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Urban Outfitters (URBN) Stock Surges on Robust Q4 Sales

Shares of Urban Outfitters, Inc.URBN jumped nearly 6% on Feb 9 after the company delivered robust fourth-quarter fiscal 2018 net sales. During the quarter, the company witnessed double-digit growth in the direct-to-consumer channel.

Sales in Detail

We observe that net sales of $1,089.1 million surpassed the Zacks Consensus Estimate of $1,077 million and were up 5.7% year over year. The increase in the top line can primarily be attributed to robust performance of Urban Outfitters, Anthropologie Group and Free People.

Net sales by brands gained 4.9% to $433.9 million at Urban Outfitters, 5.5% to $447.2 million at Anthropologie Group and 8.2% to $201.7 million at Free People. For Food and Beverage net sales came in at $6.3 million compared with $6 million in the prior-year quarter.

The company's net sales were up 5.7% to $1,010.2 million at the Retail Segment and 6.3% to $78.9 million at the Wholesale Segment.

Comparable retail segment net sales, including the comparable direct-to-consumer channel, were up 4% year over year. Moreover, comparable retail segment net sales inched up 2% at Urban Outfitters, 5% at Anthropologie Group and 8% at the Free People. The company registered double-digit growth in direct-to-consumer channel. Meanwhile, Wholesale segment net sales jumped 6.3%. Comparable sales were driven by robust apparel sales performance.

Store Update

During the fiscal 2018, the Zacks Rank #3 (Hold) company opened 18 new outlets - eight Free People stores, five Urban Outfitters store, four Anthropologie Group store and one Beverage restaurant. The company shuttered 11 stores - Three Anthropologie Group store, two Urban Outfitters stores, three Food and Beverage restaurant and three Free People stores - in the same time frame.

Stock Performance

Impressively, this Philadelphia, PA-based company has displayed a solid bull run on the bourses soaring 93.1% in a six-month time frame. The stock has outpaced the Retail-Apparel and Shoes industry's growth of 18.9% and the S&P 500's gain of 6.5%. Currently, the industry ranks among the top 18% of all Zacks industries.

Being a multi-brand and multi-channel retailer, Urban Outfitters offer flexible merchandising strategy. Additionally, the company's significant global presence with rapidly expanding e-commerce activities remains impressive. We believe better product execution and effective inventory management will help augment performance. Meanwhile, it is strategically investing in shop-in-shops.

Stocks to Consider

Better-ranked stocks worth considering in the retail sector include G-III Apparel Group GIII , Delta Apparel DLA and Lululemon Athletica LULU . All three of them carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

G-III Apparel Group has delivered a positive earnings surprise in the last three quarters. The company projects long-term earnings per share growth of 15%.

Delta Apparel forecasts long-term earnings growth of 15%.

Lululemon Athletica delivered an average positive earnings surprise of 8.1% in the preceding four quarters. The company estimates long-term earnings growth of 12.9%.

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


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

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