ISI: Hayne's Return to Urban Outfitters Increasing Optimism

In a research report published today by ISI, investors are becoming increasingly more optimistic that Urban Outfitters'

success will be restored now that Robert Hayne's is back in control. According to ISI, “Given his 40+ year track record cultivating its unique brand concepts at industry-leading margins and growth rates, Hayne may have just the magic merchandising touch necessary to execute a successful turnaround at URBN. However, we think the many changes that have transpired across the sector since Hayne's last tenure as CEO could present some subtle challenges that the market may not fully appreciate, including the rapid proliferation of competing styles and channels (fast fashion, athletic, off-price, premium factory outlets), a shift in women's spending patterns away from clothing and toward accessories, and the stubbornly promotional specialty retail environment. To reflect higher promotions this past holiday, we are lowering our 2011 EPS estimate to $1.20 from $1.30.” ISI maintains its Hold rating and $25 PT on Urban Outfitters, which closed yesterday at $29.66.