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Category: Stock Market and Urban Outfitters (URBN)
Date: 8 July 2020 Stock Price of Urban Outfitters: $16.50 We take a look at the 1st quarter 2021 earnings report of Urban Outfitters a lifestyle-orientated and general merchandise and consumer products group with a portfolio of global consumer brands. The group has been hit hard by the Covid-19 pandemic with total sales for the quarter declining 31.9% compared to the previous year.
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I am incredibly proud of our teams for their hard work, dedication and resilience over the last two months. The actions we’ve taken during the quarter to strengthen our balance sheet and help preserve liquidity provides us with financial flexibility during this difficult period said Richard A. Hayne , Chief Executive Officer "
About Urban Outfitters
Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 249 Urban Outfitters stores in the United States, Canada and Europe and websites; 231 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 143 Free People stores in the United States, Canada and Europe, catalogs and websites, 11 Food and Beverage restaurants, 5 Urban Outfitters franchisee-owned stores, 1 Anthropologie Group franchisee-owned store and 1 Free People franchisee-owned store, as of October 31, 2019. Free People, Anthropologie Group and Urban Outfitters wholesale sell their products through approximately 2,200 department and specialty stores worldwide, digital businesses and the Company’s Retail segment.
Overview of Urban Outfitters' 1st quarter 2021 earnings report
The data refers to the latest quarter unless specified otherwise
- Total revenues: $588.483 million (down from $864.413 million for the same quarter of the previous year)
- Total revenues decreased by -31.9% over the last 12 months
- Cost of sales: $562.112 million (down from $595.357 million for the same quarter of the previous year)
- Cost of sales decreased by -5.6% over the last 12 months
- Some margin squeezed being experienced as revenues declined at a lot faster rate than their cost of sales
- Net loss: -$138.442 million (down from $32.585 million for the same quarter of the previous year)
- Diluted loss per share: -$1.41 (down from $0.31 for the same quarter of the previous year)
- PE ratio of Urban Outfitters: Since the group is currently loss making no PE can be calculated
- Diluted shares in issue: 97.910 million (down from 105.340 million for the same quarter of the previous year)
- Cash and cash equivalents: $588.740 million
- Cash and equivalents per share: $6.01
- Cash and equivalents makes up 36.4% of Urban Outfitters market capital
- Cash and equivalents makes up 17.5% of Urban Outfitters total assets
- Inventories of Urban Outfitters: $335.640 million
- Inventories makes up 10% of Urban Outfitters total assets
- Stockholders equity in Urban Outfitters: $1.298 billion
- Stockholders equity per Urban Outfitters stock: $13.25
- So Urban Outfitters is trading at 1.24 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms then to trade at
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
Urban Outfitters management commentary on their 1st quarter 2021 earnings
PHILADELPHIA, May 19, 2020 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands comprised of Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters and Nuuly brands and the Menus & Venues division, today announced a preliminary net loss of $138 million and preliminary loss per diluted share of $1.41 for the three months ended April 30, 2020.
The impact of the coronavirus pandemic (COVID-19) on the Company’s business has resulted in the need to perform impairment assessments of the Company’s long-lived assets. These preliminary financial results include a provisional impairment expense and the corresponding tax effects, all of which are currently being evaluated. While these items are non-cash in nature, a potential change to the provisional impairment expense could materially impact the reported results
The impact of the coronavirus pandemic (COVID-19) on the Company’s business has resulted in the need to perform impairment assessments of the Company’s long-lived assets. These preliminary financial results include a provisional impairment expense and the corresponding tax effects, all of which are currently being evaluated. While these items are non-cash in nature, a potential change to the provisional impairment expense could materially impact the reported results
During the three months ended April 30, 2020, the Company opened a total of four new retail locations including: two Anthropologie Group stores and two Urban Outfitters stores; and closed one Urban Outfitters store. During the three months ended April 30, 2020, no franchisee-owned stores were opened or closed.
“I am incredibly proud of our teams for their hard work, dedication and resilience over the last two months. The actions we’ve taken during the quarter to strengthen our balance sheet and help preserve liquidity provides us with financial flexibility during this difficult period,” said Richard A. Hayne , Chief Executive Officer. “I’m confident our proven ability to execute our multi-channel, multi-brand, and multi-category strategy will ensure our future success,” finished Mr. Hayne.
“I am incredibly proud of our teams for their hard work, dedication and resilience over the last two months. The actions we’ve taken during the quarter to strengthen our balance sheet and help preserve liquidity provides us with financial flexibility during this difficult period,” said Richard A. Hayne , Chief Executive Officer. “I’m confident our proven ability to execute our multi-channel, multi-brand, and multi-category strategy will ensure our future success,” finished Mr. Hayne.
