Is This the Turnaround That Urban Outfitters Was Looking For?

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Urban Outfitters, Inc. (NASDAQ: URBN) reported fiscal second quarter financial results after markets closed Tuesday. The retailer said that it had $0.44 in earnings per share (EPS) and $872.9 million in revenue, compared with consensus estimates from Thomson Reuters that called for $0.37 in EPS and $861.76 million in revenue. The same period from last year had $0.66 in EPS and $890.57 million in revenue.

Comparable retail segment net sales, which includes the comparable direct-to-consumer channel, decreased 4.9%.

By brand, comparable retail segment net sales increased 2.9% at Free People, but decreased 4.0% at the Anthropologie Group and 7.9% at Urban Outfitters. The decline in comparable retail segment net sales was due to negative retail store sales, which was partially offset by continued sales growth in its direct-to-consumer channel.

The company did not release any guidance in the report, but consensus estimates are calling for $0.34 in EPS and $854.4 million in revenue for the coming quarter.

On the books, cash, cash equivalents, and marketable securities totaled $386.9 million at the end of the quarter, versus $259.2 million at the end of the quarter.

Richard A. Hayne, CEO of Urban Outfitters, commented:

While we are disappointed in our second quarter performance, we have a number of initiatives underway including: speed to customer, international growth, wholesale expansion and digital investments. We believe these initiatives combined with encouraging fashion apparel trends could lead to improved topline performance in future quarters.

Shares of Urban Outfitters closed Tuesday down 5% at $16.82, with a consensus analyst price target of $20.15 and a 52-week range of $16.68 to $18.27. Following the release, the stock was initially up about 15% at $19.39, in the after-hours trading session.