Urban Outfitters (URBN): Women's Apparel Offsets Growth in Other 6 Categories - FBR
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FBR Capital analyst, Susan Anderson, reiterated her Market Perform rating on shares of Urban Outfitters, Inc. (NASDAQ: URBN) after the company reported 3Q16 EPS of $0.40, vs. consensus' $0.44. SSS were +1%, vs. consensus' +1.9%. Sales were driven by strong UO and FP wholesale performance.
Management believes 4Q16 GM could decrease YOY due to higher markdowns at Anthro (women's apparel performance), slightly higher at UO due to marginally higher inventory (likely from cycling lean inventory LY). URBN also expects SGA to grow +MSD in 4Q due to increased store-related expenses to support non-comp store-based growth.
Despite growth in six of seven product categories, SSS at Anthro were down –2.7% vs. consensus' estimates of –1.1%+ and 0% LY from a decline in women's apparel. Expanded categories (home, beauty, BHLDN, Terrain) contributed positive results. Inventory was tightly controlled, but Anthro still had higher markdowns for the quarter.
No change to the price target of $31.
Shares of Urban Outfitters, Inc. closed at $39.01 yesterday.
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