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) Q3 Earnings: Will Comps Woes Persist?
Read MoreHide Full Article
Urban Outfitters Inc. (URBN - Free Report) is scheduled to release third-quarter fiscal 2018 results on Nov 20. In the preceding quarter, the company’s earnings beat the Zacks Consensus Estimate by 18.9%. Let’s see, how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether Urban Outfitters will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the current quarter is pegged at 33 cents, reflecting a year-over-year decrease of nearly 18%. Notably, the consensus mark has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $857 million in comparison to $862 million, reported in the prior-year period.
Factors at Play
Significantly, this Philadelphia, PA-based company is likely to benefit from new store openings, increase in direct penetration, growing wholesale operations, technology advancements and merchandising improvements. We also believe that better product execution and an effective inventory management will help augment the company’s performance. Management is revamping stores and bringing in more compelling assortments. The company is also strategically investing in shop-in-shops.
However, decline in comparable retail segment net sales in fiscal 2018 has been a concern for investors and is likely to persist in the third quarter too. Analysts surveyed by Zacks expect comparable store sales at Urban Outfitters and Anthropologie Group to decrease by 5% and 2.5%, respectively. However, comps at Free People are expected to increase by 2.8%. It is important to note that last quarter, comparable retail segment net sales fell 7.9% at Urban Outfitters and 4% at Anthropologie Group, respectively, but increased 2.9 % at the Free People.
Investors are also concerned about management’s remark over gross margin, which is expected to decline year over year in third-quarter fiscal 2018 on account of rise in delivery as well as deleveraging in store occupancy expenditures. In the second quarter, gross margin contracted 440 basis points (bps) to approximately 34.1%, following a decline of 284 bps to roughly 31.5% in the first quarter, primarily due to deleveraging in customer delivery and logistics expense rates.
Urban Outfitters, Inc. Price, Consensus and EPS Surprise
Our proven model shows that Urban Outfitters is likely to beat estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Urban Outfitters’ ESP of +2.11% and a Zacks Rank #3 make us reasonably confident of an earnings beat.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies worth considering from the same space with the right combination of elements to deliver an earnings beat:
The Kroger Co. (KR - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank of 3.
Signet Jewelers Limited (SIG - Free Report) has an Earnings ESP of +27.52% and the company is Zacks #3 Ranked.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Urban Outfitters (URBN) Q3 Earnings: Will Comps Woes Persist?
Urban Outfitters Inc. (URBN - Free Report) is scheduled to release third-quarter fiscal 2018 results on Nov 20. In the preceding quarter, the company’s earnings beat the Zacks Consensus Estimate by 18.9%. Let’s see, how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether Urban Outfitters will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the current quarter is pegged at 33 cents, reflecting a year-over-year decrease of nearly 18%. Notably, the consensus mark has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $857 million in comparison to $862 million, reported in the prior-year period.
Factors at Play
Significantly, this Philadelphia, PA-based company is likely to benefit from new store openings, increase in direct penetration, growing wholesale operations, technology advancements and merchandising improvements. We also believe that better product execution and an effective inventory management will help augment the company’s performance. Management is revamping stores and bringing in more compelling assortments. The company is also strategically investing in shop-in-shops.
However, decline in comparable retail segment net sales in fiscal 2018 has been a concern for investors and is likely to persist in the third quarter too. Analysts surveyed by Zacks expect comparable store sales at Urban Outfitters and Anthropologie Group to decrease by 5% and 2.5%, respectively. However, comps at Free People are expected to increase by 2.8%. It is important to note that last quarter, comparable retail segment net sales fell 7.9% at Urban Outfitters and 4% at Anthropologie Group, respectively, but increased 2.9 % at the Free People.
Investors are also concerned about management’s remark over gross margin, which is expected to decline year over year in third-quarter fiscal 2018 on account of rise in delivery as well as deleveraging in store occupancy expenditures. In the second quarter, gross margin contracted 440 basis points (bps) to approximately 34.1%, following a decline of 284 bps to roughly 31.5% in the first quarter, primarily due to deleveraging in customer delivery and logistics expense rates.
Urban Outfitters, Inc. Price, Consensus and EPS Surprise
Urban Outfitters, Inc. Price, Consensus and EPS Surprise | Urban Outfitters, Inc. Quote
What Does the Zacks Model Say?
Our proven model shows that Urban Outfitters is likely to beat estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Urban Outfitters’ ESP of +2.11% and a Zacks Rank #3 make us reasonably confident of an earnings beat.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies worth considering from the same space with the right combination of elements to deliver an earnings beat:
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kroger Co. (KR - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank of 3.
Signet Jewelers Limited (SIG - Free Report) has an Earnings ESP of +27.52% and the company is Zacks #3 Ranked.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>