Try On Urban Outfitters Stock, Not Just Its Clothes (URBN)

Urban Outfitters

reports after the bell today, and analysts are looking for 39 cents per share, on revenues of $542.09 million. A business description for Urban Outfitters describes the company as "Urban Outfitters, Inc. operates lifestyle specialty retail stores under the Urban Outfitters, Anthropologie, Free People, and Terrain brands; and engages in the apparel wholesale business under the Free People and Leifsdottir brands. Its Urban Outfitters stores offer women’s and men’s fashion apparel, footwear, and accessories, as well as gifts and apartment wares, such as rugs, pillows, shower curtains, books, candles, and novelties to young adults." I would expect Urban Outfitters to continue showing growth in its businesses, as last quarter it showed sales were up 25% from a year ago, as consumers started to open their wallets again. It has a pristine balance sheet, with $259 million in cash and no debt. Urban's strong revenue growth was accompanied by margin expansion, with its gross margin up 4.59% from last year. Shares of Urban Outfitters are less pricey than they were, trading at 15 times forward earnings after a drop in shares due to a market correction, but still pricier than its competitors. Last week I profiled Urban Outfitters as one of the stocks to benefit from the back to school trend

Investors may want to look at adding shares of Urban Outfitters if they agree with the thesis that the company will continue to show strong earnings growth and consumers pile into its clothes, as well as its stock. Is URBN a Buy, Sell or Hold? Click