Urban Outfitters Earnings Have Shares SKYROCKETING

S&P 500 (NYSE:SPY) component Urban Outfitters Inc. (NASDAQ:URBN) reported net income above Wall Street’s expectations for the second quarter. Urban Outfitters is engaged in the general consumer product retail and wholesale business, selling to customers through various channels including retail stores, catalogs and web sites.

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Urban Outfitters Inc. Earnings Cheat Sheet

Results: Net income for Urban Outfitters Inc. rose to $61.3 million (42 cents per share) vs. $56.7 million (35 cents per share) in the same quarter a year earlier. This marks a rise of 8.1% from the year-earlier quarter.

Revenue: Rose 11% to $676.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Urban Outfitters Inc. beat the mean analyst estimate of 33 cents per share. It beat the average revenue estimate of $578.5 million.

Quoting Management: “I am excited and gratified that our team produced record second quarter sales and profits while reducing `comp` store inventories,” said Chief Executive Officer, Richard A. Hayne. “As we head into the second half of the year we plan for gradual year over year improvement in our business along with further tightening of our store inventories,” finished Mr. Hayne.

Key Stats:

Last quarter’s profit increase ends a four-quarter streak of year-over-year profit drops. In the first quarter, net income fell 12.1% from the year earlier, while the figure fell 47.8% in the fourth quarter of the last fiscal year, 30.7% in the third quarter of the last fiscal year and 20.9% in the second quarter of the last fiscal year.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 0.3 percentage point to 37.6% from the year-earlier quarter. In that span, margins have contracted an average of 4.3 percentage points per quarter on a year-over-year basis.

Revenue has risen for the last four quarters. Revenue increased 8.6% to $568.9 million in the first quarter. The figure rose 9.3% in the fourth quarter of the last fiscal year from the year earlier and climbed 6.3% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of 23 cents versus a mean estimate of net income of 20 cents per share.

Looking Forward: Expectations for the third quarter have not changed from 41 cents. Over the past sixty days, the average estimate for the fiscal year has reached $1.47 per share, a decline from $1.48.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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