Urban Outfitters Bucks Sagging Retail Trend

Urban Outfitters, Inc. (URBN) share price has been rallying after the company reported excellent second-quarter results that included a big gain in earnings from the prior year period. The long-term outlook for the company looks favorable, with the next-year estimate projecting earnings growth of more than 20%.

Urban Outfitters, Inc operates as a retailer through Urban Outfitter and Anthropologie, as well as a wholesaler through Free People. Each brand sells an array of clothing, home furnishings, and accessories through its own stores, catalogs, or web site. The company has a market cap of $5.7 billion and is headquartered in Philadelphia, Pennsylvania.

Second-Quarter Results

Many retailers have struggled for the past year as consumers have continued to be burdened with higher energy prices and a restrictive credit environment. But Urban Outfitters has been bucking the trend, as seen by the company's impressive second-quarter results, reported on Aug 14.

Revenue increased 30% from last year to $454.3 million. Net income totaled $57 million, up from $31.9 million in the same period last year. This produced earnings of 33 cents per share, ahead of analyst estimates of 29 cents per share.

Consistent Earnings

This marks the fourth consecutive quarter that Urban has surprised and beaten analyst estimates, having done so by an average 3 cents, or 13%.

Analyst Estimates

Analyst estimates have been grinding higher for the last 2 months, with the current-year estimate advancing to $1.34 per share from $1.23 per share. The next-year estimate is bullish, pegged at $1.61 per share, a 20% earnings growth projection.

New Leadership

On August 20th Urban Outfitters announced the new CEOs for the Anthropologie brand. The company opted for a joint leadership structure, rather than a single CEO, and promoted Wendy Wurtzburger and Wendy Brown to the new roles. Both were senior executives and have been with the company for more than 25 years, combined.

The Chart

Shares of URBN have been trending higher since last October, recently establishing a new 52-week and all-time high above $38. Take a look at the chart.

 

Comments

[captainccs:]

Gee, I saw the very same charts in Zacks today. We need a few more analysts talking up the stock and then it will be time to sell covered calls.

Oh, this Seeking Alpha piece IS by Zacks... If it's only one analyst talking up the stock, forgetaboutit.

2008 Sep 11 11:32 AM