Urban Outfitters, Inc. (URBN) has posted big gains over the last year as an improving global economy encouraged consumer to start spending again. The company has an average earnings surprise of 7.56% over the last four quarters and a bullish next-year estimate calling for 20% growth.
First-Quarter Results
The last update on Urban’s business came in mid May with better than expected Q1 results. Sales for the period were up 25% from last year to $480 million. Earnings came in ahead of expectations at 31 cents, one penny better than the Zacks Consensus Estimate, for a four-quarter average earnings surprise of 7.5%.
The company’s comparable retail segment sales, which includes its direct-to-consumer channel, grew 16%, while regular same-store sales were also impressive at 11%. Overall, its direct-to-consumer sales were on fire, up 42% from last year.
Urban’s solid top-line growth was accompanied by margin expansion, with its gross margin up 459 basis points from last year.
Solid Balance Sheet
Its cash and equivalents were up $100 million from just the previous quarter to $259 million against no debt.
Estimates
Estimates have ticked higher over the last few months, with the current year up 4 cents to $1.67 and the next year up 6 cents to $2.00, a bullish 19% growth projection.
After some bullish movement in the last year, shares of URBN look a bit pricey, trading with a forward P/E multiple of 20X against its peer’s 15X.
2-Year Chart
Shares of URBN have been a bit weak lately on concern over the sustainability of the recovery, but the long-term trend is still bullish, take a look below.
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Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader Service. Zacks Investment Research
