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How Urban Outfitters (URBN) is Poised Before Q1 Earnings

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Urban Outfitters, Inc. URBN is likely to register growth in its top line from the last fiscal year’s quarterly reading when it releases first-quarter fiscal 2023 results on May 24, after market close. The Zacks Consensus Estimate for quarterly revenues is currently pegged at $1,073 million, indicating a rise of 15% from the prior fiscal year’s quarterly reported figure.

However, the bottom line is likely to decline from the last fiscal year’s quarterly reading. The Zacks Consensus Estimate for quarterly earnings currently stands at 42 cents a share, suggesting a decrease of 22.2% from the earlier fiscal year’s quarterly tally. The consensus mark has been stable over the past 30 days.

A glance at this specialty lifestyle products retailer’s performance over the trailing four quarters shows that it has delivered an earnings surprise of 72.3%, on average.

Factors to Note

Urban Outfitters’ performance for the fiscal first quarter is most likely to have benefited from its strategic efforts, including technological advancements, store rationalization and merchandising improvements. URBN has been strengthening its direct-to-consumer business, enhancing productivity in the existing channels, expanding its product assortment and optimizing inventory level.

URBN is also steadily boosting its presence by rapidly expanding its e-commerce activities. Robust strength in the digital channel continues fueling the Retail unit’s growth. Its FP Movement initiative to boost growth at the Free People brand is also yielding. All these tailwinds are expected to have favored Urban Outfitters’ top line during the quarter under review.

On its last earnings call, management cited that consumer demand in the fiscal fourth quarter was solid and is likely to continue through spring. During the first four weeks of the fiscal first quarter, the total Retail segment’s comp sales increased more than 20% from the same-period level in fiscal 2022 and fiscal 2020. Urban Outfitters projected first-quarter sales growth in mid-teens from the fiscal 2020 actuals. URBN anticipated the Retail segment’s sales to come in the mid-to-high teens’ range, while the Wholesale segment sales might be approximately flat.

However, inflationary pressures from inbound freight, delivery expenses, raw materials and wages might have hurt profits in the quarter under review. Also, the ongoing supply-chain headwinds and higher transportation expenses remain deterrents. In addition, Urban Outfitters has been grappling with higher SG&A expenses for a while now. Higher marketing and creative spend to boost digital growth might have escalated SG&A in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Urban Outfitters this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Urban Outfitters, Inc. Price and EPS Surprise

Urban Outfitters, Inc. Price and EPS Surprise
Urban Outfitters, Inc. Price and EPS Surprise

Urban Outfitters, Inc. price-eps-surprise | Urban Outfitters, Inc. Quote

Urban Outfitters has a Zacks Rank #3 and an Earnings ESP of -2.07%.

Stocks With a Favorable Combination

Here are a few companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:

Costco COST has an Earnings ESP of +1.90% and a Zacks Rank #2, currently. COST is likely to register an increase in the bottom line from the last fiscal year’s quarterly reading when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has increased a couple of cents to $3.04 per share in the past 30 days, indicating an improvement of 10.6% from the prior fiscal year’s quarterly tally. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco’s top line is expected to rise from the last fiscal year’s quarterly reported figure. The Zacks Consensus Estimate for quarterly revenues is pegged at $51.8 billion, which suggests an increase of 14.3% from the figure reported in the prior fiscal year’s comparable period. COST delivered an earnings beat of 13.3%, on average, in the trailing four quarters.

Casey's General Stores CASY currently has an Earnings ESP of +3.73% and a Zacks Rank #3. CASY is anticipated to register a top-line increase from the last fiscal year’s quarterly reading when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for CASY’s revenues is pegged at $3,341 million, indicating a rise of 40.4% from the figure reported in the prior fiscal year’s quarter.

The Zacks Consensus Estimate for Casey's General Stores’ quarterly earnings is pegged at $1.48 per share, suggesting an improvement of 32.1% from the last fiscal year’s quarterly reported number. CASY delivered an earnings beat of 21.6%, on average, in the trailing four quarters.

lululemon athletica LULU currently has an Earnings ESP of +0.28% and a Zacks Rank of 3. LULU is likely to register an increase in the bottom line from the last fiscal year’s quarterly reading when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has moved 8.5% north to $1.40 per share, suggesting 20.7% growth from the earlier fiscal year’s quarterly reported number.

lululemon athletica’s top line is expected to rise from the prior fiscal year’s quarterly reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.54 billion, which suggests a rise of 25.7% from the figure reported in the prior fiscal year’s quarter. LULU delivered an earnings surprise of 20.9%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
 
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Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
 
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