Retailer Also Using Industry-Leading Sterling Commerce Managed File Transfer Software to Enhance Customer Relationship Management Implementation

Many clothing retailers are just monkeying around; this one's doing the job right.

With great hipness must come great responsibility -- especially in making acquisitions.

Since listing five reasons to sell Abercrombie & Fitch (ANF) back in August the retail stock has risen another 32%. Year to date the stock is up over 75%. And what really takes the cake is Goldman Sachs (GS) and Credit Suisse (CS) both upgraded Abercrombie earlier this month. I’m far from ashamed of my recommendation. Abercrombie is a teeny-bopping train wreck. Posting third-quarter results that were once again much worse than its peers Abercrombie has problems unrelated to the recession. The downturn has just exasperated it. And I want to reiterate my extreme bearishness toward the retailer. Abercrombie ...

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These disruptive developments could determine the market's future.

Urban Outfitters, Inc. (URBN) has added 25 new stores in 2009 and intends to open 32 to 34 new stores for the full year as its growth plans remain intact despite the difficult economic environment. If retail has been struggling, you couldn’t tell from Urban Outfitters third quarter results. The company reported on Nov 12 that [...]

(URBN) Urban Outfitters Inc – Consensus Estimates Continue to Rise

Urban Outfitters, Inc. (URBN) has added 25 new stores in 2009 and intends to open 32 to 34 new stores for the full year as its growth plans remain intact despite the difficult economic environment.

If retail has been struggling, you couldn't tell from Urban Outfitters third quarter results. The company reported on Nov 12 that it saw record earnings for the quarter ending Oct 31, 2009. Earnings per share were 36 cents, or 1 cent better than the Zacks Consensus Estimate. Net sales rose 6% over the year ago period to $506 million.

Comparable store sales rose at all three of its segments. Anthropologie climbed 3%, Free People increased 13% and Urban Outfitters grew 5%. The Wholesale segment net sales declined 10% while direct-to-consumer net sales rose 21%.

Urban Outfitters has successfully been cutting inventories which has boosted the bottom line. Inventories decreased by 8%, or $18 million, compared to a year ago. Comparable store inventories declined by 15%. The company believes this will leave them well positioned for the holiday season.

Zacks Consensus Estimates Rise

Analysts are still revising their estimates after the earnings results, but estimates are already jumping. The fourth quarter Zacks Consensus Estimate is up a penny to 37 cents in the last 7 days. Similarly, full year estimates are also up a penny to $1.18 per share in the same time period.

Analysts are bullish about fiscal 2010, expecting earnings to grow 23.73%.

Read the Sep 30 article.

The 2-Year Chart

Urban Outfitters is a Zacks #2 Rank (buy) stock. After the solid earnings results, the stock hit new 52-week highs. You can see the big bounce off the Nov 2008 and then the March lows in the 2-year chart below.

Update to Previous Aggressive Growth Zacks Rank Buy Stocks

Lumber Liquidators, Inc. (LL) expects to open an additional 34 to 36 stores in 2009 despite the challenging retail environment. Analysts expect year over year earnings growth in 2009 of 15.37%. Read the full article.

Starbucks Corporation (SBUX) has been in a turnaround mode the last few quarters. Last week it posted its third earnings surprise in a row. Its turnaround strategy appears to be paying off for shareholders as the stock is now trading at new 52-week highs. Read the full article.

Jo-Ann Stores Inc. (JAS) is hiring for the holidays and saw a jump in third quarter same-store sales. Analysts expect earnings per share growth in 2010 of 170.26%. Even with the massive growth, the company is trading with a PEG ratio of just 0.99. Read the full article.

Priceline.com Inc. (PCLN) recently reported third quarter results that beat big for the fourth consecutive quarter. Analysts expect earnings growth of 35.34% in 2009. Read the full article.

Zacks Investment Research

BloggingStocks: On the heels of last week's better-than-expected earnings results from retailers Abercrombie & Fitch Co. (ANF), Kohl's Corp. (KSS), Macy's Inc. (M), Urban Outfitters Inc. (URBN) and Wal-Mart Stores Inc. (WMT) -- as well as disappointing numbers from ... Read more

Urban Outfitters Inc. (URBN) reported fiscal third quarter results on Thursday. The company posted earnings of $62.4 million, a growth of 5.3% from $59.3 million recorded in the year-ago quarter. Earnings per share came in at 36 cents, which edged past the Zacks Consensus Estimate of 35 cents derived from 28 covering analysts. The company reported [...]

(URBN) Urban Outfitters Beats Consensus Expectations by a Penny

Urban Outfitters Inc. (URBN) reported fiscal third quarter results on Thursday. The company posted earnings of $62.4 million, a growth of 5.3% from $59.3 million recorded in the year-ago quarter. Earnings per share came in at 36 cents, which edged past the Zacks Consensus Estimate of 35 cents derived from 28 covering analysts.
 
The company reported a 5.8% increase in net sales to $505.9 million during the quarter, compared to $478 million in the year-ago period. The expansion was primarily driven by a 2% growth in same-store sales coupled with the addition of 25 new stores in the first nine months of this fiscal. In terms of divisions, same-store sales grew by 3% in Anthropologie stores, while it reduced by 13% in Free People stores and by 5% in Urban Outfitters stores.
 
Urban Outfitters’ gross profit rose by 7.5% year over year to $210.1 million, while gross margin increased by 60 basis points (bps) to 41.5%. The increase was primarily the result of higher initial margins, which more than offset the impact of increased merchandise markdowns to clear seasonal products.
 
Selling, general and administrative expenses rose 8.9% year over year to $114.3 million, while as a percentage of sales, it rose 60 bps to 22.6%. The increase was primarily the result of the deleveraging impact of fixed expenses on lower same-store sales in Free People and Urban Outfitters stores coupled with an increase in incentive-based bonus. Accordingly, Urban Outfitters recorded an operating income of $95.8 million during the quarter, compared to $90.4 million in the year-ago quarter, while operating margin remained flat at 18.9%.
 
The company ended the quarter with cash and cash equivalents of $202.3 million, compared to $71.7 million in the year-ago period. Urban Outfitters’ efforts to optimize merchandise levels in accordance with sales trends led a 7% year-over-year reduction in inventories to $234.5 million.
 
Looking ahead, the company expects to open 32 to 34 new stores during full fiscal 2010, while in the next year Urban Outfitters’ plans to open 15 to 20 stores each under its namesake, Anthropologie and Free People brands. Meanwhile, the Zacks Consensus Estimate on the company’s earnings for the year ending January 2010 is currently pegged at $1.18 per share, which has moved up a penny in just the past week as 8 of 27 covering analysts raised expectations. The most accurate estimate is slightly more bullish at $1.19 per share.
Read the full analyst report on "URBN"
Zacks Investment Research

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