Why Urban Outfitters (URBN) Stock Is Down in After-Hours Trading Today

NEW YORK (TheStreet) -- Urban Outfitters  (URBN) fell in after-hours trading on Monday after the clothing company reported flat comparable retail segment net sales in its second-quarter earnings report.

Gross profit rate declined 194 basis points year-over-year thanks to "underperformance at the Urban Outfitters brand resulting in lower merchandise margins related to poor performing product and store occupancy deleverage resulting from negative store comparable sales," according to the company's report.

Urban Outfitters did beat analysts' expectations on earnings, though, and reported a decline in net income to $67.5 million, or 49 cents per diluted share, from $76.4 million, or 51 cents per diluted share. Revenue rose 7% year-over-year to a record $811.3 million from $758.5 million. The consensus estimate called for earnings of 49 cents a share on revenue of $806.99 million.

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The stock was down 0.46% to $36.75 at 4:17 p.m.

Separately, 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 several positive factors, 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, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: URBN Ratings Report

URBN Chart URBN data by YCharts

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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