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Urban Outfitters Inc.

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Shares of Urban Outfitters have outpaced the industry in the past six months driven by top and bottom-line beat in the past three quarters. We are upbeat on the company’s performance based on its fourth-quarter fiscal 2018 sales results, which grew 5.7%. Its comparable retail segment net sales, including the comparable direct-to-consumer channel, gained 4%. Moreover, all the three brands registered comps growth during the quarter. We believe new store openings, increase digital penetration, merchandising improvements and international expansion bode well for the long term. Management is also making all possible efforts to enhance the performance of brands through store refurbishment and by bringing in more compelling assortments. However, management expects SG&A expense to increase during the first quarter of fiscal 2019 on account of higher digital marketing investments. Nevertheless, estimates have been trending up lately.


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