Urban Outfitters earnings 'cheat sheet'

The retailer's margins contract as its profit drops.

By Wall St. Cheat Sheet Mar 13, 2012 2:03PM

Image: Jewelry store (© Baerbel Schmidt/Getty Images/Getty Images)Rising costs hurt S&P 500 component Urban Outfitters Inc. (URBN) in the fourth quarter as profit dropped from a year earlier. Urban Outfitters is engaged in the general consumer product retail and wholesale business, selling to customers through various channels including retail stores, catalogs and websites.


Here is the "cheat sheet" for Urban Outfitters fourth-quarter earnings report:


Results: Net income for Urban Outfitters fell to $39.3 million (27 cents per share) vs. $75.2 million (45 cents per share) a year earlier. This is a decline of 47.8% from the year-earlier quarter.


Revenue: Rose 9.3% to $730.6 million from the year-earlier quarter.


Actual vs. Wall St. Expectations: Urban Outfitters fell short of the mean analyst estimate of 30 cents per share. Analysts were expecting revenue of $741.4 million.


Quoting Management: "I am pleased that we managed our inventories to appropriate levels at year end even though our margins during the quarter suffered as a result," said Chief Executive Officer, Richard Hayne. "Our rate of full-priced selling has improved from fourth- quarter levels as we seek to re-establish our historic full-price selling penetration."


Key Stats: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 9.5 percentage points to 30.1% from the year-earlier quarter. Over that time, margins have contracted on average 5.4 percentage points per quarter on a year-over-year basis.


Revenue has risen for the last four quarters. Revenue increased 6.3% to $610 million in the third quarter. The figure rose 10.3% in the second quarter from the year earlier and climbed 9.2% in the first quarter from the year-ago quarter.


The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 2 cents, and in the second quarter, it was ahead by 3 cents.


Net income has dropped 25.9% year-over-year on average across the last five quarters. Performance was hurt by a 47.8% decline in the most recent quarter from the year-earlier quarter.


Looking Forward: Expectations for the company's next-quarter results are lower than they have been. Over the past 60 days, the average estimate for first quarter of the next fiscal year has fallen from 26 cents per share to 22 cents. For the fiscal year, the average estimate has moved down from $1.29 a share to $1.22 over the last ninety days.


Competitors to Watch: Abercrombie & Fitch Co. (ANF), The Gap Inc. (GPS) and American Eagle Outfitters (AEO).



More from Wall St. Cheat Sheet:  

Who is Liz Claiborne's New CFO and COO?

Does Las Vegas Have a Full House?

Do Precious Metal Investors Believe QE Will Be Dialed Back?


Derek Hoffman is an editor at Wall St. Cheat Sheet. As of this writing, he did not own a position in any of the aforementioned stocks.
Tags: URBN
0Comments

DATA PROVIDERS

Copyright © 2014 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.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

126
126 rated 1
286
286 rated 2
474
474 rated 3
680
680 rated 4
626
626 rated 5
609
609 rated 6
620
620 rated 7
462
462 rated 8
304
304 rated 9
132
132 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
BIDUBAIDU Inc10
BXTHE BLACKSTONE GROUP L.P10
CELGCELGENE CORP10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.