Urban Outfitters Delivers Strong Q1 Results, Beats Expectations

Urban Outfitters, Inc. (URBN) a leading lifestyle retailer delivered strong Q1 results backed by double-digit growth in both retail and digital channels. Shares soared 8% in the pre-market trading session on Wednesday.

The company reported earnings of $0.54 per share, compared to a loss of $1.41 per share in the prior-year quarter. Earnings surpassed the Street’s estimates of $0.17 per share.

Net sales were up 57.6% at $927.42 million year-over-year, beating the Street’s estimates of $900.15 million.

Urban Outfitters engages in selling apparel, clothing accessories, and apartment products, catering to teens and young adults.

On a year-over-year basis, comparable Retail segment sales were up 51% with the Free People Group brand seeing comparable sales growth of 77%, Anthropologie Group growth of 50%, and Urban Outfitters growth of 42%.

Total Retail segment and Wholesale segment net sales were up 53% and 196% respectively year-over-year. (See Urban Outfitters stock analysis on TipRanks)

The company’s CEO Richard A. Hayne said, “The first quarter was one for the record books; record sales, a record low markdown rate, and record earnings per share…Strong ‘comps’ were driven by powerful demand and superb execution by all teams. In May, sales trends have accelerated further which we believe bodes well for second-quarter results,” 

Following the Q1 results, Oppenheimer analyst Brian Nagel reiterated a Hold rating on the stock and said, “Overall, business trends at URBN improved meaningfully lately and results easily topped expectations, reflecting re-opening tailwinds and improved internal initiatives at the company.”

Nagel added, “For a while, we have recommended clients remain on the sidelines with URBN, owning to often inconsistent sales and profit trends and lacking fundamental momentum at the company. Overall, we look upon news today that sales at URBN have improved as a positive for the company and the consumer sector, broadly.” The analyst did not assign any price target for Urban Outfitters stock.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 4 Buys versus 9 Holds. The average analyst price target of $40.25 implies 15.1% upside potential to current levels. Shares have increased 42.4% year-to-date.

TipRanks data shows that financial blogger opinions are 75% Bullish on URBN, compared to a sector average of 69%.

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