Piper Jaffray analyst Neely Tamminga, reiterated her Neutral rating on shares of Urban Outfitters, Inc. (NASDAQ: URBN) after the company reported earnings. The analyst is encouraged by indications that URBN Inc. is performing well enough in a tough environment, but maintains a Neutral rating on the view that the stock will trade at fair value on the other side of FQ2 earnings.

FQ2 EPS of $0.66 came in well ahead of expectations ($0.55 by the street). Comparable store sales increased by 1% in the quarter with divisional performance, as follows: UO, +5%; Anthropologie, (3%); and Free People, flat. Gross margins expanded year-over-year by 180 bps reflecting improved merchandise margins primarily at UO and Anthropologie. Inventory levels remain lean following FQ1's (9.5%) y/y decline; FQ2 inventory levels were down (4%) y/y.

The analyst sees what appears to be stability in interest in apparel thus far this back-to-school/early fall selling season, indicative of interest in fashion and particularly denim-anchored looks.

The price target of $42.00 is up from $32.00

For an analyst ratings summary and ratings history on Urban Outfitters, Inc. click here. For more ratings news on Urban Outfitters, Inc. click here.

Shares of Urban Outfitters, Inc. closed at $31.24 yesterday.