Urban Outfitters surprises the market with its “fashion is back”

The U.S. fashion retailer reported its third-quarter results Tuesday, surprising the market with figures that exceeded expectations on both the top- and bottom-line. CEO Richard Hayne noted that "fashion is back" and that momentum has continued into November.

Furthermore, highlighted Urban Outfitters (URBN), these figures point to the company potentially setting up for a "promising" holiday season.

However, point out from ‘Seeking Alpha’, questions still abound though on the changing "model shift" from growth in direct-to-consumer; and the solid results and "cautiously optimistic" near-term outlook do little to quell fears.

What analysts said: good quarter, but not enough for an upgrade

Urban Outfitters (URBN) reported its third-quarter results (three months to last of October, on November, 20 after-market close. Headline results were positive with the company "beating" on both the top- and bottom-line in the quarter relative to expectations.

Like-for-like sales recovered at all the group’s three brands, prompting CEO Richard Hayne note that the momentum has continued into November. "Fashion is back" and in the short-term this may be setting up for a "promising" holiday season, albeit with the caveat that it is always extremely competitive and unpredictable.

Investment analysts at William Blair raised their FY2018 earnings estimates for shares of Urban Outfitters in a report released on Tuesday. William Blair analyst D. Carden now anticipates that the apparel retailer will earn 1.54 dollars per share for the year, up from their prior forecast of 1.46 dollars.

Several other research firms have also commented on URBN. Wells Fargo & Company reaffirmed a “market perform” rating and set a 28 dollars target price on the stock in a research note on Tuesday.

Likewise, Nomura/Instinet analyst, Simeon Siegel, reiterated his “neutral” rating on shares of Urban Outfitters and raised his price.

The stock has been surging since its second-quarter report overcame a low bar as it is up 41 percent over the last three months.

Photo:Urban Outfitters, Official Web


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