Stifel Maintains Urban Outfitters (URBN) at 'Buy'; Weakness at Anthropologie Easy to Remedy

Stifel reaffirms its Buy rating and $50 price target on Urban Outfitters (Nasdaq: URBN) following the retailers Q1 report on Monday night.

Analyst Richard Jaffe noted that URBN posted Q1 EPS of $0.25, versus the firm's outlook for $0.30. The analyst commented, Continued strength at Free People combined with improvement at the Urban Outfitters brand was offset by weaker than expected results at Anthropologie due to select merchandise misses.

Jaffe noted that Anthropologie's retail comps increased 3 percent, versus Stifel's 4 percent growth estimate. The analyst said, Sales trends slowed significantly in the last two weeks of April, following a strong start to the quarter. Weaker than expected results were driven by merchandise misses in dresses (misses in a few key silhouettes, fabrics and price points, as well as insufficiently addressing the company’s more casual customer) and a missed opportunity in accessories given the sizable market that this category represents.

But, Jaffe doesn't see weakness at Anthropologie lasting that much longer and believes the segment's issues are easy to remedy.

For an analyst ratings summary and ratings history on Urban Outfitters click here. For more ratings news on Urban Outfitters click here.

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