By Carly Forster

Urban Outfitters, Inc. (NASDAQ:URBN) is a Philadelphia, Pennsylvania based American specialty retail company that owns and operates over 400 locations around the world across five retail brands: Urban Outfitters, Anthropologie, Free People, Terrain, and BHLDN. The company released its first-quarter earnings report on Monday, May 19 and revealed that although Anthropologie and Free People excelled in performance, its biggest brand, Urban Outfitters, did not fare so well.

Urban Outfitters, Inc. (NASDAQ:URBN) saw a 25% net sales increase at Free People stores and an 8% gain at Anthropologie stores. However, Urban Outfitters stores saw comparable net sales fall 12%. Chief Executive Richard Hayne noted, “While Anthropologie and Free People continue to deliver record levels in sales and profits, Urban Outfitters had a disappointing quarter and is working diligently to regain its fashion footing.” In an effort to increase sales, the company is focusing on recapturing young adults between the ages of 18 to 28 through growth-driving new products in non-apparel categories including: food offerings, music, beauty, home, and living. Additionally, the company recently hired Trish Donnelly as President of the Urban Outfitters brand, who has an extensive merchandising background.

During its Q1 results, Urban Outfitters, Inc. (NASDAQ:URBN) reported $0.26 earnings per share, missing analysts’ consensus estimate of $0.27 by $0.01. During the same quarter last year, the company posted $0.32 earnings per share. The retailer had profits of $686.30 million for the quarter, compared to analysts’ consensus estimate of $680.61 million. The company’s quarterly proceeds were up 5.9% on a year-over-year basis. On average, analysts predict that Urban Outfitters will post $2.02 earnings per share for the current fiscal year.

Shares of Urban Outfitters, Inc. (NASDAQ:URBN) opened at $34.46 on Tuesday, May 20. The company has a 1-year high of $44.15 and a 1-year low of $32.83. The stock’s daily moving average is $33.82 and has a 50-day moving average of $36.29. The market cap for Urban Outfitters, Inc. is $4.54 billion and its P/E ratio is 17.98.

Urban Outfitters

On May 21, Seeking Alpha blogger, The Value Investor, spoke positively about Urban Outfitters, Inc. (NASDAQ:URBN) saying, “I do find the company’s long term growth trajectory attractive. After a decent sell-off shares might just create a long term favorable entry opportunity, despite the short term volatility.” The Value Investor has a +8.9% average return and a 61% success rate according to TipRanks.

On May 20, Stifel Nicolaus analyst Richard Jaffe was also positive about the stock and maintained a BUY rating with a $44 price target. He believes the company’s new president, Trish Donnelly, “will help to insure that the merchandise assortments at the Urban brand are appropriate and on trend for the brand’s target customer, young adults. [He is] hopeful that this brand can be back on track by the important back to school selling season in July.” Jaffe has a +6.1% average return and a 53% success rate.

On the other hand, on May 15 FBR Capital analyst Susan Anderson downgraded Urban Outfitters to a Market Perform rating. She thinks “the stock will trade sideways in 2014 driven by continued UO weakness and the potential for Anthro/FP to slow with tougher compares in 2H14.” Anderson has a -0.5% average return and a 50% success rate.

Urban Outfitters

Urban Outfitters, Inc. (NASDAQ:URBN) currently has an analyst consensus of MODERATE BUY.

Carly Forster writes about stock market news. She can be reached at [email protected]