Urban Outfitters (URBN) Soars on Earnings Beat, Price Target Increases

Urban Outfitters NY 14th

The shares of Urban Outfitters (NASDAQ: URBN) surged today after the apparel retailer reported quarterly earnings that exceeded the expectations of Wall Street analysts.

The stock price of Urban Outfitters increased more than 16% to $32.69 per share. The company gained more than 43% in stock value year-to-date.

Urban Outfitters financial results

Yesterday, Urban Outfitters reported net income of $73 million or $0.61 in earnings per diluted share for the fourth quarter ended January 31, 2016.  Wall Street analysts expected the apparel retailer to report earnings of $0.56 per share.

According to the company, its total quarterly net sales were $1.01 billion including $415 million for Urban Outfitters brand, $419.09 million for Anthropologie brand and $178.48 million for Free People brand.

Urban Outfitter CEO Richard A. Hayne said, “While apparel sales underperformed during the fourth quarter, I am pleased with the merchandise margin improvement delivered by the brands. Additionally, our expansion categories performed above our expectations and continue to give us confidence in our future growth opportunities,”

Analysts increase price target on Urban Outfitters

Several analysts covering the shares of Urban Outfitters increased their price target based on the fact that the company well managed the costs and improvement of the Anthropologie brand.

In a research note to investors, Baird analyst Mark Altschwager wrote, “We’re encouraged by several gross margin tailwinds, tighter cost management, and early signs of improvement at Anthropologie.” He increased his price target on the company’s stock from $29 to $35 per share.

Analysts at Guggenheim Securities and Jefferies were the most bullish as they raised their price target on URBN to $38 per share. BB&T Capital Markets analysts upgraded their price target on the stock to $36 per share while Piper Jaffray and Brean Capital to $35 per share.

FBR analyst Susan Anderson told Benzinga the quarterly financial performance of Urban Outfitters was “positive for specialty retail.” She added, “The trend this earnings season seems to be that spec retailers are doing a little bit better than expected QTD, likely driven by very favorable weather and easy compares to LY. So URBN is no outlier.”

On the other hand, MKM Partners analyst Roxanne Meyer commented that the company’s financial results showed “hints of Optimism and several tailwinds into 2016.” However, she remains in the “wait-and-see mode” due to the higher promotional activity early last month. She has a $31 per share price target on the stock.

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Marivic Cabural Summers
Marie holds a Bachelors Degree in Mass Communication. She has an extensive experience in Journalism. Marie started in the industry in high school and her forte is news and editorial writing. She previously worked as a news writer and radio program producer at Nation Broadcasting Corporation (NBC) in the Philippines. She has also experience in advertising, events management, and marketing. She was a former Young Ambassador of Goodwill to the 26th Ship for Southeast Asian Youth Program (SSEAYP). She also writes for ICANNWiki, ValueWalk, and the The Motley Fool Blog Network. You can contact Marie [email protected]