Urban Outfitters Q2: Nuuly's Growth Is Exciting (Rating Upgrade)

Caffital Research
1.62K Followers
(9min)

Summary

  • Urban Outfitters, Inc. reported Q2 results with similar retail sales momentum to Q1, carried by Anthropologie and Free People but pushed down by Urban Outfitters.
  • The underlying margin expansion was great, although higher discounting activity in the Urban Outfitters brand combined with slower sales countered some margin expansion.
  • The Nuuly subscription service showed accelerating subscriptions and growth, being an exciting development for the company with potentially great significance over the long term.
  • Urban Outfitters' stock is now valued fairly.

The storefront of an Urban Outfitters store on the Bloor St in downtown Toronto.

JHVEPhoto

Urban Outfitters, Inc. (NASDAQ:URBN) reported the company’s fiscal Q2 results on the 21st of August in post-market hours. The company reported soft comparable sales, understandably sending Urban Outfitters’ stock down 10%.

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I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward.

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