Urban Outfitters goes from Wall Street zero to hero
Has co-founder Richard Hayne righted the ship?
Shares of the Philadelphia company are on the move Tuesday morning, gaining almost 6% and building on momentum from Monday when it said in an SEC filing that fourth-quarter trends appeared to be positive. It added that comparable sales growth thus far was in the high single digits.
This marks an improvement from the last quarter, when sales at stores opened at least a year fell 1%. It also was better than what analysts had expected. Ironically, the company will no longer report these figures, which many consider to be a key metric for retailers, starting in the next fiscal year.
Co-founder Richard Hayne, who replaced Senk, has begun to bring back shoppers previously turned off by the ugly designs the chain was peddling. During the last quarter, Urban Outfitters even boosted gross profit margins by 222 basis points to 37.6% as all the company's brands reported gains in sales. Hayne seemed optimistic about the holiday season, though he declined to offer a specific forecast during the company's recent earnings conference call.
Urban Outfitters, whose most recent earnings report disappointed Wall Street, is planning to open about 49 new stores in the current fiscal year, including 10 in the current quarter. The company is forecasting capital expenditures of $190 million to $210 million as it adds stores, expands its corporate headquarters and completes a fulfillment center in Reno, Nev. Hayne may have more tricks up his sleeve.
Wall Street may have underestimated the chain. The average 52-week price target on the stock is $38.92, under where it currently trades. Urban Outfitters isn't a cheap stock, trading at a price-to-earnings ratio of 27.85, near its five-year high, according to Reuters. Any investors interested in buying the stock might want to wait for a pullback in the price or a clearer indication of how the company fared during the holiday season.
The turnaround at Urban Outfitters is encouraging, though it remains a work in progress.
--Jonathan Berr does not own shares of the listed companies. Follow him on Twitter @jdberr
More from Money Now
- Presidential election revives gold fever in US
- Why are gun stocks tumbling?
- Wild horses a headache for US government
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
A basic income policy can actually ensure a decent standard of living for everyone.
- People left $500,000 in coins at airports last year
- How your driving can affect your credit
- Obamacare projected to cost hundreds of billions less
- November jobs report: Winners and losers
- Student loan debt climbs for 5th year in a row
- Wall Street finally notices Bitcoin
- Part-time workers hurt by on-call system
- 5 myths about late payments and your FICO scores
- Auto loan interest rates hit record low
[BRIEFING.COM] A solid November employment report translated into a solid day of gains for the major averages. While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month.
It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr ... More
More Market News
Finding companies set for solid profit increases at a reasonable price is always a winning strategy. By that standard, here are next year's most appealing firms.