AP News

Ahead of the Bell: Urban Outfitters


NEW YORK (AP) — A Stifel Nicolaus analyst said that Urban Outfitters' strong quarter-to-date sales are a welcome sight considering that many retailers' sales slowed in early December following the burst of sales over Thanksgiving weekend.

The holiday shopping season is critical for retailers as it can account for up to 40 percent of their revenue for the year.

Last month a record 247 million shoppers visited stores and websites over the four-day period that started on Thanksgiving, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for the National Retail Federation trade group.

Spending over the four-day weekend totaled an estimated $59.1 billion, up 12.8 percent from 2011.

On Monday, Urban Outfitters Inc., which operates Anthropologie, Free People and its namesake stores, said in a regulatory filing that so far during the fourth quarter, its sales in stores open at least a year are increasing in the high single-digit range. That is a key measure of a retailer's financial performance since it strips away the impact of recently opened or closed stores.

Urban Outfitters' stock climbed $2.60, or 7 percent, to $39.60 in premarket trading 90 minutes ahead of the market opening.

Stifel Nicolaus' Richard Jaffe said that the company's quarter-to-date sales are above his forecast for a 5 percent increase. The analyst said that Urban Outfitters' fourth-quarter results should be helped by strict inventory management, better pricing, lower product costs and merchandise improvement.

Jaffe boosted the retailer's fourth-quarter earnings estimate to 55 cents per share from 54 cents per share and raised its full-year estimate to $1.61 per share from $1.60 per share. He maintained a "Buy" rating and $44 price target.

Adrienne Tennant said in a client note on Tuesday that Urban Outfitters' sales results for the quarter to date are better than her estimate for a mid-single-digit percentage increase. The analyst believes Anthropologie stores "look the best we have seen them all year," with better merchandise and fewer and less deep promotions.

Tennant reaffirmed a "Buy" rating.


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