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Urban Outfitters (URBN) Stock Jumps 10%: Will It Continue to Soar?

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Urban Outfitters (URBN - Free Report) shares ended the last trading session 10% higher at $38.47. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7% loss over the past four weeks.

Shares of Urban Outfitters got a boost following the company’s sturdy first-quarter fiscal 2022 results. Both the top and the bottom line outshone the Zacks Consensus Estimate and also improved on a year-over-year basis. We note that sales across the company’s all brands grew year over year in the quarter. Also, it witnessed consistent strength in the digital channel.

The company delivered earnings per share of $0.54 that not only beat the Zacks Consensus Estimate of $0.16 but also rebounded from the year-ago quarter’s loss of $1.41. Moreover, the bottom line improved 74.2% from $0.31 per share reported in the quarter ended Apr 30, 2019.

In the reported quarter, net sales of $927.4 million soared 57.6% year over year and also surpassed the Zacks Consensus Estimate of $898 million. Also, the metric grew 7.3% from the figure reported in the quarter ended Apr 30, 2019. Brandwise, net sales were up 47.4% year over year at Urban Outfitters, 51% at Anthropologie Group and 97.6% at Free People.

Going forward, management expects the fiscal second quarter to continue witnessing a steady sales improvement from the fiscal 2020 reading. It believes that retail segment comp sales will grow in the mid-teens range, driving the overall company sales to the low double-digit range.

Price and Consensus

Price Consensus Chart for URBN

This clothing and accessories retailer is expected to post quarterly earnings of $0.50 per share in its upcoming report, which represents a year-over-year change of +42.9%. Revenues are expected to be $1.01 billion, up 25.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Urban Outfitters, the consensus EPS estimate for the quarter has been revised 0.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on URBN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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