Urban Outfitters (URBN) Stock Tumbles as Shoppers Move Online

Urban Outfitters (URBN) stock is lower in afternoon trading on Monday, as online sales outpaced in-store sales during the Thanksgiving weekend.
By Rachel Graf ,

NEW YORK (TheStreet) -- Urban Outfitters (URBN) - Get Report stock is down 5.58% to $22.33 in afternoon trading on Monday, as more people shopped online than in stores this past Thanksgiving weekend, according to a survey by the National Retail Federation

About 75.3 million people shopped online during Black Friday, whereas 74.2 million shoppers shopped in-stores on the same day, according to the survey.

Digital Black Friday sales climbed 14% from last year, according to Adobe Systems, the Wall Street Journal reports. More than half of the shopping on Black Friday came from mobile devices.

"It is clear that the age-old holiday tradition of heading out to stores with family and friends is now equally matched in the new tradition of looking online for holiday savings opportunities," NRF CEO Matthew Shay said in a statement. 

Urban Outfitters is a lifestyle retail company based in Philadelphia. 

Separately, TheStreet Ratings team rates URBAN OUTFITTERS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate URBAN OUTFITTERS INC (URBN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 10.3% when compared to the same quarter one year prior, going from $47.14 million to $51.99 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • URBAN OUTFITTERS INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, URBAN OUTFITTERS INC reported lower earnings of $1.70 versus $1.89 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.70).
  • URBN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The gross profit margin for URBAN OUTFITTERS INC is currently lower than what is desirable, coming in at 34.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.30% trails that of the industry average.
  • You can view the full analysis from the report here: URBN

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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