Urban Outfitters Stock Surges After Q3 Earnings Beat: Retail Sentiment Upbeat

Urban Outfitters ($URBN) stock surged over 16% on Wednesday morning after the company reported better-than-expected third-quarter (Q3) earnings, driving retail sentiment up.

Philadelphia-based lifestyle retailer posted earnings per share (EPS) of $1.10 on revenue of $1.36 billion, above analyst estimates.  The company's sales improved on the back of a "remarkably resilient" consumer, Urban Outfitters CEO Richard A. Hayne, said during a conference call. 

Comparable store sales were up 1.5% year-on-year. The figure included a 5.8% jump at Anthropologie stores while Free People saw growth of 5.3%. However, comparable sales at Urban Outfitters declined 8.9%. The rise in retail segment comparable net sales was driven by low single-digit positive growth in both digital channel sales and retail store sales, the company said.

The company also received an upgrade from Citi following the strong results and confidence the firm has in the company's financial trajectory. The firm also noted the recovery potential in its flagship brand. 

Retail sentiment on the stock turned 'extremely bullish' (95/100) from 'bearish' (42/100) a day ago. Message volumes improved as well, moving to 'extremely high' zone from 'high.'

URBN sentiment and message volumes on Nov 27 as of 9:40 am ET

Urban Outfitters also said the company was expecting a sequential improvement in comparable sales and margins for the next quarter. 

“We are pleased to announce record third quarter sales and earnings, both of which exceeded our expectations. These results were driven by outperformance across all three business segments – Retail, Subscription and Wholesale,” Richard A. Hayne, CEO of the company said. “Additionally, we're optimistic about the outlook for Holiday demand and believe total comparable sales could be similar to our third quarter results.” 

Urban Outfitters stock is up 29.11% year-to-date. 

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