Urban Outfitters Q3 Earnings: Can URBN Hit Its $0.56 EPS Target?

in EARNINGS/INVESTING IDEAS by

Urban Outfitters, Inc. (NASDAQGS:URBN) is scheduled to report Q3 earnings results on November 19, 2019 at 5:15 PM EST. The company is expected to report earnings of $0.56/share on revenue of $998 million.

The consensus earnings per share (EPS) of $0.56/share is based on a poll of 18 analysts and represents a decline of -20.0% over the same quarter last year when the company reported earnings of $0.70/share. The revenue forecast of $998 million based on a poll of 16 analysts implies a year-over-year (YoY) growth of 2.5%. Last year the company reported $973.5 million in revenue for the quarter.

Expected to report EPS decline of -$0.14/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $998.05 $973.53 2.5%
EPS $0.56 $0.70 -20.0%

Earnings Call Trends

The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance. What are your expectations from Urban Outfitters for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.57 $0.61 7.0% Beat
Q1, 2020 $0.25 $0.31 24.0% Beat
Q4, 2019 $0.79 $0.83 5.3% Beat
Q3, 2019 $0.63 $0.70 11.1% Beat
Q2, 2019 $0.78 $0.84 7.7% Beat
Q1, 2019 $0.30 $0.38 25.7% Beat
Q4, 2018 $0.64 $0.69 8.3% Beat
Q3, 2018 $0.33 $0.41 24.2% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Urban Outfitters’s stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 31, 2019, the stock price reacted by increasing by 7.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-20 $20.85 $22.36 7.2% Increase
2019-05-21 $26.95 $24.34 -9.7% Decline
2019-03-05 $30.20 $30.32 0.4% Increase
2018-11-19 $37.04 $36.58 -1.2% Decline

Fundamentals And Technical Analysis

Urban Outfitters is currently trading at $28.56/share, down -5.3% for the day. The company is trading at approximately 68.4% of its 52-week high of $41.77/share. The company’s stock price is up 37.0% since the last earnings report and down -2.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.14 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

URBN-Stock-Price.png

The current share price implies a price-to-earnings (P/E) multiple of 11.7x and a forward P/E multiple of 13.1x. Urban Outfitters’s current share price also implies a price-to-book (P/B) multiple of 2.2x. The following table summarizes some other key fundamental ratios:

Data as of November 19, 2019
Metric Value
Last Fiscal Period FY2020.Q2
Period End Date July 31, 2019
Stock Price (Current) $28.56
P/E Ratio 11.7x
P/E Ratio (Fwd) 13.1x
PEG Ratio 1.8
Total Debt to Capital (%) 30.2%
Levered Free Cash Flow $113.3 million
Enterprise Value / EBITDA 9.0x

Company Profile: Urban Outfitters, Inc.

Urban Outfitters, Inc. is a mid-cap stock with a market capitalization of $2.955 billion and a total enterprise value of $3.921 billion. The company operates in the Consumer Discretionary sector and Specialty Retail industry.

Urban Outfitters engages in the retail and wholesale of general consumer products. The company operates in two segments, Retail, and wholesale. It operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women’s casual apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45.

The company also operates Bhldn stores, which offer heirloom-quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations; and Terrain stores that provide lifestyle home products, garden, and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants.

The company serves its customers directly through retail stores, Websites, mobile applications, catalogs, franchised or third-party operated stores, and digital businesses. As of January 31, 2019, it operated 245 Urban Outfitters, 227 Anthropologie Group, and 135 Free People stores in the United States, Canada, and Europe; and 13 restaurants. The company is also involved in the wholesale of young women’s contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and home goods under the Anthropologie brand to approximately 2,200 department and specialty stores worldwide.

Urban Outfitters was founded in 1970 and is based in Philadelphia, Pennsylvania.

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