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Urban Outfitters, Inc. (URBN - Free Report) seems a promising bet, thanks to its solid 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 22.7% outperforming its industry’s 15.1% rise over the past six months.
Let’s Delve Deep
Management has been making investments in the FP Movement with digital and creative brand prospects. It believes that the FP Movement will lure a wider base of customers to the 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, net sales were up 10.9% at Free People in the fourth quarter of fiscal 2023. Also, the comparable Retail segment’s net sales jumped 15% at the Free People Group in the same quarter.
Image Source: Zacks Investment Research
During the fiscal fourth quarter, the FP Movement brand witnessed an outstanding quarter, generating 38% retail segment growth. The new and existing FP Movement stores continue to outperform expectations in the reported quarter.
We note that the brand saw double-digit increases in all the key categories. Early customer response to the brand’s spring trends has been sturdy and management expects the brand's retail segment performance to be positive in the first quarter of fiscal 2024.
In addition, management remains optimistic about the prospects of Nuuly, which comprises the Nuuly Rent and Nuuly Thrift brands. During the fourth quarter of fiscal 2023, Nuuly, the subscription-based rental service for women’s clothes, contributed $42.7 million to net sales, reflecting an increase from $17.3 million recorded in the earlier fiscal year’s comparable period, backed by a 149% rise in the subscribers.
Subscriber growth is backed by new subscribers and improvements in subscriber retention. Going forward, management remains optimistic about the prospects of Nuuly.
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 AnthroLiving initiative holds promise.
What’s More?
Analysts look optimistic about the company. For fiscal 2024, the Zacks Consensus Estimate for URBN’s sales and earnings per share (EPS) is currently pegged at $5 billion and $2.48, respectively, suggesting 4.3% and 41.7% growth from the year-ago period’s corresponding figures. For fiscal 2025, the consensus estimate for sales and EPS presently stands at $5.18 billion and $2.77, respectively, indicating an increase of 3.7% and 11.5% each from the comparable previous fiscal year’s actuals.
An impressive long-term expected earnings growth rate of 18% and a VGM Score of A speak of the potential for this Zacks Rank #1 (Strong Buy) stock.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 2% and 472%, respectively, from the year-ago reported figures. ANF delivered a negative earnings surprise of 141.2% in the last reported quarter.
Levi Strauss, a jeans retailer, currently has a Zacks Rank #2 (Buy). LEVI delivered an earnings surprise of 14.3% in the trailing four quarters.
The Zacks Consensus Estimate for Levi Strauss’ current financial-year sales suggests growth of 2.1% from the year-ago reported figure.
Boot Barn, a fashion apparel and accessories retailer, currently carries a Zacks Rank of 2. BOOT has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 12.7% from the year-ago reported figure.
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Urban Outfitters (URBN) Outperforms Industry: Here's Why
Urban Outfitters, Inc. (URBN - Free Report) seems a promising bet, thanks to its solid 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 22.7% outperforming its industry’s 15.1% rise over the past six months.
Let’s Delve Deep
Management has been making investments in the FP Movement with digital and creative brand prospects. It believes that the FP Movement will lure a wider base of customers to the 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, net sales were up 10.9% at Free People in the fourth quarter of fiscal 2023. Also, the comparable Retail segment’s net sales jumped 15% at the Free People Group in the same quarter.
Image Source: Zacks Investment Research
During the fiscal fourth quarter, the FP Movement brand witnessed an outstanding quarter, generating 38% retail segment growth. The new and existing FP Movement stores continue to outperform expectations in the reported quarter.
We note that the brand saw double-digit increases in all the key categories. Early customer response to the brand’s spring trends has been sturdy and management expects the brand's retail segment performance to be positive in the first quarter of fiscal 2024.
In addition, management remains optimistic about the prospects of Nuuly, which comprises the Nuuly Rent and Nuuly Thrift brands. During the fourth quarter of fiscal 2023, Nuuly, the subscription-based rental service for women’s clothes, contributed $42.7 million to net sales, reflecting an increase from $17.3 million recorded in the earlier fiscal year’s comparable period, backed by a 149% rise in the subscribers.
Subscriber growth is backed by new subscribers and improvements in subscriber retention. Going forward, management remains optimistic about the prospects of Nuuly.
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 AnthroLiving initiative holds promise.
What’s More?
Analysts look optimistic about the company. For fiscal 2024, the Zacks Consensus Estimate for URBN’s sales and earnings per share (EPS) is currently pegged at $5 billion and $2.48, respectively, suggesting 4.3% and 41.7% growth from the year-ago period’s corresponding figures. For fiscal 2025, the consensus estimate for sales and EPS presently stands at $5.18 billion and $2.77, respectively, indicating an increase of 3.7% and 11.5% each from the comparable previous fiscal year’s actuals.
An impressive long-term expected earnings growth rate of 18% and a VGM Score of A speak of the potential for this Zacks Rank #1 (Strong Buy) stock.
Other Solid Picks in Retail
We have highlighted three top-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Levi Strauss & Co. (LEVI - Free Report) and Boot Barn (BOOT - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 2% and 472%, respectively, from the year-ago reported figures. ANF delivered a negative earnings surprise of 141.2% in the last reported quarter.
Levi Strauss, a jeans retailer, currently has a Zacks Rank #2 (Buy). LEVI delivered an earnings surprise of 14.3% in the trailing four quarters.
The Zacks Consensus Estimate for Levi Strauss’ current financial-year sales suggests growth of 2.1% from the year-ago reported figure.
Boot Barn, a fashion apparel and accessories retailer, currently carries a Zacks Rank of 2. BOOT has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 12.7% from the year-ago reported figure.