Urban Outfitters (URBN) Stock Rises Sharply Today on November Comp Sales

NEW YORK (TheStreet) -- Shares of Urban Outfitters (URBN) are sharply up 8.01% to $32.42 in afternoon trading Thursday after the retailer said sales at its stores open at least a year have been improving following a disappointing third quarter.

The company said same-store sales in November grew in the low single-digit percentage range.

Urban Outfitters reported its same-store sales declined by 1% in the third quarter from a year earlier.

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Strong U.S. retail sales data provided a boost to retail stocks including Urban Outfitters. Retail sales grew by 0.7% in November, higher than the 0.3% rebound in October, and surpassing the 0.4% increase analysts had expected.

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 multiple 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, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, URBAN OUTFITTERS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • URBAN OUTFITTERS INC's earnings per share declined by 25.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, URBAN OUTFITTERS INC increased its bottom line by earning $1.89 versus $1.61 in the prior year. For the next year, the market is expecting a contraction of 13.8% in earnings ($1.63 versus $1.89).
  • You can view the full analysis from the report here: URBN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

P&G, GE and IBM Need to Innovate; Has Starbucks' Stock Grown Ice Cold?--ICYMI

P&G, GE and IBM Need to Innovate; Has Starbucks' Stock Grown Ice Cold?--ICYMI

Is Best Buy Sleeping With the Enemy With Amazon Partnership?

Is Best Buy Sleeping With the Enemy With Amazon Partnership?

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Video: The S&P 500 Is Failing to Make New Highs

Video: The S&P 500 Is Failing to Make New Highs

Dow, S&P 500 and Nasdaq Finish Lower as Apple, P&G Slump

Dow, S&P 500 and Nasdaq Finish Lower as Apple, P&G Slump