Urban Outfitters Inc
) have been portraying a downtrend since the company posted
fourth-quarter fiscal 2014 results on March 10, 2014. It seems
that analysts have become less constructive on the stock's future
performance, which has slipped nearly 3% since the earnings
This is evident from the movement witnessed in the Zacks
Consensus Estimate that tumbled 3.8% to $2.04 for fiscal 2015 and
2.9% to $2.37 per share for fiscal 2016 in the past 30 days.
Urban Outfitters' total net sales came in at $905.9 million
that fell short of the Zacks Consensus Estimate of $911 million.
Sales were affected due to sluggish performance of the Urban
Outfitters brand attributable to adverse weather conditions and
weak product execution. Moreover, management hinted that the
headwinds faced by the Urban Outfitters brand may impact its
performance in the first quarter of fiscal 2015.
Net sales at the Urban Outfitters brand fell 4.2% to $398
million during the quarter, whereas comparable retail segment net
sales declined 9%.
Fashion obsolescence remains the key concern for Urban
Outfitters' business model, which includes a sustained focus on
product and design innovation. The taste and preferences of
people are ever changing, and thus it is challenging to
constantly revamp its assortment in the fear of losing market
share against other big players, which may flood the market with
more in trend collections.
However, what is still providing cushion to this Zacks Rank #3
(Hold) stock is the better-than-expected bottom-line results,
wherein earnings of 59 cents a share beat the Zacks Consensus
Estimate by 7.3% and jumped 5.4% year over year. The company has
registered positive earnings surprise over the trailing four
quarters with an average beat of 7.1%. Moreover, total net sales
of Urban Outfitters climbed 5.7% during the quarter.
We believe that the company's focus on increasing customer
count, store expansion, online and mobile marketing endeavors,
and direct-to-consumer business acted as catalysts.
Other Stock Worth Considering
Other better-ranked retail stocks that look promising and are
expected to continue with their upbeat performance include
Michael Kors Holdings Limited
) both sporting a Zacks Rank #1 (Strong Buy), along with
G-III Apparel Group, Ltd.
) holding a Zacks Rank #2 (Buy).
G-III APPAREL (GIII): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
URBAN OUTFITTER (URBN): Free Stock Analysis
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