Executives from Urban Outfitters Inc. and Arc’teryx shared some key elements to their success through 2024 and into the holiday period at the ICR Conference in Orlando, Florida, earlier this month.
In November and December, FP Movement’s retail comparable net sales increased by 23%. Parent company Urban Outfitters Inc. opened 15 new FP Movement stores over the course of 2024. Wholesale net sales at Free People increased by 15% with higher sales to specialty and department stores. That activity helped contribute to an overall 7% net sales boost at Urban Outfitters Inc. for the 11 months ended Dec. 31, and a 10% net sales increase in November and December.
“As it relates to the consumer itself, if you’ve heard us for the last couple of quarters, we felt like the consumer was in a good place,” said Frank Conforti, co-president and chief operating officer at Urban Outfitters Inc., in a fireside chat at ICR. “And given our holiday results and some of the positive sentiments and some of those [results] that have come out, I think we feel the same, if not better, about the consumer.”
FP Movement Store Growth, UO Potential and Tariffs
The Free People brand, which includes FP Movement, has the opportunity to again hit the high-teens sales growth that it achieved last year, Conforti said, which was due to record low markdown rates. But the goal is to make FP Movement a billion-dollar brand in the near future, he said.
Urban Outfitters plans to open 25 new FP Movement standalone stores this year. In some cases, those stores perform better on a sales-per-square-foot basis than Free People stores, and every Free People store will have some Movement elements, too.
“The customer constantly comes in and says, ‘When are you bringing an FP Movement store to my city?'” Conforti said. “So the awareness is really building and the excitement is building for the brand.”
Urban Outfitters, the company’s most challenged brand, has the most potential for growth, said Conforti, who was joined onstage by Melanie Marein-Efron, chief financial officer, and Tricia Smith, global chief executive officer of Anthropologie Group. Reaching that potential would drive the company’s gross profit up, he said.
While it’s unclear whether or not tariffs will be implemented by the Trump administration, Conforti said the company has reduced its penetration in China for its own brand product to approximately 5%.
“It’s been a multi-year effort, and I feel really good about where we are and the flexibility that we have now in the model and being able to move from one origin to another, if we need to, depending on exactly where the tariffs have landed,” he said.
Arc’teryx’s Foray into Footwear Helped by Salomon
Arc’teryx CEO Stuart Haselden said in a fireside chat with IPO Edge at the ICR Conference that part of the brand’s growth over the past year is due to its successful footwear launch. One advantage he cited was being able to ask its sister brand, Salomon, for advice.
“We leveraged their sourcing base, their design capabilities, and have created our own team in Portland that’s created some exciting new models that we introduced this year,” Haselden said. “We’re excited to build on that.”
In turn, Arc’teryx assisted Salomon’s North American expansion by helping the brand find new retail locations, Haselden said. For example, after Arc’teryx exited its Soho space in Manhattan to open its new flagship location, Salomon took over the space.
“And they’ve done fantastic business there since taking that space over,” he said.
In addition to footwear, Arc’teryx will also focus on products for women in 2025 after experiencing rapid growth through 2024.
“We want to continue to invest in expanding our offering, improving our fits, improving our color options for our female guests, so that’s also a focus,” Haselden said. “And just continue to innovate in our core outerwear offering.”
Sustainability is a core value of the brand, which comes to life through its ReBird repair initiative, a service that is offered in a growing number of stores. And the brand distinguishes itself in the market by focusing on gear for the highest level of performance, Haselden said.
“We build products for the point of extreme need, and we count among our customers elite search and rescue units that serve communities around the world,” he said. “And so we see ourselves at the very cutting edge of that part of the product world.”
Haselden said he’s looking forward to new core outerwear offerings that will be launched in 2025.
“There’s going to be some exciting new product announcements that we’ll share in the second half of the year that we believe will be foundational, disruptive in the industry, and create a step-function opportunity for our business into the future,” he said.
Amer Sports said earlier this month that it expects full year 2024 revenue growth to be at the high end of its previous guidance of 16% to 17% compared to 2023. Amer Sports will release its fourth quarter results on February 25.
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.