Pros & Cons
The results will also benefit from the management’s efforts to expand the direct-to-consumer business and streamline inventory, besides the uptick in wholesale operations. However, weakening demand, amid rising competition and high operating costs, might squeeze margins.
Mixed Q2
The Philadelphia-based firm, which owns popular brands like Anthropologie and Free People, impressed the market in August when it posted better-than-expected earnings for the second quarter, despite a year-over-year decline. Earnings came in at $0.61 per share on revenues of $962.3 million, which dropped 3%, hurt by weak comparable sales.
Rivals
Rival fashion retailer American Eagle Outfitters (AEO) recently reported stronger-than-expected results for its most recent quarter, despite muted comparable sales growth. It also guided the third-quarter earnings below forecast. Gap, Inc. (GPS) will be unveiling its third-quarter numbers on November 21 after the bell, with analysts projecting earnings of $0.51 per share.
Analysts, on average, have assigned Urban Outfitters’ stock moderate buy rating, with an average price target of about $28, which is 6% below the current levels. After a dismal performance in the early months of the year and hitting a two-year low, the stock has regained strength since the last quarterly report.