Urban Outfitters (URBN) Holiday Comps Flat Amid Anthropologie Underperformance; Stifel Affirms at 'Buy'

Stifel reaffirms its Buy rating and $30 price target on Urban Outfitters, Inc. (Nasdaq: URBN) following the company's holiday sales results, which were issued after markets closed on Thursday.

Analyst Richard Jaffe commented, "Comparable Retail segment net sales increased 2% at Free People and decreased 2% at Urban Outfitters and Anthropologie. Wholesale segment net sales increased 40% partially due to delayed shipments from the 3Q carrying over into the 4Q. The company is now current on all wholesale segment shipments and does not anticipate any further delays."

Jaffe said

Jaffee also sees gross margin pressure in Q4, with the metric dropping about 0.4 percent on tighter merchandise margins at Free People and Anthropologie. Additionally, deleverage related to the company’s fulfillment center transition (50 bps neg impact), store occupancy deleverage related to negative store comps and negative impact from currency translation (50 bps) also likely pressure 4Q gross margin, the analyst noted.

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