Why Urban Outfitters (URBN) Stock Is Down

NEW YORK (TheStreet) -- Shares of Urban Outfitters Inc.  (URBN) are down -3.93% to $34.75 in after-hours trading after the specialty retailer reported that first quarter fiscal 2015 net income declined from the previous year.

Net income was $37,478, or 26 cents per share, for the three months ended April 30, 2014, versus $47,058, or 32 cents per share, in the previous year.

Total company net sales for the first quarter increased 6% over the same quarter last year to a record $686 million from $648 million.

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TheStreet Ratings team rates URBAN OUTFITTERS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate URBAN OUTFITTERS INC (URBN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, expanding profit margins, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • URBN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, URBN has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • URBAN OUTFITTERS INC has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, URBAN OUTFITTERS INC increased its bottom line by earning $1.89 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $1.89).
  • 40.50% is the gross profit margin for URBAN OUTFITTERS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.78% is above that of the industry average.
  • Net operating cash flow has slightly increased to $212.53 million or 3.52% when compared to the same quarter last year. In addition, URBAN OUTFITTERS INC has also modestly surpassed the industry average cash flow growth rate of -4.54%.
  • You can view the full analysis from the report here: URBN Ratings Report

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