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Bull of the Day: Urban Outfitters (URBN)

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Key Takeaways

  • URBN's near-term EPS outlook remains bright.
  • Strong quarterly results have shown consistent growth.
  • Sales and earnings expectations remain highly positive for both the current and next fiscal years.

Urban Outfitters (URBN - Free Report) is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands.

The stock sports a Zacks Rank #1 (Strong Buy) thanks to favorable EPS revisions, with the positivity shown below.

Zacks Investment Research
Image Source: Zacks Investment Research

The stock is also a part of the Zacks Retail – Apparel and Shoes industry, which is currently ranked in the top 31% (76 out of 247) of all Zacks industries.

Urban Outfitters

Urban Outfitters has continued to be a stellar earnings performer over the past year or so, exceeding the Zacks Consensus EPS estimate by an average of 12% across its last four releases. URBN beat the estimate by 16% in its latest print, with sales also coming in nearly 2% ahead of the Zacks Consensus Sales estimate.

Sales grew by 11% YoY in the above-mentioned period, with adjusted EPS seeing a similarly strong 12% climb from the year-ago period. Top line growth has remained on a steady, somewhat predictable uptrend over the past three years, with the recent 11% YoY growth rate reflecting an acceleration relative to the past.

Zacks Investment Research
Image Source: Zacks Investment Research

The $1.5 billion in sales marked a Q1 record for Urban Outfitters, with earnings of $1.30 also a record for the period. Driving the positivity was strong, comparable retail sales growth of 5.6% YoY. 

The growth outlook for its current and next fiscal year remains highly positive given its retail-focused nature, with sales forecasted to climb 9% in its current FY27 and 7% in FY28. Earnings growth is also rock-solid, with EPS estimates suggesting 13% growth in FY27 and 10% in FY28.

Zacks Investment Research
Image Source: Zacks Investment Research

The valuation picture also remains more than fair, with the current 10.9X forward 12-month earnings multiple comparing favorably to an 11.3X five-year median and 16.6X five-year highs. The stock sports a Style Score of ‘B’ for Value.

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Urban Outfitters (URBN - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy). 

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