websites and mobile applications and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. Urban Outfitters’ North American Retail segment net sales accounted for approximately 14.9% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 18.6% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 7.8% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 8.4% for the comparable period in fiscal 2024.

Current wording

Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, social media and third-party digital platforms, websites and mobile applications and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. Urban Outfitters’ North American Retail segment net sales accounted for approximately 14.4% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 18.0% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 7.9% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 8.2% for the comparable period in fiscal 2024.

Previous wording

Net sales from the Retail segment accounted for approximately 88.5% of consolidated net sales for the six months ended July 31, 2024, compared to 90.7% for the comparable period in fiscal 2024.

Current wording

Net sales from the Retail segment accounted for approximately 87.9% of consolidated net sales for the nine months ended October 31, 2024, compared to 90.3% for the comparable period in fiscal 2024.

Previous wording

Store data for the six months ended July 31, 2024 was as follows:

Current wording

Store data for the nine months ended October 31, 2024 was as follows:

Previous wording

Our Nuuly segment includes the Nuuly brand, which is a monthly women’s apparel subscription rental service. For a monthly fee, Nuuly subscribers can rent product from a wide selection of the Company’s own brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase rental product. Our Nuuly segment net sales accounted for approximately 6.6% of consolidated net sales for the six months ended July 31, 2024, compared to approximately 4.5% for the comparable period in fiscal 2024.

Current wording

Our Nuuly segment includes the Nuuly brand, which is primarily a monthly women’s apparel subscription rental service. For a monthly fee, Nuuly subscribers can rent product from a wide selection of the Company’s own brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase rental product. Our Nuuly segment net sales accounted for approximately 6.8% of consolidated net sales for the nine months ended October 31, 2024, compared to approximately 4.7% for the comparable period in fiscal 2024.

Previous wording

Our Wholesale segment includes the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People and FP Movement brands and the BDG and “iets frans” apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately 4.9% of consolidated net sales for the six months ended July 31, 2024, compared to 4.8% for the comparable period in fiscal 2024.

Current wording

Our Wholesale segment includes the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People and FP Movement brands and the BDG and “iets frans” apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately 5.3% of consolidated net sales for the nine months ended October 31, 2024, compared to 5.0% for the comparable period in fiscal 2024.

Previous wording

Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended January 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on April 1, 2024. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates. There have been no significant changes to our critical accounting policies during the six months ended July 31, 2024.

Current wording

Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended January 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on April 1, 2024. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates. There have been no significant changes to our critical accounting policies during the nine months ended October 31, 2024.

Previous wording

Net sales for the second quarter of fiscal 2025 were $1.35 billion, compared to $1.27 billion in the second quarter of fiscal 2024. The $79.8 million increase was attributable to a $36.4 million, or 3.1%, increase in Retail segment net sales, a $34.9 million, or 62.6%, increase in Nuuly segment net sales and an $8.5 million, or 15.1%, increase in Wholesale segment net sales.

Current wording

Net sales for the third quarter of fiscal 2025 were $1.36 billion, compared to $1.28 billion in the third quarter of fiscal 2024. The $80.7 million increase was attributable to a $36.8 million, or 3.2%, increase in Retail segment net sales, a $31.7 million, or 48.4%, increase in Nuuly segment net sales and a $12.2 million, or 17.4%, increase in Wholesale segment net sales.

Previous wording

The increase in our Retail segment net sales during the second quarter of fiscal 2025 was due to an increase of $23.1 million, or 2.0%, in Retail segment comparable net sales, and an increase of $13.3 million in non-comparable net sales. Retail segment comparable net sales increased 7.1% at Free People and 6.7% at Anthropologie and decreased 9.3% at Urban Outfitters. Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by low single-digit positive growth in both digital channel net sales and retail store net sales. The digital channel comparable net sales increase was driven by an increase in sessions, while average order value, conversion rate and units per transaction decreased. Comparable store net sales increased as a result of higher store traffic and transactions, while average unit retail and units per transaction decreased. The increase in non-comparable net sales during the second quarter of fiscal 2025 was primarily due to the impact of the 16 net new Company-owned stores and restaurants opened since the prior comparable period.

