Traffic Returns to Urban Outfitters (URBN) as Comps Turn Positive for First Time in 1.5 Years - Stifel
Stifel affirms Urban Outfitters (Nasdaq: URBN) at Buy with a $44 price target following Q4 results and sales update issued Monday night.
Analyst Richard Jaffe noted that URBN's Q4 EPS of $0.60 compared with the firm's $0.56 estimate.
Jaffe continued, Urban Outfitters brand comped positive for the first time in nearly 1.5 years as customers reacted positively to a more compelling merchandise assortment featuring a reduced style count (previously UO was over-assorted with too many product and style redundancies and not enough merchandise depth). Going forward we believe there remains work to be done - improving IMU (which should begin in the 3Q), decrease markdowns (previous mds were driven by redundant style offerings and a bloated inventory position; not fashion misses) and store productivity, however we believe the brand is on the mend and expect meaningful improvement in the 2H.
On the company's outlook, Jaffe said, From a macro-economic perspective, management believes that the current environment is favorable for the U.S. consumer given the relatively inexpensive energy prices, little-to-no inflation, the improving employment picture and a stronger U.S. dollar. In addition, management believes that there are numerous fashion trends across many product categories, which should fuel shopping as the consumer updates her wardrobe.
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Urban Outfitters, Inc. closed at $39.51 yesterday.