Earnings Preview: Urban Outfitters

| About: Urban Outfitters, (URBN)

Urban Outfitters (NASDAQ:URBN) is expected to report Q2 earnings before market open Thursday, Aug. 14, with a conference call scheduled for 11:00 am ET.

Guidance

Analysts are looking for a profit of 29c on revenue of $442.23M. The consensus range is 26c to 31c for EPS, and revenue of $414.34M to $454.3M, according to First Call.

Analyst Views

The retailer recently reported total Q2 sales of $454.3M, up 30% over the same period last year, and said Q2 SSS were up 13%. Additionally, Urban Outfitters said same-store sales sales at Anthropologie, Free People and Urban Outfitters rose 7%, 10% and 19%, respectively, for a combined July increase of 13%.

On August 8, a Buckingham analyst called the company "a recipe for success" that continues to drive top line gains even in an environment where overall demand for apparel appears low. The analyst views the company's Q2 performance as "outstanding" in light of flat to down EPS projections for most specialty retailers. The firm believes Urban's Q2 should benefit from higher gross margin with greater full price selling and lower clearance inventory in the Urban Outfitters division.

On the other hand, a Goldman analyst is a little more cautious on the stock. The analyst began coverage of the U.S. specialty apparel sector with a Cautious view as it believes the sector faces a major execution risk and weak consumer spending amid challenging macroeconomic conditions. The analyst said significantly less diversified assortments, coupled with a "highly fragmented competitive landscape," make apparel retailers much more vulnerable to fashion misses. The analyst feels this execution risk is not fully reflected in the stocks and several retailers were seeking to "become something they're not" in response to strong competitors and continued macroeconomic pressure.

Next event: Urban Outfitters is expected to present at the Goldman Sachs Global Retailing Conference on September 3.

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Tagged: , Apparel Stores, Earnings
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