Current wording

The increase in our Retail segment net sales during the third quarter of fiscal 2025 was due to an increase of $19.4 million in non-comparable net sales and an increase of $17.4 million, or 1.5%, in Retail segment comparable net sales. Retail segment comparable net sales increased 5.8% at Anthropologie and 5.3% at Free People and decreased 8.9% at Urban Outfitters. Retail segment comparable net sales increased in both North America and Europe. The overall increase in Retail segment comparable net sales was driven by low single-digit positive growth in both digital channel net sales and retail store net sales. The digital channel comparable net sales increase was driven by increases in sessions and units per transaction, while average order value decreased. Comparable store net sales increased as a result of higher store traffic and transactions, while conversion rate and units per transaction decreased. The increase in non-comparable net sales during the third quarter of fiscal 2025 was primarily due to the impact of the 23 net new Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.

Previous wording

The increase in Nuuly segment net sales was primarily driven by a 55.0% increase in the average number of active subscribers in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024. The increase in Wholesale segment net sales in the second quarter of fiscal 2025 was driven by a $9.1 million, or 17.5%, increase in Free People wholesale net sales due to an increase in net sales to department stores and specialty customers, partially offset by a $0.6 million decrease in Urban Outfitters wholesale net sales.

Current wording

The increase in Nuuly segment net sales was primarily driven by a 51.2% increase in the average number of active subscribers in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. The increase in Wholesale segment net sales in the third quarter of fiscal 2025 was driven by a $13.1 million, or 20.3%, increase in Free People wholesale net sales due to an increase in net sales to specialty customers and department stores, partially offset by a $0.9 million decrease in Urban Outfitters wholesale net sales.

Previous wording

Gross profit percentage for the second quarter of fiscal 2025 increased to 36.5% of net sales from 35.8% of net sales in the second quarter of fiscal 2024. Gross profit increased to $493.3 million in the second quarter of fiscal 2025 from $455.6 million in the second quarter of fiscal 2024. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives, partially offset by higher Retail segment merchandise markdowns, primarily at the Urban Outfitters brand. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

Current wording

Gross profit percentage for the third quarter of fiscal 2025 increased to 36.5% of net sales from 35.5% of net sales in the third quarter of fiscal 2024. Gross profit increased to $497.3 million in the third quarter of fiscal 2025 from $454.4 million in the third quarter of fiscal 2024. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives. Retail segment merchandise markdowns also improved, driven by lower merchandise markdowns at Urban Outfitters, which were partially offset by an increase at Free People. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

Previous wording

Total inventory at July 31, 2024, as compared to July 31, 2023, increased by $18.2 million, or 3.1%, to $604.7 million. Total Retail segment inventory increased by 3.1%, while Retail segment comparable inventory decreased by 1.3%. Wholesale segment inventory increased by 3.5%.

Current wording

Total inventory at October 31, 2024, as compared to October 31, 2023, increased by $72.3 million, or 10.0%, to $793.3 million. Total Retail segment inventory increased by 8.1% due to a Retail segment comparable inventory increase of 3.7% and planned early receipts of holiday merchandise. Wholesale segment inventory increased by 41.6% due to the timing of receipts and to support increased net sales.

Previous wording

Selling, general and administrative expenses increased by $24.7 million, or 7.6%, in the second quarter of fiscal 2025, compared to the second quarter of fiscal 2024. Selling, general and administrative expenses as a percentage of net sales increased in the second quarter of fiscal 2025 to 25.8% of net sales, compared to 25.4% of net sales for the second quarter of fiscal 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to the inability of the Urban Outfitters brand to reduce expenses at the same rate as net sales. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer traffic growth and increased net sales in the Retail and Nuuly segments, and increased store payroll expenses to support the Retail segment stores comparable net sales growth.

Current wording

Selling, general and administrative expenses increased by $23.2 million, or 6.7%, in the third quarter of fiscal 2025, compared to the third quarter of fiscal 2024. Selling, general and administrative expenses as a percentage of net sales increased in the third quarter of fiscal 2025 to 27.1% of net sales, compared to 27.0% of net sales for the third quarter of fiscal 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to increased marketing expenses to support growth in our customer base and increased net sales in the Retail and Nuuly segments. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support growth in our customer base and increased net sales in the Retail and Nuuly segments, as well as increased store payroll expenses to support the Retail segment stores comparable net sales growth.

