Urban Outfitters Earnings: Investors Don’t Like This Number

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S&P 500 (NYSE:SPY) component Urban Outfitters Inc. (NASDAQ:URBN) reported its results for the third 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 $59.5 million (40 cents per share) vs. $50.7 million (33 cents per share) in the same quarter a year earlier. This marks a rise of 17.4% from the year-earlier quarter.

Revenue: Rose 13.6% to $692.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Urban Outfitters Inc. fell short of the mean analyst estimate of 41 cents per share. It beat the average revenue estimate of $578.5 million.

Quoting Management: “Favorable customer response to our product offerings and better marketing resulted in record third quarter sales and significant margin improvement,” said Chief Executive Officer, Richard A. Hayne. “We see this trend continuing into the fourth quarter which bodes well for our Holiday season,” finished Mr. Hayne.

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 11% to $676.3 million in the second quarter. The figure rose 8.6% in the first quarter from the year earlier and climbed 9.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 9 cents, and in the first quarter, it was ahead by 3 cents.

Margins increased in the second quarter after dropping the quarter before. Gross margin grew 2.2 percentage points from the year-earlier quarter to 37.6%. In the first quarter, the figure rose 0.3 percentage point to 37.6% from the year earlier quarter.

Net income has dropped 13% year-over-year on average across the last five quarters. Performance was hurt by a 47.8% decline in the fourth quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 52 cents per share, up from 50 cents ninety days ago. For the fiscal year, the average estimate has moved up from $1.47 a share to $1.58 over the last ninety days.

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

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