What to Expect From Urban Outfitter Earnings

Urban Outfitters Inc. (NASDAQ: URBN) is scheduled to report its fiscal third-quarter financial results after the markets close on Monday. The consensus estimates from Thomson Reuters call for $0.42 in earnings per share (EPS) on $872 million in revenue. In the same period of the previous year, the retailer posted EPS of $0.35 and $814.47 million in revenue.

This past week has been perhaps the worst week the markets have seen in months, and retail stocks were hit hard, some after they reported earnings and some even in anticipation of a bad report. This was seen across the board, and the carnage looks to continue. In the past week alone Urban Outfitters’ shares dropped over 16%.

In order to have a solid quarter heading into the holidays, this company will have to report solid comparable sales. In the fiscal second quarter, comparable retail segment net sales, which include the comparable direct-to-consumer channel, increased 4%. Comparable retail segment net sales increased 14% at Free People, 4% at Urban Outfitters and 2% at the Anthropologie Group. Wholesale segment net sales rose 21%. Following the release of these positive sales the stock was up over 5%.

At this point in the game, a strong quarter here could pull Urban Outfitters up and build some much-needed momentum going into the holiday season, despite other retailers suffering.

Ahead of the earnings report a few analysts weighed in on Urban Outfitters:

• Brean Capital has a Buy rating but lowered its price target to $37 from $46.
• Mizuho has a Neutral rating and lowered its target to $30 from $34.
• Sterne Agee CRT has a Neutral rating and raised its target to $36 from $34.
• Robert Baird had an Outperform rating and raised its target to $44 from $42.
• Nomura had a Neutral rating but raised its target to $35 from $30.

So far in 2015, Urban Outfitters has underperformed the market, with the stock down 30%. Over the past 52 weeks, the stock is only down 22%.

Shares of Urban Outfitters were trading down 9.6% at $22.12 Monday, with a consensus analyst price target of $37.32 and a 52-week trading range of $22.13 to $47.25.

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