Urban Outfitters (URBN) stock price history
The image below, obtained from Google shows the stock price history of Urban Outfitters (NASDAQ: URBN) for the last 5 years and it's not been a good time for Urban Outfitters stockholders over the last 5 years. 5 years ago the stock was trading at $35.40 and its currently trading at $16.50. That's a loss of -53.4% suffered by Urban Outfitters stockholders over the last 5 years.
The stock of Urban Outfitters is trading at closer to its 52 week low of $12.28 than it is to its 52 week high of $31.41 which to us in an indication that the short term sentiment and momentum of Urban Outfitters stock is negative at this point in time.
The stock of Urban Outfitters is trading at closer to its 52 week low of $12.28 than it is to its 52 week high of $31.41 which to us in an indication that the short term sentiment and momentum of Urban Outfitters stock is negative at this point in time.
Urban Outfitters (URBN) vs Buckle Inc (BKE)
The image below shows the stock price performance of Urban Outfitters (URBN) and Buckle (BKE) over the last 3 years. Both firms are active in the clothing and accessories sector and their share price performances are very similar. Over the three year period the stock of Urban Outfitters (URBN) declined by -5.5% while the stock of Buckle (BKE) declined by -0.5%
Recent coverage of Urban Outfitters (URBN)
The extract below covers the latest regarding Urban Outfitters as obtained from Forbes.com
Choose Urban Outfitters, Not Children’s Place
Urban Outfitters’ stock (NASDAQ: URBN) has declined by over 20% since the end of 2017, which has been a difficult period for the investors, while The Children’s Place stock (NASDAQ: PLCE) has lost more than 55% of its value over the same time period. Notably, Urban Outfitters’ 12% revenue growth rate over the last two years isn’t too different from the 8% revenue growth rate for The Children’s Place, and their profit margins (net income as a percentage of net revenues) were also quite similar at around 4% in 2019. However, the former’s stock has done much better due to the company’s improving profitability as well as better growth prospects. We believe that Urban Outfitters continues to be the stronger investment, as we highlight in our dashboard Urban Outfitters vs. Children’s Place: Does The Stock Price Movement Make Sense?
While Urban Outfitters’ margin has expanded by 120 basis points over 2017-2019, The Children’s Place has seen this key metric shrink by 60 basis points over the same time frame. Moreover, the pandemic has taken a toll on the entire apparel market, with Urban Outfitters’ stock losing 33% while PLCE’s stock is down 25% in year-to-date 2020. That said, the P/E multiple of both companies is at a multi-year low - indicating that both stocks are currently undervalued.
Read the full article here
Choose Urban Outfitters, Not Children’s Place
Urban Outfitters’ stock (NASDAQ: URBN) has declined by over 20% since the end of 2017, which has been a difficult period for the investors, while The Children’s Place stock (NASDAQ: PLCE) has lost more than 55% of its value over the same time period. Notably, Urban Outfitters’ 12% revenue growth rate over the last two years isn’t too different from the 8% revenue growth rate for The Children’s Place, and their profit margins (net income as a percentage of net revenues) were also quite similar at around 4% in 2019. However, the former’s stock has done much better due to the company’s improving profitability as well as better growth prospects. We believe that Urban Outfitters continues to be the stronger investment, as we highlight in our dashboard Urban Outfitters vs. Children’s Place: Does The Stock Price Movement Make Sense?
While Urban Outfitters’ margin has expanded by 120 basis points over 2017-2019, The Children’s Place has seen this key metric shrink by 60 basis points over the same time frame. Moreover, the pandemic has taken a toll on the entire apparel market, with Urban Outfitters’ stock losing 33% while PLCE’s stock is down 25% in year-to-date 2020. That said, the P/E multiple of both companies is at a multi-year low - indicating that both stocks are currently undervalued.
Read the full article here
Urban Outfitters (NASDAQ: URBN) latest stock valuation
So what is Urban Outfitters stock worth based on their 1st quarter 2021 earnings report? Based on Urban Outfitters latest earnings report our valuation model provides a target price (full value price) for Urban Outfitters at $26.40 a stock. We therefore believe the stock of Urban Outfitters is undervalued
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $26.40, thus a good entry point into Urban Outfitters would be at $23.80 or below.
We expect the stock of Urban Outfitters to recover from the significant drop in its stock price due to the Covid-19 pandemic as states and economies across the world starts opening up again following Covid related lockdowns and stay at home orders.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $26.40, thus a good entry point into Urban Outfitters would be at $23.80 or below.
We expect the stock of Urban Outfitters to recover from the significant drop in its stock price due to the Covid-19 pandemic as states and economies across the world starts opening up again following Covid related lockdowns and stay at home orders.
Next earnings release for Urban Outfitters
It is expected that Urban Outfitters will release their 2nd quarter 2021 earnings report in mid August 2020