Urban Outfitters Inc. (URBN) Up on Strong Fourth Quarter Results

Shares of Philadelphia, PA, based Urban Outfitters Inc. (URBN) spiked higher on Tuesday, against the backdrop of a sharp sell-off in the overall market. Urban Outfitters was up $4.55, rising 11.52% to close at 44.06, on volume of 10,776,295 shares. The company reported fourth quarter earnings that exceeded analysts expectations, as well as solid growth in revenues. The stock closed at it's highest level in 19 months.

Founded in 1970, Urban Outfitters operates retail clothing distribution, through both retail and wholesales segments.
The retail segment sells merchandise through the company's stores, catalogues, call centers and website. Its brands include Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn. The wholesale segment operates under the Free People brand, where it designs and distributes women's casual wear. The company's stock trades on the NASDAQ.

After the market close on Monday, the company announced that its fourth quarter earnings came in at $80 million, or $.60 per share, for the quarter ended on January 31. This was down from $88.7 million, but an increase of $.01 per share compared to the same period last year. However earnings exceeded analysts expectations of $.58 per share. Revenue for the quarter was reported at $1.01 billion, 12% higher than the $905.9 million total reported for the fourth quarter of 2013, and also higher than analysts expectations.

For the full year ended January 31, 2015, earnings were $232.4 million, or $1.68 per share. This was down from the full year ended January 31, 2014, earnings of $282.4 million, or $1.89 per share. But total revenue for the full year was $3.323 billion, up 7.7% over the $3.086 billion for the previous year.

Despite the sharp sell off market wide, investors reacted positively to the earnings news, driving the stock to it's highest level since August of 2013, and up 58% since its low of November 18.

In another important disclosure, the company reported that same store sales had increased 6% from a year earlier. However some of the increase in sales came from price markdowns, evidenced by the decline in gross margin from 36.7% in the fourth quarter of 2013, to 34.6% in the most recent quarter.

During the fiscal year, the company opened 38 new stores including: 15 Anthropologie Group stores, 12 Free People stores, and 11 Urban Outfitters stores. The company closed 3 Urban Outfitters stores due to lease expirations. The company's Free People wholesale segment sells its products to approximately 1,600 specialty stores and select department stores worldwide.

Meanwhile analysts at Janney Capital upgraded the company's stock from "neutral" to "buy", and raised the price target on the stock from 37 to 48.

"We are pleased to report our first billion dollar quarter, fueled by positive retail segment 'comps' at all of our brands, "said Richard A. Hayne, Chief Executive Officer. "It is encouraging to see this sales trend continue into Q1..."

Other News URBN

FBR & Co. Reiterates Market Perform, Raises PT On Urban Outfitters Following 4Q EPS Beat
FBR & Co. analyst Susan Anderson reiterated a Market Perform rating on Urban Outfitters, Inc., and raised the price target from $38.00 to $40.00.

Will This Be The Quarter Urban Outfitters Turns Around?
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Published on Mar 11, 2015
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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