Previous wording

Income from operations was 10.7% of net sales, or $145.1 million, for the second quarter of fiscal 2025 compared to 10.4% of net sales, or $132.1 million, for the second quarter of fiscal 2024. The increase in operating income dollars was primarily driven by the increase in gross profit dollars. The increase in operating income rate was primarily driven by the improved gross profit rate.

Current wording

Income from operations was 9.4% of net sales, or $128.7 million, for the third quarter of fiscal 2025 compared to 8.5% of net sales, or $109.0 million, for the third quarter of fiscal 2024. The increase in operating income dollars was primarily driven by the increase in gross profit dollars. The increase in operating income rate was primarily driven by the improved gross profit rate.

Previous wording

Our effective tax rate for the second quarter of fiscal 2025 was 23.0% compared to 23.2% in the second quarter of fiscal 2024. The decrease in the effective tax rate for the three months ended July 31, 2024 was primarily due to the favorable impact of equity vestings in the current year quarter.

Current wording

Our effective tax rate for the third quarter of fiscal 2025 was 24.2% compared to 24.3% in the third quarter of fiscal 2024. The decrease in the effective tax rate for the three months ended October 31, 2024 was primarily due to the favorable impact of equity awards that vested in the current year quarter.

Previous wording

Net sales for the six months ended July 31, 2024 were $2.55 billion, compared to $2.39 billion in the comparable period of fiscal 2024. The $166.8 million increase was attributable to a $94.9 million, or 4.4%, increase in Retail segment net sales, a $61.4 million, or 57.2%, increase in Nuuly segment net sales and a $10.5 million, or 9.2%, increase in Wholesale segment net sales.

Current wording

Net sales for the nine months ended October 31, 2024 were $3.91 billion, compared to $3.67 billion in the comparable period of fiscal 2024. The $247.5 million increase was attributable to a $131.7 million, or 4.0%, increase in Retail segment net sales, a $93.1 million, or 53.9%, increase in Nuuly segment net sales and a $22.7 million, or 12.3%, increase in Wholesale segment net sales.

Previous wording

The increase in our Retail segment net sales during the first six months of fiscal 2025 was due to an increase of $67.4 million, or 3.2%, in Retail segment comparable net sales, and an increase of $27.5 million in non-comparable net sales. Retail segment comparable net sales increased 11.5% at Free People and 8.4% at Anthropologie and decreased 11.4% at Urban Outfitters. Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by mid single-digit positive growth in digital channel net sales and low single-digit positive growth in retail store net sales. The digital channel comparable net sales increase was driven by increases in sessions, while average order value, conversion rate and units per transaction decreased. Comparable store net sales increased as a result of higher store traffic, transactions and conversion rate, which were partially offset by decreases in average unit retail and units per transaction. The increase in non-comparable net sales during the first half of fiscal 2025 was primarily due to the impact of the 16 net new Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.

Current wording

The increase in our Retail segment net sales during the first nine months of fiscal 2025 was due to an increase of $83.9 million, or 2.6%, in Retail segment comparable net sales, and an increase of $47.8 million in non-comparable net sales. Retail segment comparable net sales increased 9.3% at Free People and 7.5% at Anthropologie and decreased 10.6% at Urban Outfitters. Retail segment comparable net sales increased in both North America and Europe. The overall increase in Retail segment comparable net sales was driven by mid single-digit positive growth in digital channel net sales and low single-digit positive growth in retail store net sales. The digital channel comparable net sales increase was driven by increases in sessions, while average order value and conversion rate decreased. Comparable store net sales increased as a result of higher store traffic and transactions, which were partially offset by a decrease in units per transaction. The increase in non-comparable net sales during the first nine months of fiscal 2025 was primarily due to the impact of the 31 net new Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.

Previous wording

The increase in Nuuly segment net sales was primarily driven by a 50.0% increase in the average number of active subscribers in the first six months of fiscal 2025 as compared to the comparable period of fiscal 2024. The increase in Wholesale segment net sales in the first six months of fiscal 2025 was driven by a $12.4 million, or 11.9%, increase in Free People wholesale net sales due to an increase in net sales to department stores and specialty customers, partially offset by a $1.9 million decrease in Urban Outfitters wholesale net sales.

