By Katherine Hamilton

Urban Outfitters logged strong demand across its three main brands for the first time in years, giving investors hope consumers are still buying clothes despite other retailers' cloudy reports.

The stock rose 21% on Thursday, at one point hitting a 52-week high of $73.68. Shares are up 30% this year. Shares of other clothing retailers? expected to report earnings next week followed suit, with Abercrombie & Fitch up 7%, Gap rising 5% and Guess advancing 4%.

Along with higher-than-expected sales in its leading brands Anthropologie and Free People, Urban Outfitters' namesake brand posted positive growth for the first time since 2022. The results injected optimism into the retail industry after rivals such as TJX Cos. and American Eagle highlighted worries that tariffs could pressure earnings and demand.

Urban Outfitters' same-store sales grew 4.8% in the first quarter, beating Wall Street's expected 3.6%. It was the first time in three years that the company posted same-store sales growth across all three of its main brands, according to JP Morgan analysts.

The most notable jump was in its namesake brand, which rose 2%, its first positive growth since the first quarter of 2022, the analysts said. The brand's growth was mainly driven by Europe's 14% jump, while North American sales were still down, falling 4%.

Urban Outfitters' ability to turn around its namesake has been a point of concern among investors. The company is now selling more full-priced products after a period of stepping up discounts, which is helping lower operating costs in the segment.

Anthropologie and Free People continued to see higher traffic, transactions and conversions both in-store and online. Anthropologie led growth with sales up 7%, though management is guiding for more moderate mid-single-digit growth in that segment during the current second quarter.

Management kept full-year outlook expectations fairly conservative, despite the first quarter beat. It guided for company-wide revenue growth in the high single digits in the second quarter, compared with an 11% spike in the first quarter.

Chief Operating Officer Frank Conforti said that the company wouldn't raise its guidance because it is still uncertain about how tariffs and consumer sentiment will unfold.

"Just given the constant news around the uncertainty on the consumer, we feel like it makes sense to plan conservative. And I hope that our plans are conservative," Conforti said.

The guidance assumes a 10% global tariff on all items from outside the U.S., except Chinese imports, where Urban is estimating a 30% tariff. The company sources from India, Vietnam and Turkey, with no single country accounting for more than a quarter of production, executives said. It gets less than 5% of its product from China.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

May 22, 2025 11:37 ET (15:37 GMT)

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