Urban Outfitters (URBN) is expected to post second-quarter results on Tuesday after the bell. Analysts are expecting earnings to more than double driven by higher digital channel growth and positive retail store sales. Online spending is predicted to remain as a wildcard for the company, while investors focus on the fashion trends lineup.
On average, analysts expect the company to report earnings of $0.77 per share for the second quarter compared to a reported income of $0.44 per share a year ago. Revenue is predicted to grow by 12.20% to $979.22 million. On the market front, the majority of the analysts are recommending a “hold” rating on the stock with an average price target of $47.56.
For the latter half of 2018, the company is considered as one of the top apparel and footwear picks by the brokerage firm Jefferies, according to the Barron’s Next. The company’s fundamentals are running on the strength of the fashion cycle and a very healthy consumer setting. The firm believes more online spending is likely to remain as a contributor to the company’s results.
For the recently completed first-quarter, earnings jumped 245% helped by strong sales, improved margins, better leverage of selling, general and administrative expenses and lower taxes. Revenue increased 12.4% on double-digit growth in comp store and digital channel sales.
As of April 30, 2018, the Philadelphia, Pennsylvania-based company operated 246 Urban Outfitters stores, 226 Anthropologie Group stores, 134 Free People stores and 10 Food and Beverage restaurants. Urban Outfitters has been selling lifestyle-oriented general merchandise and consumer products through retail and wholesale.
The company has exceeded the Street’s expectations thrice in the past four quarters with the earnings climbing by double digits percentage. Moving ahead, market analysts predict earnings to grow by 41% for the third quarter and by 59% for the full year 2018.
Shares of Urban Outfitters ended Monday’s regular trading session up 1.91% at $47.51 on the Nasdaq. The stock had gained 36% for the year-to-date and 147% for the past year.
Lowe’s Companies (LOW) is set to report its second-quarter results on Wednesday before the market opens. This will be the first quarter where the home improvement chain will be reporting its results under the helm of the new CEO Marvin Ellison. It would be interesting to see whether Lowe’s is able to mimic the stellar results posted by its peers this earnings season.
For the second quarter, analysts expect earnings to come in at $2.02 per share on sales of $20.82 billion, an increase of about 7% over last year. Last week, Lowe’s rival Home Depot (HD) reported stellar results backed by strong comp-store sales growth of 8% and raised its outlook for fiscal 2018.
Thanks to strong macro factors, retailers across the board have been benefitted this season which was reflected in their earnings. This is expected to bode well for Lowe’s as well in the second quarter results in addition to the strategic changes implemented by Ellison since he took over the corner office.
Last quarter, the home improvement chain reported disappointing results sending the stock down 8% post the announcement of the results. Unfavorable weather conditions dragged the sales on its outdoor category, which had a dent on its first-quarter results.
Comp-store sales will be a key metric watched by investors. Given the favorable tailwinds for the company, one can expect the same-store sales growth to be better in the second quarter compared to a paltry 0.6% reported last quarter. Rival Home Depot saw its comp sales jumping 8% in the second quarter.
Lowe’s is expected to garner more sales from its Pro customers, which will give a fillip to the second quarter results. With improved consumer spending and rebound in the housing market, maintenance, repair, and operations are projected to contribute more to the top line.
However, Ellison and his team need to keep a tab on the expenses and inventory position, which would impact margins. There is stiff competition from the likes of Amazon (AMZN) to big-box retailers like Lowe’s which needs to beef up its digital initiatives apart from the traditional brick-and-mortar stores.
Lowe’s stock performance has been modest in 2018 growing about 7% while in the last 12 months the stock had surged above 34%. Shares of Lowe’s rose 1.01% to $98.97 at the end of Monday’s regular trading session.
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