Is It Time To Short Urban Outfitters, Inc. (NYSE:URBN)?
Urban Outfitters, Inc. (URBN) Consumer Discretionary – Specialty Retail | Reports August 16, After Market Closes
Urban Outfitters, Inc. (URBN) 2Q Earnings – Key Takeaways
- The Estimize consensus is calling for earnings per share of 57 cents on $892.87 million in revenue, 1 cent higher than Wall Street on the bottom line and $3 million on the top
- Sales have been under pressure from the rising popularity of fast fashion trends and a shift towards online retailers
- Urban Outfitters remains committed to improving online sales, optimizing inventory management and adding new brands
- What are you expecting for URBN? Get your estimate in here!
Specialty retailers are in the spotlight this week headlined by reports from Urban Outfitters, American Eagle and Gap. Urban Outfitters has benefitted from the broader surge amongst teen retailers this year. The stock is up 35% year to date after a less than desirable 2015. The retailer has remained committed to boosting sales by expanding its direct to consumer business, optimizing inventory levels and adding new brands. Earnings have been slow to follow but this report is expected to make considerable progress versus previous quarters.
The Estimize consensus is calling for earnings per share of 57 cents, 8% higher than the same period last year. That estimate has been cut by 2% since Urban Outfitter’s most recent report in May. Revenue is anticipated to grow by 4% to $892.87 million, marking a second straight quarter of positive sales comparisons. Investors should expect to see some favorable activity next week. Typically the stock increases 1-2% in the month following a report.
Universal themes impacting the broader retail sector have also hurt Urban Outfitters. A shift in consumer spending habits towards fast fashion and online retailers have been especially concerning for sales. The company has of course been putting forth the effort to boost its online revenues. However, holding on to merchandise that is not resonating with customers has resulted in a glut of excess inventory.
Fortunately, the company still has a mostly solid financial position with reasonable debt levels and valuation. A strong comparable sales number coupled with robust guidance could be enough to send this stock even higher.
Do you think URBN can beat estimates? There is still time to get your estimate in here!