Why Urban Outfitters (URBN) Stock is Surging Today
Updated from 10:56 AM EDT.
NEW YORK (TheStreet) -- Shares of Urban Outfitters (URBN) - Get Report are climbing 14.07% to $28.05 on heavy trading volume late Thursday afternoon after the retailer posted better-than-expected revenue for the 2017 fiscal first quarter after yesterday's closing bell.
The Philadelphia-based parent company of Urban Outfitters, Anthropologie and Free People said revenue increased 3% year-over-year to $762.58 million. Analysts were expecting revenue of $759.39 million.
Earnings of 25 cents per share matched analysts' forecasts.
The company also reported comparable store sales growth of 1%, while analysts at JPMorgan and BMO Capital Markets had anticipated flat same store sales.
"Against a challenging backdrop, URBN posted strong 1Q results, with comps and gross margin exceeding expectations. We are encouraged by the near-term momentum, and continue to like the long-term story here," Jefferies wrote in a note this morning.
The company's Urban Outfitters division is benefiting from improved execution coupled with an influx of new fashion trends, driving strength in women's apparel during the first quarter, the firm added.
"While May got off to a softer start, we believe this is largely attributable to weather (as well as a calendar shift), and should normalize as the quarter progresses," the firm said.
Jefferies maintained its $38 price target and "buy" rating following the results.
About 3.18 million of the company's shares were traded so far today vs. its average volume of 2.35 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels.
However, the team also finds weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: URBN
