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Urban Outfitters, Inc. (URBN - Free Report) remains committed to driving overall growth, thanks to its robust business strategies and sound fundamentals. Management has been strengthening its direct-to-consumer business, enhancing productivity across the existing channels, and optimizing inventory levels.
URBN’s strategic growth initiative FP Movement and store-growth endeavors are also impressive. Markedly, shares of this Philadelphia, PA-based player have gained 26.7% outperforming its industry’s 2.7% rise over the past six months.
Let’s delve deeper.
Strategic Discussion
Being a multi-brand and multi-channel retailer, Urban Outfitters offers a flexible merchandising strategy. The company also has a significant domestic and international presence with rapidly expanding e-commerce activities. In addition, the company’s FP Movement and AnthroLiving initiatives hold promise. Management had earlier said that AnthroLiving has the potential to become at least a $1-billion business with the size of Anthro's apparel business.
Regarding the FP Movement, management believes that this initiative will lure a wider customer base 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.
Image Source: Zacks Investment Research
The FP Movement brand witnessed an outstanding fiscal third quarter, generating 28% retail segment growth. The new and existing FP Movement stores continue to outperform expectations in the reported quarter. We note that the early holiday trends were positive for the Free People Group, and management believes the brand's Retail segment performance in the fiscal fourth quarter to be similar to the fiscal third quarter.
In addition, management remains optimistic about the prospects of Nuuly. Nuuly comprises the Nuuly Rent and Nuuly Thrift brands. During the fiscal third quarter, Nuuly contributed $35.3 million to net sales, reflecting an increase from $12.7 million recorded in the earlier fiscal year’s comparable period, backed by a sharp rise in subscribers.
On a quarter-over-quarter basis, active subscribers increased 37%, outpacing the 100,000 sub milestone in early October. Currently, the number of active subscribers is in excess of 120,000. This is likely to keep fueling the company’s overall sales.
What Else?
Urban Outfitters reported third-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate and grew from the year-ago fiscal quarter’s tally. Net sales for the three months ending Oct 31, fiscal 2023, rose 3.9% from the same-period level of fiscal 2022 to $1,175.3 million.
Brandwise, net sales were up 12.2% from the comparable period’s level in fiscal 2022 to $484.2 million at Anthropologie Group and 5.9% to $280.7 million at Free People. Nuuly contributed $35.3 million to net sales, reflecting an increase from $12.7 million recorded in the earlier fiscal year’s comparable period. Menus & Venues’ net sales amounted to $7.7 million, up 18.5% from the level recorded in the prior fiscal year’s corresponding period.
Segment-wise, net sales at the Retail unit rose 2.3% to $1,067.5 million. We note that the comparable Retail segment’s net sales grew 4% from the same-period level of fiscal 2022, driven by mid-single-digit positive digital channel sales and low single-digit positive retail store sales. By brand, the comparable Retail segment’s net sales jumped 8% at the Free People Group and 13% at the Anthropologie Group.
Based on the sales expectations, management anticipates the company’s Retail segment comp sales to come in low single-digit positive for the fiscal fourth quarter. Growth in the Retail and Nuuly segments is likely to be somewhat offset by reduced sales in the Wholesale segment.
In addition, analysts are looking optimistic about this Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for Urban Outfitters’ earnings per share currently stood at $1.74 for fiscal 2023 and $2.23 for fiscal 2024, mirroring growth of 3% and 8.3%, respectively, over the past 30 days. The consensus mark for current financial-year sales suggests growth of 4.8% from the year-ago fiscal period’s reported figure. An expected long-term earnings growth rate of 18% coupled with a Value Score of A further speaks volumes.
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Wingstop, which franchises and operates restaurants, currently holds a Zacks Rank of 2. The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.5% and 23%, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
Capri Holdings, a global fashion luxury group of iconic brands like Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and earnings per share suggests growth of 0.9% and 10.5%, respectively, from the corresponding year-ago tallies. CPRI has a trailing four-quarter earnings surprise of 21%, on average.
