We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Urban Outfitters (URBN) Down 9.2% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Urban Outfitters (URBN - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Urban Outfitters due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Urban Outfitters Q4 Earnings Miss Estimates
Urban Outfitters reported fourth-quarter fiscal 2022 results, wherein the bottom line missed the Zacks Consensus Estimate. Inflationary pressures from inbound freight, delivery expenses, raw materials and wages hurt the overall profits in the reported quarter. Also, the ongoing supply-chain headwinds and higher transportation expenses were deterrents. Nonetheless, both metrics improved on a year-over-year basis.
Deeper Insight
pecialty retailer delivered earnings per share of 41 cents, lagging the Zacks Consensus Estimate of 49 cents. The bottom line increased 41.4% from 29 cents recorded in the comparable quarter of the year-ago fiscal and 105% from 20 cents earned in the quarter ended Jan 31, fiscal 2020.
Net sales for the three months ended Jan 31, fiscal 2022, rose 13.9% from the same-period level of fiscal 2020 to $1,332.2 million. The metric also rose 22.4% from the last fiscal year’s reading. The Zacks Consensus Estimate for quarterly sales is pegged at $1,332 million.
We note that the comparable Retail segment’s net sales grew 14% from the same-period level of fiscal 2020 on a robust double-digit rise in digital channel sales. Growth was partly offset by a low double-digit negative retail store sales due to lower store traffic. Each brand recorded positive retail segment comps, led again by the Free People Group brand, which delivered mid double-digit comps.
By brand, the comparable Retail segment’s net sales jumped 49% at the Free People Group, 14% at the Anthropologie Group and 3% at Urban Outfitters. While net sales at the Retail segment improved 15% from the comparable period’s level in fiscal 2020, the metric at the Wholesale unit plunged 22%, mainly due to lower Free People Group’s sales to promotional wholesale customers.
An Insight Into Margins
In the quarter under review, gross profit climbed 5.4% from the same-quarter level of fiscal 2020 to $367.3 million. However, adjusted gross margin contracted 222 basis points (bps) to 27.6%.
Selling, general and administrative expenses shot up 11.6% from the fourth-quarter fiscal 2020 level to $314 million. Urban Outfitters recorded an operating income of $53.3 million, down 20.6% from the fourth-quarter fiscal 2019 level. As a rate of sales, the operating margin decreased 170 bps from the level registered in the quarter ended Jan 31, fiscal 2020, to 4%.
Other Financial Details
Urban Outfitters ended the quarter with cash and cash equivalents of $206.6 million and total shareholders’ equity of $1,745.7 million. As of Jan 31, 2022, total inventory increased 39.1% from the fourth-quarter fiscal 2020 level to $569.7 million. URBN generated net cash of $359.3 million from operating activities during fiscal 2022. For fiscal 2023, management projects capital expenditures of nearly $225 million.
Urban Outfitters repurchased and subsequently retired 2 million shares for nearly $56 million during fiscal 2022. It bought back and subsequently retired 0.5 million shares for roughly $7 million in fiscal 2021. As of Jan 31, 2022, URBN had 23.9 million shares remaining under its share repurchase programs.
Outlook
Management is impressed with solid consumer demand, which is likely to continue throughout the first quarter of fiscal 2023. URBN’s first quarter-to-date comp sales rate is above the fourth-quarter rate.
Urban Outfitters now expects first-quarter sales to increase mid-teens from the fiscal 2020 actuals. Retail segment sales are expected to come in the mid-to-high teens’ range, while the Wholesale segment sales might be approximately flat.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Urban Outfitters has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Urban Outfitters has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Urban Outfitters (URBN) Down 9.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Urban Outfitters (URBN - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Urban Outfitters due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Urban Outfitters Q4 Earnings Miss Estimates
Urban Outfitters reported fourth-quarter fiscal 2022 results, wherein the bottom line missed the Zacks Consensus Estimate. Inflationary pressures from inbound freight, delivery expenses, raw materials and wages hurt the overall profits in the reported quarter. Also, the ongoing supply-chain headwinds and higher transportation expenses were deterrents. Nonetheless, both metrics improved on a year-over-year basis.
Deeper Insight
pecialty retailer delivered earnings per share of 41 cents, lagging the Zacks Consensus Estimate of 49 cents. The bottom line increased 41.4% from 29 cents recorded in the comparable quarter of the year-ago fiscal and 105% from 20 cents earned in the quarter ended Jan 31, fiscal 2020.
Net sales for the three months ended Jan 31, fiscal 2022, rose 13.9% from the same-period level of fiscal 2020 to $1,332.2 million. The metric also rose 22.4% from the last fiscal year’s reading. The Zacks Consensus Estimate for quarterly sales is pegged at $1,332 million.
We note that the comparable Retail segment’s net sales grew 14% from the same-period level of fiscal 2020 on a robust double-digit rise in digital channel sales. Growth was partly offset by a low double-digit negative retail store sales due to lower store traffic. Each brand recorded positive retail segment comps, led again by the Free People Group brand, which delivered mid double-digit comps.
By brand, the comparable Retail segment’s net sales jumped 49% at the Free People Group, 14% at the Anthropologie Group and 3% at Urban Outfitters. While net sales at the Retail segment improved 15% from the comparable period’s level in fiscal 2020, the metric at the Wholesale unit plunged 22%, mainly due to lower Free People Group’s sales to promotional wholesale customers.
An Insight Into Margins
In the quarter under review, gross profit climbed 5.4% from the same-quarter level of fiscal 2020 to $367.3 million. However, adjusted gross margin contracted 222 basis points (bps) to 27.6%.
Selling, general and administrative expenses shot up 11.6% from the fourth-quarter fiscal 2020 level to $314 million. Urban Outfitters recorded an operating income of $53.3 million, down 20.6% from the fourth-quarter fiscal 2019 level. As a rate of sales, the operating margin decreased 170 bps from the level registered in the quarter ended Jan 31, fiscal 2020, to 4%.
Other Financial Details
Urban Outfitters ended the quarter with cash and cash equivalents of $206.6 million and total shareholders’ equity of $1,745.7 million. As of Jan 31, 2022, total inventory increased 39.1% from the fourth-quarter fiscal 2020 level to $569.7 million. URBN generated net cash of $359.3 million from operating activities during fiscal 2022. For fiscal 2023, management projects capital expenditures of nearly $225 million.
Urban Outfitters repurchased and subsequently retired 2 million shares for nearly $56 million during fiscal 2022. It bought back and subsequently retired 0.5 million shares for roughly $7 million in fiscal 2021. As of Jan 31, 2022, URBN had 23.9 million shares remaining under its share repurchase programs.
Outlook
Management is impressed with solid consumer demand, which is likely to continue throughout the first quarter of fiscal 2023. URBN’s first quarter-to-date comp sales rate is above the fourth-quarter rate.
Urban Outfitters now expects first-quarter sales to increase mid-teens from the fiscal 2020 actuals. Retail segment sales are expected to come in the mid-to-high teens’ range, while the Wholesale segment sales might be approximately flat.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Urban Outfitters has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Urban Outfitters has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.