NEW YORK (TheStreet) -- Urban Outfitters (URBN) - Get Report stock is gaining by 6.07% to $22.37 in afternoon trading on Wednesday, as Citigroup analysts claim the company is "better positioned than most."
Comparable retail segment net sales are low single digital negative so far during the fourth quarter, the Philadelphia-based retailer stated in a 10Q filing yesterday afternoon, Barron's reports.
Urban Outfitters's comparable store sales so far this quarter probably range between -1% and -2%, which is an improvement from the start of the quarter, according to Citigroup analysts, Barron's notes.
The company has "very clean inventories and a more favorable product mix," according to the analysts, Barron's adds. Urban operates three "differentiated concepts," and has "significant growth opportunity," Citigroup explains.
The upside at Urban Outfitters will outweigh any downside to margins at the company's Anthropolgie brand, Citigroup mentions, according to Barron's.
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 4.6%. 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 32.91%, 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.