Urban Outfitters Wows With Solid Earnings

Urban Outfitters Inc. (NASDAQ: URBN) reported its fiscal first-quarter financial results after the markets closed on Wednesday. The company said it had $0.25 in earnings per share (EPS) on $762.6 million in revenue, compared to consensus estimate from Thomson Reuters of $0.25 in EPS on revenue of $760.4 million. In the same period of last year, it posted EPS of $0.25 and $739.0 million in revenue.

Comparable Retail segment net sales, which include the comparable direct-to-consumer channel, increased 1%, which includes the benefit of a leap year. Comparable Retail segment net sales increased 2% at Urban Outfitters, were flat at the Anthropologie Group and decreased 2% at Free People. Wholesale segment net sales increased 16%.

Back in February, the board of directors authorized the repurchase of 20 million common shares. Under this authorization, Urban Outfitters repurchased and subsequently retired 0.3 million common shares for approximately $11 million during the first quarter of fiscal 2017. The company repurchased and subsequently retired a total of 12.7 million common shares for approximately $382 million during fiscal 2016.

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In terms of its business segments, the company reported net sales as follows:

• Urban Outfitters net sales increased 1.2% to $299.3 million from the same period last year.
• Anthropologie Group net sales increased 1.3% to $315.3 million.
• Free People net sales increased 9.5% to $144.5 million.
• Other segments had net sales of $3.43 million.

Richard A. Hayne, CEO of Urban Outfitters, kept his commentary on earnings short:

We are pleased to announce record first quarter sales and improved gross profit margins. These results were driven by more compelling product assortments, improved inventory management and stronger marketing.

On the books, Urban Outfitters cash, cash equivalents and marketable securities totaled $287.71 million at the end of the quarter, compared to $273.56 million at the end of the same period from last year.

Shares of Urban Outfitters were trading up 12% at $27.60 on Thursday, with a consensus analyst price target of $32.90 and a 52-week trading range of $19.26 to $36.99.

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