Can Urban Outfitters Turn Itself Around With Q4 Results?

Urban Outfitters Inc. (NASDAQ: URBN | URBN Price Prediction) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Tuesday. The consensus estimates call for $0.79 in earnings per share (EPS) and $1.14 billion in revenue. The same period of last year reportedly had $0.62 in EPS and $1.09 billion in revenue.

In February, net sales for the three months ended January 31, 2019, increased 3.7% year over year to a record $1.13 billion. Comparable Retail segment net sales increased 3.0%, driven by double-digit growth in the digital channel, partially offset by negative retail store sales. By brand, comparable Retail segment net sales increased 4% at Free People, 4% at Urban Outfitters and 2% at the Anthropologie Group. Wholesale segment net sales increased 3%.

For the year, total net sales increased to $4.0 billion, or 9.3% over the prior year. Comparable Retail segment net sales increased 8.0%, driven by double-digit growth in the digital channel and positive retail store sales. Wholesale segment net sales increased 10%.

CEO Richard A. Hayne commented:

I’m pleased to report record fourth quarter revenues and the sixth consecutive quarter all brands delivered positive Retail segment ‘comps’. Positive ‘comps’ were driven by double-digit growth in digital channel revenues.

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Excluding Tuesday’s move, Urban Outfitters had underperformed the broad markets, with its stock down about 9% year to date. In the past 52 weeks, the stock was down 14%.

A few analysts weighed in on Urban Outfitters ahead of the report:

• B. Riley has a Buy rating with a $40 price target.
• Deutsche Bank has a Hold rating with a $33 price target.
• Telsey Advisory Group’s Market Perform rating comes with a $35 target.
• Jefferies has a Buy rating with a $58 price target.
• Wolfe Research has an Outperform rating and a $42 target.
• Morgan Stanley has an Overweight rating.

Shares of Urban Outfitters were last seen up about 1% at $30.61 on Tuesday, in a 52-week range of $29.84 to $52.50. The consensus price target is $39.38.

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