Urban Outfitters Falls as Sales Miss Forecast - Analyst Blog


Shares of Urban Outfitters Inc. ( URBN ) fell 2.8% after the company released sales data for the fourth quarter and full-year fiscal 2014, which turned out to be lower than expected. Sales for the quarter came in at $905.9 million falling short of the Zacks Consensus Estimate of $926 million.

However, what provided some cushion to the stock was the year-over-year growth witnessed in the topline. Sales grew 6% buoyed by strong performance across Anthropologie and Free People brands, partially offset by softness seen at Urban Outfitters' brand and unfavorable weather conditions. 

Comparable Retail segment net sales (including comparable direct-to-consumer channel) rose 1%, which was also below analysts' expectations. Comparable Retail segment net sales increased 10% at Anthropologie and 20% at Free People but declined 9% at Urban Outfitters. Net sales grew 24% at the Wholesale segment.

For the fiscal year ended Jan 31, 2014, Urban Outfitters' net sales rose 10% year over year to $3,086.6 billion. However, this lagged the Zacks Consensus Estimate of $3,094 million. Net sales at wholesale segment grew 20% while comparable Retail segment net sales rose 6%.

Further, the company opened 38 outlets during the fiscal 2014 comprising 16 Urban Outfitters outlets, 13 Free People stores and 9 Anthropologie outlets. It also closed 1 store of Urban Outfitters and 2 stores of Anthropologie brands.

Notably, on Jan 10, 2014, Urban Outfitters' posted healthy sales data for the holiday season (November and December). Sales grew 8% year over year to $716 million in the said period while comparable Retail segment net sales (including comparable direct-to-consumer channel) rose 3%.

The holiday season was a tough one as intense promotional activity marred profits without creating a significant increase in demand. While some retailers emerged strong, others could not manage to do so.

Retailers like Costco Wholesale Corp. ( COST ) and L Brands, Inc . ( LB ) emerged strong by recording comparable-store sales growth of 4% and 9% respectively, above analysts' expectations.

At present, Urban Outfitters' has a Zacks Rank #3 (Hold). Other better ranked retail stocks include Christopher & Banks Corporation ( CBK ) which carries a Zacks Rank #1 (Strong Buy).

CHRISTOPHER&BNK (CBK): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

L BRANDS INC (LB): Free Stock Analysis Report

URBAN OUTFITTER (URBN): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CBK , COST , LB , URBN



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