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Bull of the Day: Urban Outfitters (URBN)

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Based in Philadelphia, Urban Outfitters Inc. (URBN) is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products through its brands Urban Outfitters, Anthropologie, Free People, BHLDN, and Terrain. URBN has operations in the U.S., Canada, and Europe.

Q1 Earnings Recap

Following Urban’s first quarter earnings release, shares rose about 9% as investors were impressed with the recovery in revenue and earnings.

Total sales grew 57.6% year over year to $927 million, primarily driven by a 51% increase in comparable store sales. Comps for Anthropologie, Free People, and Urban were all up double digits.

Net income improved to $54 million, or $0.54 per share compared to a loss of $138 million, or $1.41 per share in the year-ago period.

In a press release, CEO Richard Hayne said “The first quarter was one for the record books; record sales, a record low markdown rate, and record earnings per share.”

URBN Breaks Out

Urban Outfitters, Inc. Price and Consensus
Urban Outfitters, Inc. Price and Consensus

In the past six months, shares of XPO have jumped more than 50% compared to the S&P 500’s 12.5% increase. Earnings estimates have been rising too, and URBN is a Zacks Rank #1 (Strong Buy) right now.

For fiscal 2022, 10 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 70 cents to $2.36 per share. Earnings are expected to grow considerably compared to the prior year period. Fiscal 2023 looks strong too, and earnings should see positive year-over-year growth as well.

Looking ahead, management said that sales trends have accelerated in May, and they believe that is a good sign for Q2 results. Urban isn’t the only retailer enjoying a rebound in demand right now, and if the current trend continues, shareholders could be in store for even more gains.

If you’re an investor searching for a retail sector stock to add to your portfolio, make sure to keep URBN on your shortlist.

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