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Urban Outfitters Inc - Stock Quote URBN

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Morningstar's Urban Outfitters Inc Stock Analysis

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No-Moat Urban Outfitters’ Sales Have Recovered From the Pandemic Disruption but Challenges Remain

David Swartz Equity Analyst

Business Strategy and Outlook

| David Swartz |

We believe Urban Outfitters lacks a brand intangible asset that would provide an economic moat and pricing power. While we think its three major apparel brands--Anthropologie, Free People, and Urban Outfitters--remain enticing to their primary demographic of women 18-45 years old, we also think competition has taken a toll. Urban Outfitters grew to be one of the larger specialty apparel retailers in the United States on the strength of its distinctive styles. However, although sales and profits have recovered nicely as the economy has reopened, same-store sales growth and profit margins were inconsistent in the years before the pandemic. While this is partly due to shifting fashion trends, we think fragmentation in apparel retail is the primary factor. Urban Outfitters, like many others, has had to resort to markdowns and promotions to compete with wide-moat Amazon and other e-commerce, outlet stores, discount stores, and key vendors’ direct-to-consumer efforts.

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Urban Outfitters Inc's Company Profile

Business Description

Founded in 1970, Philadelphia-based Urban Outfitters is an apparel and home goods retailer that operates about 700 stores and e-commerce in North America and Europe under the Urban Outfitters, Free People, FP Movement, Anthropologie, Terrain, and BHLDN brands. It also sells products through a wholesale operation, owns some restaurants, and operates a clothing rental business. Urban Outfitters primarily markets to young adults and offers products in categories such as women’s and men’s apparel, home goods, shoes, wedding, and outdoors.

5000 South Broad Street
Philadelphia, PA, 19112-1495
T +1 215 454-5500
Sector Consumer Cyclical
Industry Apparel Retail
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 31, 2023
Stock Type Cyclical
Employees 23,000

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