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Urban Outfitters Posts Q4 Earnings Miss, Record Sales

Madeleine Johnson

Urban Outfitters Inc. URBN just released its fourth quarter fiscal 2017 earnings results, posting earnings of 55 cents per share and revenues of $1.03 billion. Currently, URBN is a #4 (Sell) on the Zacks Rank, and is up 2.20% to $25.97 per share in trading shortly after its earnings report was released.

Missed earnings estimates. The company reported earnings of 55 cents per share, lagging behind the Zacks Consensus Estimate of 56 cents per share and decreasing 9.8% year-over-year.

Matched revenue estimates. The company saw revenue estimates of $1.03 billion, matching our consensus estimate of $1.037 billion and growing 2% year-over-year.

Comparable Retail segment net sales, which includes Urban Outfitters’ comparable direct-to-consumer channel, were flat. Breaking it down by brand, comparable retail segment net sales increased 2.0% at Urban Outfitters and 1.2% at Free People, but decreased 2.9% at Anthropologie.

Urban Outfitters’ comparable sales this quarter were driven by strong, double-digit growth in its direct-to-consumer channel, which were offset by negative retail store comparable net sales.

For Q4, the company’s gross profit rate decreased by 142 basis points versus the prior year’s comparable period. The decline in gross profit rate was driven by deleverage in customer delivery and logistics expense rates.

“We are pleased to announce record fourth quarter and full year sales driven mostly by the continued success in the direct-to-consumer channel,” said Richard A. Hayne, Chief Executive Officer. “As we enter a new year, we will continue to shift our efforts and spend into our fastest growing channel,” finished Mr. Hayne.

Here’s a graph that looks at Urban Outfitters’ price, consensus, and EPS surprise:

Urban Outfitters, Inc. Price, Consensus and EPS Surprise

Urban Outfitters, Inc. Price, Consensus and EPS Surprise | Urban Outfitters, Inc. Quote

Urban Outfitters, Inc. operates two business segments consisting of a lifestyle-oriented general merchandise retailing segment and a wholesale apparel business. The retailing segment operates through retail stores and direct response, including a catalog and two web sites. The company's wholesale business designs and markets young women's casual wear which it provides to the company's retail operations and sells to specialty retailers worldwide.

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