URBN

TJX Companies and Urban Outfitters Post Strong Growth in 3Q

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TJX Companies (TJX) and Urban Outfitters (URBN) both showed impressive sales growth during their respective fiscal third quarters (results released this week). TJX Companies Has Years of Store Growth and Earnings Expansion Ahead of It TJX Companies, one of the largest off-price retailers of apparel and home furnishings in the US, released solid third-quarter results Tuesday. Net sales advanced 9%, while consolidated same-store sales increased 5% on top of 7% growth in the prior-year period. The company’s consolidated pre-tax profit margin advanced 0.9 percentage points thanks in part to buying and occupancy leverage and easier year-over-year overhead comparisons. Adjusted diluted earnings-per-share was solid during the quarter, advancing to $0.75 from $0.62 in the prior-year period (a 21% increase). Fiscal-year-to-date, cash … Read more

Market Overreacts to Urban Outfitters’ 10-Q

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Clothing retailer Urban Outfitters (click ticker for report: ) filed its 10-Q report for its relatively strong second quarter. Shares proceeded to drop heavily on Tuesday after a line from the quarterly regulatory filing revealed that third-quarter comparable store sales growth was decent, but not running at a near double-digit pace. Taken directly from the 10-Q: “Thus far during the third quarter of fiscal 2014, comparable Retail segment net sales are mid-single-digit positive.” This “mid-single-digit” rate compares to the 8.5% growth rate the firm posted during its second quarter, driven largely by Free People and a recovery at Anthropologie, a name tied more directly to housing. Source: Company Filings Assuming the mid-single-digit growth rate is somewhere between 4-7%, Urban will … Read more

Urban Outfitters’ Margin Story Continues

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Monday afternoon, retailer Urban Outfitters (click ticker for report: ) posted solid second quarter results as sales gains helped lift gross margins. Revenue jumped 12% year-over-year to $759 million, a touch below expectations, but solid in what has turned into a lackluster second quarter for retailers. Earnings per share increased 21% year-over-year to $0.51 per share, easily exceeding consensus estimates. Performance at Urban Outfitters was strong across all stores, with same-store sales growth of 38% at Free People, 9% at Anthropologie, and 5% at Urban Outfitters. As we can see from the above chart, the two-year trend at Free People continues to outpace the rest of the company. Sales accelerated at the women’s clothing store, even as the company faced … Read more

American Eagle and the Difficulty of Investing in Teen Retailers

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Monday after the market close, teen retailer American Eagle (click ticker for report: ) reduced its second quarter earnings outlook. After a relatively weak first quarter, the firm was generally optimistic about its prospects heading into the second quarter, predicting flat same-store sales and earnings per share of $0.19-$0.21. However, earlier this week the firm said earnings per share will now be closer to $0.10 for the second quarter, a decline of 50% compared to the same period a year ago. Same-store sales that were predicted to be flat will actually be down 7% year-over-year (compared to 8% growth in the same period a year ago). Thus, same-store sales are only about 1% higher than they were two years ago.   … Read more

Taking a Look at Retail

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The first quarter earnings season for retail has certainly been a bit of a mixed bag. Two of the largest retailers in the US, Wal-Mart (click ticker for report: ) and Target (click ticker for report: ) reported negative same-store sales revealing cautious spending patterns from American consumers. On the other hand, home improvement giant Home Depot (click ticker for report: ) registered wonderful sales gains as the firm continues to ride the housing recovery. Let’s take a look at the results of some retailers leveraged to discretionary income. Urban Outfitters                                                Urban Outfitters (click ticker for report: ) posted a solid first quarter, even though its revenue was slightly lighter than expected. Revenue rose 14% year-over-year to $648 million, driving … Read more

Gross Margins Recovering But Still Down At Urban Outfitters

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Apparel retailer Urban Outfitters (click ticker for report: ) reported strong sales for its fiscal year 2013 fourth quarter. Revenue jumped 17% year-over-year to $856 million, exceeding consensus estimates. Earnings per share fell a penny shy of consensus estimates, but were more than twice as high as the year prior at $0.56 per share. A quick look at metrics might suggest that the business is improving—it is—but the performance is still lagging what Urban achieved in fiscal year 2011. Gross margins improved 650 basis points year-over-year to 36.6% due to lower markdowns and an increase of 18% in regular priced comp sales. Still, the 36.6% gross margin remains 310 basis points lower than the fourth quarter of fiscal year 2011, … Read more

Urban Outfitters Third Quarter Results Were Lackluster

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Teen and twenty-something apparel retailer Urban Outfitters (click ticker for report: ) reported mediocre third quarter results Monday afternoon. The company grew total revenue 14% year-over-year to $693 million, roughly in-line with consensus expectations. Earnings were a penny short of consensus, coming in at $0.40 per share, a 21% increase. Gross margins improved 220 basis points year-over-year to 37.6%, but we weren’t incredibly impressed with profitability. We think a lot of the increase came from moving Free People to a more heavily direct-to-consumer business rather than a wholesale business, though management also noted that discounting was less prevalent during the quarter. Performance across the brands diverged, with comparable retail net sales at Free People up 24%, up 7% at Urban … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more