Current wording

The increase in Nuuly segment net sales was primarily driven by a 50.4% increase in the average number of active subscribers in the first nine months of fiscal 2025 as compared to the comparable period of fiscal 2024. The increase in Wholesale segment net sales in the first nine months of fiscal 2025 was driven by a $25.4 million, or 15.1%, increase in Free People wholesale net sales due to an increase in net sales to specialty customers and department stores, partially offset by a $2.7 million decrease in Urban Outfitters wholesale net sales.

Previous wording

Gross profit percentage for the first six months of fiscal 2025 increased to 35.3% of net sales from 34.7% of net sales in the comparable period of fiscal 2024. Gross profit increased to $901.7 million in the first six months of fiscal 2025 from $826.8 million in the comparable period of fiscal 2024. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives, partially offset by higher Retail segment merchandise markdowns, primarily at the Urban Outfitters brand, and a deleverage in logistics expenses. The deleverage in logistics expenses was primarily driven by the increased penetration of Nuuly segment net sales to total Company net sales, as well as transition and start-up expenses related to the additional Nuuly fulfillment facility that opened during the three months ended April 30, 2024. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

Current wording

Gross profit percentage for the first nine months of fiscal 2025 increased to 35.7% of net sales from 34.9% of net sales in the comparable period of fiscal 2024. Gross profit increased to $1.40 billion in the first nine months of fiscal 2025 from $1.28 billion in the comparable period of fiscal 2024. The increase in gross profit rate was primarily due to higher initial merchandise markups for all segments primarily driven by Company cross-functional initiatives. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate.

Previous wording

Selling, general and administrative expenses increased by $58.6 million, or 9.4%, in the first six months of fiscal 2025, compared to the comparable period of fiscal 2024. Selling, general and administrative expenses as a percentage of net sales increased in the first six months of fiscal 2025 to 26.7% of net sales, compared to 26.2% of net sales for the comparable period of fiscal 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to the inability of the Urban Outfitters brand to reduce expenses at the same rate as net sales. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support customer traffic growth and increased net sales in the Retail and Nuuly segments, and increased store payroll expenses to support the Retail segment stores comparable net sales growth.

Current wording

Selling, general and administrative expenses increased by $81.8 million, or 8.4%, in the first nine months of fiscal 2025, compared to the comparable period of fiscal 2024. Selling, general and administrative expenses as a percentage of net sales increased in the first nine months of fiscal 2025 to 26.8% of net sales, compared to 26.4% of net sales for the comparable period of fiscal 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to increased marketing expenses to support growth in our customer base and increased sales in the Retail and Nuuly segments. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support growth in our customer base and increased net sales in the Retail and Nuuly segments, as well as increased store payroll expenses to support the Retail segment stores comparable net sales growth.

Previous wording

Income from operations was 8.6% of net sales, or $219.8 million, for the first six months of fiscal 2025 compared to 8.5% of net sales, or $203.5 million, for the comparable period of fiscal 2024. The increase in operating income dollars was primarily driven by the increase in gross profit dollars. The increase in operating income rate was primarily driven by the improved gross profit rate.

Current wording

Income from operations was 8.9% of net sales, or $348.5 million, for the first nine months of fiscal 2025 compared to 8.5% of net sales, or $312.5 million, for the comparable period of fiscal 2024. The increase in operating income dollars was primarily driven by the increase in gross profit dollars. The increase in operating income rate was primarily driven by the improved gross profit rate.

Previous wording

Our effective tax rate for the first six months of fiscal 2025 was 23.2% compared to 24.5% in the first six months of fiscal 2024. The decrease in the effective tax rate for the six months ended July 31, 2024 was primarily due to the favorable impact of equity vestings in the current year.

Current wording

Our effective tax rate for the first nine months of fiscal 2025 was 23.6% compared to 24.5% in the first nine months of fiscal 2024. The decrease in the effective tax rate for the nine months ended October 31, 2024 was primarily due to the favorable impact of equity awards that vested in the current year.

Previous wording

The increase in working capital as of July 31, 2024, as compared to January 31, 2024, was primarily due to an increase in cash, cash equivalents and current marketable securities and an increase in inventory. The increase in working capital as of July 31, 2024, as compared to July 31, 2023, was primarily due to an increase in cash, cash equivalents and current marketable securities, partially offset by the timing of disbursements.

