Urban Outfitters, Inc. (NASDAQ:URBN) Q3 2023 Earnings Call Transcript

Richard Hayne: Sure, Janet. Again, I’ll make a shot briefly and then ask Tricia to talk about it because she’s much closer than I. In general, the furniture business that Anthropologie is doing quite well. Now they are a little bit more promotional than they were last year. But I will say look, other than that, the sales are quite strong with Urban Outfitters. When you look at the merchandising, I assume you’re talking about both in-store and online. Online, we’re interested in redoing our website and renovating that. And that would, I think, give a whole new look to what we’re doing. And I hope that we would get to that by midyear or a little bit after that. As far as the store is concerned, we have plenty of things that we’re planning to do in the store to draw more attention to what we think are the alpha items, the better items.

And that’s done with imagery and also done with just taking out some of the styles, so there’s fewer styles available. And the ones that are available have more depth behind us. And so I think you will still see changes, and that should start early in the season.

Tricia Smith: And Janet, I would add on the Anthropologie home business. I think nice double-digit demand in Q2 and the nice high single-digit demand and great price demand as well as some promotionality as we head into Black Friday. But we’re also getting the benefit, I think, of shorter transit times. And we’re able to ship and lessen our backorders pretty significantly. So demand trend remains consistent. And our net is doing quite well as we now are shipping out and shortening our back order time line.

Melanie Marein-Efron: I think I can also add to the Urban outsiders group. The speed to market is going to be a key to Urban’s continued success to react to the customers trend — evolution of the trend of what they want the customer in urban is very fast and being able to keep up with them going into the spring season, I think will be a big change that we need to see.

Operator: Thank you. Please standby for our next question. Our next question comes from the line of Jay Sole with UBS. Your line is open.

Jay Sole: Great. Thank you so much. Dick, would it be possible to elaborate on what you’re seeing in the denim category right now?

Richard Hayne: Sure. I can elaborate on it. For most of the year, denim has been downtrending some from the prior years. And we think that will continue into the fourth quarter. However, I think we’re all pretty excited about where denim might go next year. And so I hope that we will have a comp — a positive comp in the denim category next year with — that’s in Urban Outfitters. In Anthropologie they’ve seen amazing numbers in their denim by going into, I guess, what you’d call a little bit dressier denim. And their denim business extremely strong. And Free People denim business have done nothing but go up for the last four years, five years. So we’re very pleased with that.