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Urban Outfitters rises on holiday sales report

NEW YORK (AP) -- Shares of Urban Outfitters Inc. rose Thursday after the retailer posted strong November and December sales.

THE SPARK: Urban Outfitters said total sales grew 15 percent to $666 million over the holiday period. Retail sales at its namesake stores rose 10 percent, sales at Anthropologie stores increased 10 percent and sales at Free People jumped 33 percent. Direct-to-consumer sales picked up 38 percent.

THE BIG PICTURE: The holiday season is a critical period for retailers, and it is the first two months of Urban Outfitters' fiscal fourth quarter. Urban Outfitters is based in Philadelphia and runs 213 Urban Outfitters stories, 180 Anthropologie stores, a wholesale business and 77 stores under the Free People name.

On Dec. 12 Urban Outfitters said that to that point, fourth-quarter revenue had increased by a percentage in the high-single digits. Thursday's report suggests sales grew stronger as the holiday shopping season went on.

Last Friday a Credit Suisse analyst upgraded Urban Outfitters shares, saying the company's merchandise and prices had improved, sales from its website were growing fast, and the company was doing a better job of managing inventory.

THE ANALYSIS: Canaccord Genuity analyst Laura Champine kept a "Hold" rating on Urban Outfitters shares and raised her profit estimates for the fourth quarter and fiscal 2014. Champine also boosted her price target to $45 per share from $38.

SHARE ACTION: Urban Outfitters stock gained $1.67, or 4.1 percent, to $42.42 in afternoon trading. The shares are up 48 percent over the last six months and have been trading around all-time highs. The stock peaked at $43.27 earlier Thursday.