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Urban Outfitters Inc URBN

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Demand Resurgence Boosted No-Moat Urban Outfitters’ Profitability in Q1; Shares Look Pricey

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Propelled by vaccinations, government stimulus, and pent-up demand, no-moat Urban Outfitters’ profit margins soared past our expectations in first-quarter 2021, sending its shares up about 7% in post-market trading. Like rivals no-moat Macy’s and no-moat Kohl’s, Urban Outfitters benefitted from minimal discounting as consumers returned to stores and continued to shop online and many retailers entered the year with low inventories. We expect to raise our per-share fair value estimate of $29 on Urban Outfitters by a high-single-digit percentage but view its shares as overvalued.

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Company Profile

Business Description

Founded in 1970, Philadelphia-based Urban Outfitters is an apparel and home goods retailer that operates more than 600 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.

Contact
5000 South Broad Street
Philadelphia, PA, 19112-1495
T +1 215 454-5500
Sector Consumer Cyclical
Industry Apparel Retail
Most Recent Earnings Apr 30, 2021
Fiscal Year End Jan 31, 2022
Stock Type Cyclical
Employees 19,000

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