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Here's Why Urban Outfitters (URBN) Stock Looks Promising
Urban Outfitters, Inc. (URBN - Free Report) remains committed to driving overall growth, thanks to its robust business strategies and sound fundamentals. Management has been strengthening its direct-to-consumer business, enhancing productivity across the existing channels, and optimizing inventory levels.
URBN’s strategic growth initiative FP Movement and store-growth endeavors are also impressive. Markedly, shares of this Philadelphia, PA-based player have gained 26.7% outperforming its industry’s 2.7% rise over the past six months.
Let’s delve deeper.
Strategic Discussion
Being a multi-brand and multi-channel retailer, Urban Outfitters offers a flexible merchandising strategy. The company also has a significant domestic and international presence with rapidly expanding e-commerce activities. In addition, the company’s FP Movement and AnthroLiving initiatives hold promise. Management had earlier said that AnthroLiving has the potential to become at least a $1-billion business with the size of Anthro's apparel business.
Regarding the FP Movement, management believes that this initiative will lure a wider customer base 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.
Image Source: Zacks Investment Research
The FP Movement brand witnessed an outstanding fiscal third quarter, generating 28% retail segment growth. The new and existing FP Movement stores continue to outperform expectations in the reported quarter. We note that the early holiday trends were positive for the Free People Group, and management believes the brand's Retail segment performance in the fiscal fourth quarter to be similar to the fiscal third quarter.
In addition, management remains optimistic about the prospects of Nuuly. Nuuly comprises the Nuuly Rent and Nuuly Thrift brands. During the fiscal third quarter, Nuuly contributed $35.3 million to net sales, reflecting an increase from $12.7 million recorded in the earlier fiscal year’s comparable period, backed by a sharp rise in subscribers.
On a quarter-over-quarter basis, active subscribers increased 37%, outpacing the 100,000 sub milestone in early October. Currently, the number of active subscribers is in excess of 120,000. This is likely to keep fueling the company’s overall sales.
What Else?
Urban Outfitters reported third-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate and grew from the year-ago fiscal quarter’s tally. Net sales for the three months ending Oct 31, fiscal 2023, rose 3.9% from the same-period level of fiscal 2022 to $1,175.3 million.
Brandwise, net sales were up 12.2% from the comparable period’s level in fiscal 2022 to $484.2 million at Anthropologie Group and 5.9% to $280.7 million at Free People. Nuuly contributed $35.3 million to net sales, reflecting an increase from $12.7 million recorded in the earlier fiscal year’s comparable period. Menus & Venues’ net sales amounted to $7.7 million, up 18.5% from the level recorded in the prior fiscal year’s corresponding period.
Segment-wise, net sales at the Retail unit rose 2.3% to $1,067.5 million. We note that the comparable Retail segment’s net sales grew 4% from the same-period level of fiscal 2022, driven by mid-single-digit positive digital channel sales and low single-digit positive retail store sales. By brand, the comparable Retail segment’s net sales jumped 8% at the Free People Group and 13% at the Anthropologie Group.
Based on the sales expectations, management anticipates the company’s Retail segment comp sales to come in low single-digit positive for the fiscal fourth quarter. Growth in the Retail and Nuuly segments is likely to be somewhat offset by reduced sales in the Wholesale segment.
In addition, analysts are looking optimistic about this Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for Urban Outfitters’ earnings per share currently stood at $1.74 for fiscal 2023 and $2.23 for fiscal 2024, mirroring growth of 3% and 8.3%, respectively, over the past 30 days. The consensus mark for current financial-year sales suggests growth of 4.8% from the year-ago fiscal period’s reported figure. An expected long-term earnings growth rate of 18% coupled with a Value Score of A further speaks volumes.
Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Wingstop (WING - Free Report) and Capri Holdings (CPRI - Free Report) .
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Wingstop, which franchises and operates restaurants, currently holds a Zacks Rank of 2. The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.5% and 23%, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
Capri Holdings, a global fashion luxury group of iconic brands like Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and earnings per share suggests growth of 0.9% and 10.5%, respectively, from the corresponding year-ago tallies. CPRI has a trailing four-quarter earnings surprise of 21%, on average.