Earnings Preview: Urban Outfitters

Urban Outfitters (URBN) is expected to report Q3 earnings before market open Thursday, November 13, with a conference call scheduled for 11:00 am ET.

Guidance

Analysts are looking for a profit of 35c on revenue of $479.14M. The consensus range is 33c to 37c for EPS, and revenue of $474M to $495M, according to First Call. After beating Q2 estimates in August, the company recently reported its Q3 same-store sales increased 10%.

Analyst Views

Cowen said that while the company's peers are seeing SSS decelerate, earnings decline and margins contract, Urban Outfitters is "bucking the trend". In addition, the company's returns on capital are nearing historical peaks, and the firm said that the specialty retailer is "firing on all cylinders" in one of the toughest macroeconomic environments ever. Barclays analyst Jeff Black appears to hold the opposite view, saying that while Urban Outfitters is an attractive long-term investment, there are "clear signs" sales at its Anthropologie unit are slowing in the near-term. Black believes it is possible that the division's SSS will be negative in Q4 into 1H09. FBR Capital Markets agrees, saying that while the retailer is one of the best-managed, the firm still holds a pessimistic view of the consumer and macro landscapes for both the holiday season and FY09. The firm believes business slowed in October, particularly at Anthropologie.