Urban Outfitters Earnings Won’t Satisfy Investors or Analysts

Same-store sales, including direct-to-consumer sales were flat year-over-year. Same-store sales were up 21% at the company’s Free People stores and 6% at the Anthropologie stores. Sales at the namesake stores were down 10%.

Second quarter revenue was the highest in the company’s history for a second quarter, but

gross profit was down 1.94% compared with the second quarter of 2013 mostly due to underperformance at the Urban Outfitter stores.

The company said it bought back 9.7 million shares in its first quarter and authorized the repurchase of 10 million more in the second quarter. The company repurchased 3.7 million shares in the second quarter and has 6.3 million remaining in its current authorization.

Urban Outfitters did not offer guidance, but the consensus estimates for the third quarter call for EPS of $0.52 on revenues of $845.42 million. For the full year, analysts are expecting EPS of $1.96 on revenues of $3.35 billion.

Though not a retail powerhouse, the stock is followed by 36 analysts with an average recommendation of Overweight. The average rating has been in force since the end of the prior quarter, so we’ll be watching to see if the rather disappointing profit showing causes some analysts to rethink their recommendations. Lower direct sales are not encouraging either.

Shares are down about 1.4% in after-hours trading, at $36.42 in a 52-week range of $32.23 to $44.15. Thomson Reuters had a consensus analyst price target of around $42.10 before today’s results were announced.

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