Hidden within the positive pronouncements and cautious optimism of Urban Outfitters' recent earnings calls lies a subtle but significant shift: the potential rise of a new revenue powerhouse within the URBN family. While analysts dissect the turnaround efforts at the flagship Urban Outfitters brand, a silent revolution is taking place in the form of **FP Movement**, the brand's activewear offshoot.

FP Movement isn't just riding the coattails of the athleisure trend; it's quietly exceeding expectations and demonstrating a trajectory that could lead it to become URBN's next $1 billion brand, as Dave Hayne, CTO and President of Nuuly, predicts. This isn't mere corporate bravado; a closer look at the data reveals a compelling story of explosive growth and remarkable profitability.

In Q4 of fiscal year 2024, FP Movement registered a staggering 45% retail segment growth. This trend has continued into the current fiscal year, with February showing continued powerful double-digit growth. Such explosive growth isn't just impressive in its own right; it's outpacing even the impressive performance of Free People, its parent brand, which saw a 19% comp increase in Q4.

What makes FP Movement even more remarkable is its **outstanding profitability**. Unlike the flagship Urban Outfitters brand, which is struggling to achieve breakeven, Movement boasts a double-digit operating profit rate. This indicates a healthy and sustainable business model, capable of generating significant cash flow for URBN.

The company is laser-focused on harnessing this potential. Dick Hayne highlighted the stellar performance of Movement's 38 standalone stores, revealing that their average sales per square foot surpass even the average Free People locations. This has emboldened URBN to significantly increase store count and size, planning a 66% increase with 25 new Movement stores in fiscal year 2025. These new stores will be 30% larger than the current fleet average, averaging 2,600 gross square feet.

URBN's strategy goes beyond just expanding brick and mortar presence. The company recognizes the synergistic power of its physical and digital channels, noting that opening new stores boosts not only brand recognition but also lifts digital sales in surrounding areas.

Furthermore, FP Movement is strategically leveraging the wholesale channel, partnering with premiere activity-based specialty accounts like DICK'S Sporting Goods. This not only broadens Movement's reach but also enhances its credibility within the competitive activewear market. The brand is carefully choosing its wholesale partners, focusing on accounts that resonate with its core values of fashion, performance and female-centricity.

Projected Growth of FP Movement Stores

This chart illustrates the projected growth in the number of FP Movement stores, showcasing URBN's commitment to expanding this brand.

Here's where the potential $1 billion figure starts to take shape. If FP Movement, with its 38 standalone stores, is already surpassing the average sales per square foot of Free People, imagine the revenue potential with over 60 stores in the coming year. Adding to this the synergistic effect of increased brand recognition and boosted digital sales, coupled with a strategic wholesale expansion, the path to a $1 billion empire seems less like a dream and more like a calculated trajectory.

While the attention remains focused on the turnaround efforts at Urban Outfitters, FP Movement is quietly laying the foundation for a retail empire. This silent revolution, fueled by phenomenal growth and enviable profitability, might just be the key to unlocking URBN's next phase of success. The potential is there; the numbers are compelling. The question now is, will the market catch on to this silent revolution brewing within Urban Outfitters?

"Fun Fact: FP Movement's focus on "female-centricity" reflects a broader trend in the activewear market, where women are increasingly driving growth. The global women's activewear market is expected to reach over $217 billion by 2028, highlighting the significant opportunity FP Movement is tapping into."