Sterne Agee Cuts Urban Outfitters' Estimates

In a research report published today, Sterne Agee has lowered Urban Outfitters'

estaimtes due to higher SG&A spend, regardless of inventories being in better shape. Sterne Agee commented in the report, “There are some merchandise bright spots in women's including dresses across all brands and casual bottoms and knits at Anthropologie, Moreover, the lack of clearance may be a negative on comps short term at Anthropologie. Further, SG&A is expected to rise high teens this year due to the investment spending planned in DTC, International and Marketing. While we project improvement in gross margins in each quarter, we are adjusting our estimates to $1.46 and $1.71 for FY13 and FY14 from $1.44 and $1.81. Our Q1 estimate is cut to $0.21 from $0.25. Our Neutral stance is maintained along with our $28 target based upon 16.4x forward.” Urban Outfitters closed yesterday at $29.51.