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Boot Barn’s Surprise Finding From Tariffs; Urban Outfitters’ Nuuly Unit Sees Big Gains
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Boot Barn is raising prices on its exclusive brands, after keeping them steady last year. BOOT BARN
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Boot Barn is one of many retailers raising prices this year. The move by the workwear company is the result of a pricing test of sorts that it ran last year in response to U.S. tariffs.
Irvine, Calif.-based Boot Barn sells work boots, western wear and outdoor attire in just over 500 stores nationwide. The company’s in-store brands—which include Cody James, Shyanne and Idyllwind—account for approximately 40% of its revenue. Boot Barn has historically priced its brands roughly on par with the wholesale brands it carries in its stores.
When Boot Barn’s wholesale partners raised prices last year as a result of U.S. tariffs, Boot Barn chose to hold prices steady on most of its own apparel, because the company had negotiated concessions with some of its manufacturers in China. Its wholesale partners, meanwhile, raised prices by mid-single-digit percentages.
The result? Many customers continued to buy the more expensive third-party brands, rather than switch to one of Boot Barn’s cheaper options, according to Chief Financial Officer Jim Watkins. “It was a little bit surprising,” Watkins said. Customer demand “wasn’t as elastic as we had thought.”
Boot Barn, as a result of its discovery, is moving forward with price hikes on its in-store brands to protect its margin, he said. The price increases will be in the low-single-digit percentages and affect a range of products, he said. Asked about the Supreme Court’s decision last week that struck down the president’s tariffs, Boot Barn said it’s too early to comment on how it could affect the company’s pricing strategy.
During the latest quarter, revenue increased 16%, to $705.6 million. Profit rose 14%, to $85.8 million. Its merchandise margin increased by 110 percentage points from the prior year, to 50.6%, due in part to strong sales of its in-store apparel brands.
—Kristin Broughton
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Content from our sponsor: Deloitte
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The Space Economy Is Mission-Critical. Here’s What Leaders Need to Know
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As space becomes essential business infrastructure, it is important for leaders to adapt to emerging threats, compliance requirements, and innovation possibilities. Read More
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📆 Earnings: AES, Autodesk, Block, Canadian Imperial Bank of Commerce, CoreWeave, Dell Technologies, Emcor Group, Hormel Foods, Intuit, J.M. Smucker, Monster Beverage, NetApp, Public Service Enterprise Group, Qnity Electronics, Rocket Cos., Rocket Lab, Royal Bank of Canada, SBA Communications, Sempra, Solventum, Viatris, Vistra, Warner Bros. Discovery and Zscaler
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Racks of clothing at the Nuuly warehouse facility in Levittown, Pa. MICHELLE GUSTAFSON FOR WSJ
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Urban Outfitters’ clothing-rental service Nuuly surpassed its sales target last year and is helping boost the retailer’s overall growth by driving shoppers to its other brands, the WSJ Leadership Institute's Jennifer Williams reports.
How did it do so? Jennifer notes that Nuuly has a couple of advantages over other rental options. For one thing, it buys about half of its apparel at cost from the Urban Outfitters brand, Anthropologie and Free People operations, saving money compared with buying inventory wholesale. The rest of the roughly 26,000 items are purchased wholesale from brands such as Madewell, Levi Strauss and Reformation. Nuuly also benefits from a built-in shopper base from its sister brands along with the expertise and investment potential of Urban Outfitters.
Key stats: Nuuly’s annual net sales surpassed $568 million for the year ended Jan. 31, exceeding a $500 million target executives set last February. Nuuly expanded its base of average active monthly subscribers to 420,000, up roughly 40% from a year earlier. And profit of $35 million increased more than $21 million year-over-year. Nuuly accounts for around 10% of Urban Outfitters’ overall revenue.
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What Else Matters to CFOs
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Atlanta Fed President Raphael Bostic said the rift between the Federal Reserve and the White House has begun to erode trust in the central bank’s apolitical standing. DESIREE RIOS/BLOOMBERG NEWS
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In central bank news, Atlanta Fed President Raphael Bostic issued one of the most direct warnings so far about the consequences of President Trump’s aggressive stance toward the Fed, Matt Grossman reports.
Bostic noted, in a farewell essay ahead of his retirement at the end of this month, that the rift between the Fed and the White House has begun to erode trust in the central bank’s apolitical standing.
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“[M]y travels over the past several months have made clear that the legal and rhetorical battles raging around the central bank right now have caused people across a wide cross-section of our population to begin to doubt the Fed’s independence…. This is a major concern.”
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—Atlanta Fed President Raphael Bostic
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📰 Other headlines
📈 Earnings wrapup
For more earnings news, click here.
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The WSJ CFO Council Summit
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This March 23–24, financial leaders will gather in Palo Alto for The WSJ CFO Council Summit to examine how CFOs are navigating market volatility, evolving trade and regulatory policy and the growing impact of AI on the future of the enterprise. Join the CFO Council and be part of the conversations shaping the future of finance and corporate leadership.
Request Invitation.
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy. Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew. You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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