It's been tough going out there for retailers. Just last week, Macy's (M) disappointed immensely and blamed the Polar Vortex, while JC Penney (JCP) shares fell despite an earnings beat.
Reuters Their hipper cousin, Urban Outfitters (URBN), will release earnings today, and with shares up 2.57% this afternoon, it looks like it might still be one of the cool kids among investors this season.
In today's Ahead of the Tape, WSJ's Spencer Jakab recapped some fine points about the company, including how it has kept ahead of its peers, and writes:
The owner of Anthropologie and Free People, as well as its namesake Urban Outfitters brand, is a slightly different creature than its U.S. peers. Having opened its first two stores next to Ivy League colleges, it always has eschewed mall rats for an older, more sophisticated clientele. It also has a much stronger e-commerce operation than most.
However, it isn't all rosy. Jakab continues:
Even so, shareholders have been losing patience with that distinction. Fiscal second-quarter results due Monday may not inspire a change of heart. Analysts forecast per-share earnings of 48 cents, down from 51 cents in the same period a year before. The projection has dropped from 57 cents at the start of the year following disappointing guidance in March and soggy results in May.
JPMorgan’s Brian Tunick and Kate Fitzsimons says the “risk/reward skews favorable.” They explain why:
With shares trading at a slight discount to historical levels (16x the Street FY15 estimate of $2.28 vs. the 3/5-YR average of 17x), Urban Outfitters risk/reward skews favorable as investors could begin to gain confidence that the UO turnaround is taking hold in the near term. For longer-term investors, we'd view a pullback in the mid-$30s as an attractive entry point.
Urban Outfitters will report second-quarter earnings at 5:00.
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