Propelled by impressive gains at its Nuuly subscription rental service, Urban Outfitters Inc. achieved a landmark second quarter with record-breaking sales and profitability. Nuuly’s soaring performance has helped make it a key growth driver for the company’s varied retail brands.
Company Sales Achieve New Heights on Nuuly’s Surge
The parent company—owner of brands such as Urban Outfitters, Anthropologie, Free People, and Nuuly—posted net sales of $1.7 billion in the three months ending with the second quarter, reflecting a 10.4% increase over the prior year. The Nuuly rental platform delivered exceptional gains, growing net sales by 28.6% year-over-year to reach $179 million. The service’s average active subscriber base passed 500,000 in early June—a rise of around 113,000 or 30.4% compared to the same period a year earlier—before leveling out with regular seasonal shifts. Other divisions performed strongly as well, with the FP Group, Urban Outfitters, and Anthropologie all generating growth in retail comparable sales by 10%, 8.4%, and 3% respectively.
Nuuly president Dave Hayne highlighted the milestone subscriber number during an analyst call, noting that the active subscriber count “crested over 500,000 in early June,” though figures moderated as typical seasonality returned.
Strategic Brand and Product Selection Expansion
Executives and analysts attribute much of Nuuly’s momentum to its integration with other Urban Outfitters Inc. banners. According to Wells Fargo analysts, about 45% of Nuuly’s selection in 2025 came from Urban Outfitters, Anthropologie, and Free People. Hayne emphasized that URBN’s brands remain central to Nuuly’s offering, but the platform also continues to widen its assortment. The portfolio now features fresh entries such as Collina Strada, Faithfull, Edikted, special collections with Simon Miller and Tyler McGillivary, and Revolve’s in-house brand. Q2 saw brand options grow by 35% to nearly 33,000, with Nike set to join and J.Crew preparing for an October debut.
Hayne explained that a large variety may overwhelm some shoppers, so Nuuly invested in personalized recommendations inspired by streaming platform algorithms. Over the last year, their personalization engine has improved recommendation quality, which in turn produced significant gains in user satisfaction, he added.
Operational Upgrades and Technology Initiatives
Enhancements to Nuuly’s customer journey include the launch of a proprietary fit guidance tool and efforts to streamline checkout and fulfillment. The company expanded its East Coast facility near Philadelphia from 300,000 to 1 million square feet, a step that will enable Nuuly’s logistics network to support up to 1.2 million subscribers more efficiently once finalized, according to Hayne. Automation in garment handling, order sorting, and picking will arrive in the coming year for further productivity.
Fall 2026 also saw the unveiling of a socially-focused microdrama campaign, with a strategy centered on engaging Gen Z and promoting shareable customer stories, according to recent campaign information.
Market Competition and Growth Projections
Nuuly’s rapid expansion is occurring amidst intensifying competition in the rental apparel market. Competitor Rent the Runway reported 155,692 active subscribers for Q1 2026 and is preparing to add over 30 brands this year in response to Nuuly’s surge.
On the outlook for upcoming quarters, Chief Financial Officer Melanie Marein-Efron projected companywide sales would rise in the high single digits for Q3 and the full fiscal 2027. Mid-single-digit comparable retail sales gains are expected for FP Group, Urban Outfitters, and Anthropologie, with wholesale revenue anticipated to climb in the low teens. For Nuuly specifically, Marein-Efron forecasted, “high 20s revenue growth driven by continued subscriber momentum.” Summing up the positive trajectory, she stated, “We continue to believe we could deliver high single-digit total company sales growth for the full year fiscal 2027.”
With robust financial results, investments in technology, operational improvements, and a continually expanding assortment, Urban Outfitters Inc. further cements its role as an innovator in both conventional retail and the dynamic subscription rental marketplace.