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Urban Outfitters Inc URBN

Morningstar Rating
$41.15 −6.03 (12.78%)
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Company Report

Urban Outfitters Earnings: Solid Sales Confirmed and Outlook Is Reasonable; Shares Fully Valued

No-moat Urban Outfitters’ sales results for fiscal 2024’s fourth quarter aligned with our estimates, which we had revised after its holiday sales update in early January. The firm’s namesake retailer continued to struggle, but its other segments posted stellar sales. Even so, investors may have been disappointed that Urban Outfitters’ margins were not higher and that sales slowed in the final month of the quarter, as after a roughly 40% rally over the past three months, its shares slid 10% in aftermarket trading on Feb. 27. After this move, they are trading very close to our $42.50 per share fair value estimate, which we do not expect to change.

Price vs Fair Value

URBN is trading at a 3% discount.
Price
$41.15
Fair Value
$41.50
Uncertainty
High
1-Star Price
$78.62
5-Star Price
$58.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Urban Outfitters generates about half its sales from e-commerce. It was the fourth-largest online apparel and footwear specialist firm in the U.S. in 2022 (Euromonitor).

Bears

Urban Outfitters has more fashion risk than some other retailers. Its sales suffer when it misreads a fashion trend or if a trend moves away from its core styles. Consequently, its sales growth tends to be volatile.

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News

Trading Information

Previous Close Price
$47.18
Day Range
$39.5744.03
52-Week Range
$24.7347.29
Bid/Ask
$41.03 / $41.29
Market Cap
$3.82 Bil
Volume/Avg
8.6 Mil / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
13.98
Price/Sales
0.77
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
< 0.01%

Company Profile

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 (87% of fiscal 2023 sales) and other regions. Its retail nameplates are Urban Outfitters, Free People, FP Movement, and Anthropologie. Retail accounted for 92% of fiscal 2023 revenue, but the firm also sells products through a wholesale operation, owns some restaurants, and operates a clothing rental and resale business called Nuuly. Urban Outfitters primarily markets to young adults and offers products in categories such as apparel (63% of fiscal 2023 sales), home goods (19% of sales), accessories (13% of sales), and more.
Sector
Consumer Cyclical
Industry
Apparel Retail
Stock Style Box
Small Core
Total Number of Employees
26,000

Competitors

Valuation

Metric
URBN
JWN
GPS
Price/Earnings (Normalized)
13.9814.51101.26
Price/Book Value
1.874.752.90
Price/Sales
0.770.240.48
Price/Cash Flow
5.913.1811.03
Price/Earnings
URBN
JWN
GPS

Financial Strength

Metric
URBN
JWN
GPS
Quick Ratio
0.510.190.43
Current Ratio
1.421.001.39
Interest Coverage
1.933.47
Quick Ratio
URBN
JWN
GPS

Profitability

Metric
URBN
JWN
GPS
Return on Assets (Normalized)
7.79%4.27%0.76%
Return on Equity (Normalized)
15.99%58.03%3.67%
Return on Invested Capital (Normalized)
10.10%8.90%1.25%
Return on Assets
URBN
JWN
GPS
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