Urban Outfitters' stock slumped 10% due to soft comp sales and challenges in Q2

From Nasdaq: 2024-08-26 22:36:47

Urban Outfitters (URBN) stock fell 9.6% on August 22, due to soft comp sales and challenges in Q2. The company expects Q3 sales to increase mid-single-digits y-o-y, with gross margins contracting by 100 basis points. URBN’s stock price of $38 aligns with Trefis’ valuation, forecasting $5.5 billion revenue in FY’25, up 6% y-o-y.

In Q2, URBN’s revenues grew 6% to $1.35 billion, driven by 2% comp sales growth. Free People and Anthropologie saw positive comp sales, while Urban Outfitters experienced a larger-than-expected decline. NUULY subscription sales jumped 63% y-o-y. Gross margin increased to 36.5% in Q2, boosting adjusted profits to $1.24 per share.

From 2021 to now, URBN stock has seen fluctuating returns. Despite outperforming the S&P 500 in 2023, it underperformed in 2021. Consistently beating the S&P has been challenging for many stocks. With the current macroeconomic environment posing uncertainties, URBN may face challenges ahead in the market.



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