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Here's How 2022 Unfolds for Urban Outfitters (URBN) Stock
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Urban Outfitters, Inc. (URBN - Free Report) is on track to deliver growth this year, thanks to its robust business strategies and sound fundamentals. URBN is constantly strengthening its direct-to-consumer business, enhancing productivity across the existing channels, expanding product assortments and optimizing inventory level. Its strategic growth initiative FP Movement and store-growth endeavors are yielding results.
Driven by the aforementioned catalysts, shares of this Philadelphia, PA-based player have increased 16.8% against its industry’s 11.6% fall in a year. In addition, the Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales suggests growth of 4.6% from the year-ago reported figure.
More on Strategies
Urban Outfitters’ FP Movement and AnthroLiving initiatives also hold promise. Speaking about the FP Movement, management believes that this initiative will lure a wider base of customers to its Free People brand. Having a differentiated position in the fitness and wellness space, the FP Movement offers a major growth opportunity and is expected to boost Free People’s brand revenues. Apparently, Free People brand’s net sales were up 29% during the third quarter of fiscal 2022 from the third-quarter fiscal 2020 level.
AnthroLiving is on track to generate roughly $150 million revenues in the current fiscal year. Management believes that AnthroLiving has an opportunity to become at least a $1-billion business with the size of Anthro's apparel business.
Being a multi-brand and multi-channel retailer, Urban Outfitters boasts a flexible merchandising strategy. URBN has also been making strategic agreements for a while to enhance its assortments. URBN had earlier teamed up with Hims & Hers Health, Inc., which operates as a multi-specialty telehealth platform and enables it to provide personalized wellness offerings.
Management also remains optimistic about Urban Outfitters’ subscription rental service for women’s clothes known as Nuuly, which comprises the Nuuly Rent and Nuuly Thrift brands.
In addition, URBN has been witnessing continued strength across its digital channel for a while. During the fiscal third quarter, Urban Outfitters’ digital channel continued to reflect strength, recording mid-double digit sales in North America and higher gains in Europe. Overall, the digital performance was buoyed by increased sessions and higher conversions.
What Else?
Despite the aforesaid strengths, Urban Outfitters is not immune to the pandemic-led crisis, including supply-chain headwinds and inflationary pressures from freight, raw materials and wages. Also, URBN is battling higher SG&A expenses due to escalated digital marketing expenses.
On a positive note, management has been making strategic moves to maneuver this tough operating landscape for a while. We expect Urban Outfitters to continue its solid run on the bourses, given the growth strategies discussed above. URBN has a Zacks Rank #3 (Hold) at present.
An expected long-term earnings growth rate of 18% coupled with a VGM Score of A further speaks of its inherent potential.
The Zacks Consensus Estimate for Zumiez’s fiscal 2022 sales suggests growth of 1.1% from the year-ago reading. ZUMZ has a significant trailing four-quarter earnings surprise, on average.
Costco, a general merchandise retailer, has a Zacks Rank #2 (Buy) at present. Shares of COST have jumped 51.2% in the past year.
The Zacks Consensus Estimate for Costco’s fiscal 2022 sales and earnings per share (EPS) suggests growth of 7.6% and 9.5%, respectively, from the year-ago corresponding figures. COST has a trailing four-quarter earnings surprise of 8.3%, on average.
Target, a renowned omni-channel retailer, presently carries a Zacks Rank of 2. TGT has a trailing four-quarter earnings surprise of 19.7%, on average. The stock has rallied 28.7% in the past year.
The Zacks Consensus Estimate for Target’s fiscal 2022 sales and EPS suggests growth of 2.3% and 0.1%, respectively, from the corresponding year-ago levels. TGT has an expected EPS growth rate of 14.4% for three-five years.
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Here's How 2022 Unfolds for Urban Outfitters (URBN) Stock
Urban Outfitters, Inc. (URBN - Free Report) is on track to deliver growth this year, thanks to its robust business strategies and sound fundamentals. URBN is constantly strengthening its direct-to-consumer business, enhancing productivity across the existing channels, expanding product assortments and optimizing inventory level. Its strategic growth initiative FP Movement and store-growth endeavors are yielding results.
Driven by the aforementioned catalysts, shares of this Philadelphia, PA-based player have increased 16.8% against its industry’s 11.6% fall in a year. In addition, the Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales suggests growth of 4.6% from the year-ago reported figure.
More on Strategies
Urban Outfitters’ FP Movement and AnthroLiving initiatives also hold promise. Speaking about the FP Movement, management believes that this initiative will lure a wider base of customers to its Free People brand. Having a differentiated position in the fitness and wellness space, the FP Movement offers a major growth opportunity and is expected to boost Free People’s brand revenues. Apparently, Free People brand’s net sales were up 29% during the third quarter of fiscal 2022 from the third-quarter fiscal 2020 level.
AnthroLiving is on track to generate roughly $150 million revenues in the current fiscal year. Management believes that AnthroLiving has an opportunity to become at least a $1-billion business with the size of Anthro's apparel business.
Being a multi-brand and multi-channel retailer, Urban Outfitters boasts a flexible merchandising strategy. URBN has also been making strategic agreements for a while to enhance its assortments. URBN had earlier teamed up with Hims & Hers Health, Inc., which operates as a multi-specialty telehealth platform and enables it to provide personalized wellness offerings.
Management also remains optimistic about Urban Outfitters’ subscription rental service for women’s clothes known as Nuuly, which comprises the Nuuly Rent and Nuuly Thrift brands.
In addition, URBN has been witnessing continued strength across its digital channel for a while. During the fiscal third quarter, Urban Outfitters’ digital channel continued to reflect strength, recording mid-double digit sales in North America and higher gains in Europe. Overall, the digital performance was buoyed by increased sessions and higher conversions.
What Else?
Despite the aforesaid strengths, Urban Outfitters is not immune to the pandemic-led crisis, including supply-chain headwinds and inflationary pressures from freight, raw materials and wages. Also, URBN is battling higher SG&A expenses due to escalated digital marketing expenses.
On a positive note, management has been making strategic moves to maneuver this tough operating landscape for a while. We expect Urban Outfitters to continue its solid run on the bourses, given the growth strategies discussed above. URBN has a Zacks Rank #3 (Hold) at present.
An expected long-term earnings growth rate of 18% coupled with a VGM Score of A further speaks of its inherent potential.
Key Picks in Retail
Some better-ranked stocks are Zumiez (ZUMZ - Free Report) , Costco (COST - Free Report) and Target (TGT - Free Report) .
Zumiez, a global lifestyle retailer, currently flaunts a Zacks Rank #1 (Strong Buy). Shares of ZUMZ have surged 30.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zumiez’s fiscal 2022 sales suggests growth of 1.1% from the year-ago reading. ZUMZ has a significant trailing four-quarter earnings surprise, on average.
Costco, a general merchandise retailer, has a Zacks Rank #2 (Buy) at present. Shares of COST have jumped 51.2% in the past year.
The Zacks Consensus Estimate for Costco’s fiscal 2022 sales and earnings per share (EPS) suggests growth of 7.6% and 9.5%, respectively, from the year-ago corresponding figures. COST has a trailing four-quarter earnings surprise of 8.3%, on average.
Target, a renowned omni-channel retailer, presently carries a Zacks Rank of 2. TGT has a trailing four-quarter earnings surprise of 19.7%, on average. The stock has rallied 28.7% in the past year.
The Zacks Consensus Estimate for Target’s fiscal 2022 sales and EPS suggests growth of 2.3% and 0.1%, respectively, from the corresponding year-ago levels. TGT has an expected EPS growth rate of 14.4% for three-five years.