Current wording

The increase in working capital as of October 31, 2024, as compared to January 31, 2024, was primarily due to the seasonal increase in inventory and an increase in cash, cash equivalents and current marketable securities, partially offset by the timing of disbursements. The increase in working capital as of October 31, 2024, as compared to October 31, 2023, was primarily due to an increase in inventory and an increase in cash, cash equivalents and current marketable securities, partially offset by the timing of disbursements.

Previous wording

Our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The decrease in cash provided by operating activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 was primarily due to higher inventory purchases in the first six months of fiscal 2025 and the timing of disbursements.

Current wording

Our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The decrease in cash provided by operating activities in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 was primarily due to higher inventory purchases in the first nine months of fiscal 2025 due in part to planned early receipts of holiday merchandise for the Retail segment and timing of receipts for the Wholesale segment.

Previous wording

Cash used in investing activities in the first six months of fiscal 2025 primarily related to purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities. Cash used in investing activities in the first six months of fiscal 2024 primarily related to purchases of marketable securities, property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash paid for property and equipment in the first six months of fiscal 2025 and 2024 was $98.9 million and $78.5 million, respectively, which was primarily used to expand our fulfillment center network and store base in both periods.

Current wording

Cash used in investing activities in the first nine months of fiscal 2025 primarily related to purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities. Cash used in investing activities in the first nine months of fiscal 2024 primarily related to purchases of marketable securities, property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash paid for property and equipment in the first nine months of fiscal 2025 and 2024 was $144.1 million and $151.0 million, respectively, which was primarily used to expand our fulfillment center network and store base in both periods.

Previous wording

Cash used in financing activities in the first six months of fiscal 2025 primarily related to repurchases of our common shares under our share repurchase program and from employees to meet payroll tax withholding requirements on vested share-based awards. Cash used in financing activities in the first six months of fiscal 2024 primarily related to repurchases of our common shares from employees to meet payroll tax withholding requirements on vested share-based awards.

Current wording

Cash used in financing activities in the first nine months of fiscal 2025 primarily related to repurchases of our common shares under our share repurchase program and from employees to meet payroll tax withholding requirements on vested share-based awards. Cash used in financing activities in the first nine months of fiscal 2024 primarily related to repurchases of our common shares from employees to meet payroll tax withholding requirements on vested share-based awards.

Previous wording

During fiscal 2025, we plan to open approximately 57 new Company-owned retail locations, expand or relocate certain existing retail locations, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales volumes, upgrade our systems, improve and expand our digital capabilities, invest in omni-channel marketing when appropriate and repurchase our common shares. Additionally, in the first quarter of fiscal 2025, we opened a new Nuuly fulfillment center in Raymore, Missouri in response to the growth in the number of Nuuly subscribers. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales growth and plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal 2025 will be approximately $210 million, primarily to support new store openings and new and expanded fulfillment and distribution centers. All fiscal 2025 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents. We believe that our new store investments generally have the potential to generate positive cash flow within a year. We may also enter into one or more acquisitions or transactions related to the expansion of our brand offerings, including additional franchise and joint venture agreements. We believe that our existing cash and cash equivalents, availability under our current credit facilities and future cash flows provided by operations will be sufficient to fund these initiatives.

Current wording

During fiscal 2025, we plan to open approximately 58 new Company-owned retail locations, expand or relocate certain existing retail locations, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales volumes, upgrade our systems, improve and expand our digital capabilities, invest in omni-channel marketing when appropriate and repurchase our common shares. Additionally, in the first quarter of fiscal 2025, we opened a new Nuuly fulfillment center in Raymore, Missouri in response to the growth in the number of Nuuly subscribers. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales growth and plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal 2025 will be approximately $210 million, primarily to support new store openings and new and expanded fulfillment and distribution centers. All fiscal 2025 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents. We believe that our new store investments generally have the potential to generate positive cash flow within a year. We may also enter into one or more acquisitions or transactions related to the expansion of our brand offerings, including additional franchise and joint venture agreements. We believe that our existing cash and cash equivalents, availability under our current credit facilities and future cash flows provided by operations will be sufficient to fund these initiatives.