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Category: Stock Market and Urban Outfitters
Date: 20 November 2019 Stock Price: $28.79 We take a look at the 3rd quarter 2020 earnings report of Urban Outfitters a lifestyle-orientated and general merchandise and consumer products group with a portfolio of global consumer brands. The stock declined by 16% in after hours trade following the release of their 3rd quarter 2019 results
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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' 3rd quarter 2020 earnings report
The data refers to the latest quarter unless specified otherwise
- Total revenues: $987.469 million (up from $973.533 million for the same quarter of the previous year)
- Total revenues increased by 1.4% over the last 12 months
- Cost of sales: $666.367 million (up from $635.835 million for the same quarter of the previous year)
- Cost of sales increased by 4.8% over the last 12 months
- Some margin squeezed being experienced as revenues grew at a lower rate than cost of sales.
- Net earnings: $55.652 million (down from $77.520 million for the same quarter of the previous year)
- Diluted earnings per share: $0.56 (down 20% from $0.70 for the same quarter of the previous year)
- PE ratio of Urban Outfitters: 12.4
- Diluted shares in issue: 98.628 million (down 10.6% from 110.262 million for the same quarter of the previous year)
- So earnings per share declined by 20% from the same quarter of last year and this while the amount of shares in issue declined by 10.6% which is a good thing as future earnings are divided by less shares n in issue. So even with almost 11% less shares in issue the earnings per Urban Outfitters share declined by 20%. It's no real surprise then that the stock of Urban Outfitters plummeted yesterday after their earnings release. A similar phenomenon was experienced by Kohl's one of the largest retailers in the USA.
- Cash and cash equivalents: $167.070 million
- Cash and equivalents per share: $1.69
- Cash and equivalents makes up 5.8% of Urban Outfitters market capital
- Cash and equivalents makes up 5.03% of Urban Outfitters total assets
- Inventories:: $531.565 million
- Urban Outfitters inventories increased by 17.69% over the last 12 months. This is a worrying number as the question has to be asked whether the inventories are building up due to stock moving slowly or whether the group is expect strong sales in coming quarters and are keeping larger inventories to accommodate stronger sales
- Inventories makes up 16% of Urban Outfitters total assets
- Stockholders equity in Urban Outfitters: $1.429 billion
- Stockholders equity per Urban Outfitters stock: $14.48
- So Urban Outfitters is trading at 1.98 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
Urban Outfitters's management commentary on their 3rd quarter 2020 earnings
PHILADELPHIA, Nov. 19, 2019 (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 Food and Beverage division, today announced net income of $56 million and $149 million for the three and nine months ended October 31, 2019, respectively. Earnings per diluted share were $0.56 and $1.47 for the three and nine months ended October 31, 2019, respectively.
“I’m pleased to report record third quarter sales, driven by better reaction to our apparel assortments and strength in the digital channel,” said Richard A. Hayne, Chief Executive Officer. “Looking ahead to Q4, we’re encouraged by positive sales-to-date but realize our highest volume days have yet to be written,” finished Mr. Hayne.
On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. During the nine months ended October 31, 2019, the Company repurchased and subsequently retired 8.1 million common shares for approximately $217 million under this program. During the year ended January 31, 2019, the Company repurchased and subsequently retired 3.5 million common shares for approximately $121 million under this program. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a new share repurchase program. As of October 31, 2019, 26.3 million common shares were remaining under the programs
On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program. During the nine months ended October 31, 2019, the Company repurchased and subsequently retired 8.1 million common shares for approximately $217 million under this program. During the year ended January 31, 2019, the Company repurchased and subsequently retired 3.5 million common shares for approximately $121 million under this program. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a new share repurchase program. As of October 31, 2019, 26.3 million common shares were remaining under the programs
Urban Outfitters' 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 $31.50 and its currently trading at $28.79. That's a loss of -8.6% suffered by Urban Outfitters stockholders over the last 5 years. The stock of Urban Outfitters is trading at close to the midpoint between its 52 week high and its 52 week ow which to us in an indication that the short term sentiment and momentum of Urban Outfitters stock is neutral at this point in time.
However Urban Outfitters' stock lost 16.2% in after hours trade as the image below shows, following the release of their latest earnings report.
However Urban Outfitters' stock lost 16.2% in after hours trade as the image below shows, following the release of their latest earnings report.
Recent coverage of Urban Outfitters
The extract below covers the latest regarding Urban Outfitters as obtained from TheStreet.com
Shares of Urban Outfitters Inc. (URBN - Get Report) fell sharply in after-hours trading Tuesday after the retailer reported disappointing third-quarter results. The company reported earnings of 56 cents a share on sales of $987 million. Analysts surveyed by FactSet had expected the company to make 57 cents a share on sales of $1 billion.
In the same period a year ago, the company posted earnings of 70 cents a share on sales of $973.5 million. The stock fell $4.05, or 14%, to $24.75 in after-hours trading. The stock had risen more than 40% since the company last reported earnings on Aug. 20. Urban Outfitters said its gross profit rate fell by 217 basis points vs. the same period last year. The decrease "was driven by higher markdowns, deleverage in delivery and logistics expenses and lower Wholesale segment margins," the company said in a statement. In the upcoming quarter analysts are forecasting net income of $81.9 million, or 83 cents a share, on sales of $1.2 billion.
Read the full article here
Shares of Urban Outfitters Inc. (URBN - Get Report) fell sharply in after-hours trading Tuesday after the retailer reported disappointing third-quarter results. The company reported earnings of 56 cents a share on sales of $987 million. Analysts surveyed by FactSet had expected the company to make 57 cents a share on sales of $1 billion.
In the same period a year ago, the company posted earnings of 70 cents a share on sales of $973.5 million. The stock fell $4.05, or 14%, to $24.75 in after-hours trading. The stock had risen more than 40% since the company last reported earnings on Aug. 20. Urban Outfitters said its gross profit rate fell by 217 basis points vs. the same period last year. The decrease "was driven by higher markdowns, deleverage in delivery and logistics expenses and lower Wholesale segment margins," the company said in a statement. In the upcoming quarter analysts are forecasting net income of $81.9 million, or 83 cents a share, on sales of $1.2 billion.
Read the full article here
Urban Outfitters (NASDAQ: URBN) latest stock valuation
So what is Urban Outfitters stock worth based on their 3rd quarter 2020 earnings report? Based on their earnings report our valuation model provides a target (full value) price for Urban Outfitters at $31.30 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 (full value) price, which in this case is $31.30, thus a good entry point into Urban Outfitters would be at $28.20 or below.
We expect the stock of Urban Outfitters to recover from the significant drop after their latest earnings release to levels closer to our target (full value) price in coming weeks and months.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price, which in this case is $31.30, thus a good entry point into Urban Outfitters would be at $28.20 or below.
We expect the stock of Urban Outfitters to recover from the significant drop after their latest earnings release to levels closer to our target (full value) price in coming weeks and months.
Next earnings release for Urban Outfitters
It is expected that Urban Outfitters will release their 4th quarter and full fiscal 2020 earnings report towards the end of February 2020