Core Insights - Urban Outfitters (URBN) is currently rated as a 1 (Strong Buy) by Zacks, while Deckers (DECK) holds a 4 (Sell) rating, indicating a more favorable investment outlook for URBN [3] - URBN has a forward P/E ratio of 14.25 and a PEG ratio of 1.19, suggesting it is undervalued compared to DECK, which has a forward P/E of 16.83 and a PEG ratio of 6.19 [5][6] - The P/B ratio for URBN is 2.69, significantly lower than DECK's P/B of 6.16, further supporting URBN's position as the superior value option [6][7] Valuation Metrics - URBN's forward P/E ratio of 14.25 indicates a more attractive valuation compared to DECK's 16.83 [5] - The PEG ratio for URBN is 1.19, while DECK's is 6.19, highlighting URBN's better earnings growth potential relative to its price [5] - URBN's P/B ratio of 2.69 contrasts with DECK's 6.16, suggesting URBN is more aligned with traditional value metrics [6] Investment Outlook - The solid earnings outlook for URBN, combined with its favorable valuation metrics, positions it as a more attractive investment compared to DECK [7]

Retail Industry Overview - U.S. retail sales declined for the second consecutive month in May, falling 0.9% month over month to $715.4 billion, marking the steepest decline since January [1][8] - The decline in retail activity was primarily driven by a 3.5% drop in motor vehicle purchases, alongside notable decreases in building materials (down 2.7%) and gasoline (down 2%) [2][8] - More than half of the 13 major retail categories tracked reported lower sales in May, indicating broader weakness in consumer spending [2] Consumer Sentiment and Economic Factors - Tariff threats and geopolitical tensions are negatively impacting consumer sentiment, suggesting that the earlier spike in sales was a reaction to anticipated economic challenges rather than a sustained spending trend [3] - The current economic uncertainties are prompting a cautious approach among consumers, reflected in the recent retail sales data [3] Investment Opportunities in Retail Stocks - Companies such as Sprouts Farmers Market, Urban Outfitters, BJ's Wholesale Club, and Costco are identified as better positioned to navigate shifts in consumer behavior due to their strategic initiatives [3][8] Company-Specific Insights Sprouts Farmers Market (SFM) - SFM is focusing on product innovation, competitive pricing, and targeted marketing to expand its customer base and meet evolving consumer preferences [7] - The Zacks Consensus Estimate for SFM indicates a projected growth of 13.7% in sales and 35.5% in earnings per share (EPS) for the current financial year [8] Urban Outfitters (URBN) - URBN is leveraging its multi-brand strength and digital reach, with major brands showing momentum across both digital and physical channels [10] - The Zacks Consensus Estimate for URBN suggests growth of 8.5% in sales and 22.2% in EPS for the current financial year [11] BJ's Wholesale Club (BJ) - BJ's Wholesale is focusing on membership growth and digital innovations, enhancing its omnichannel capabilities and customer value [11] - The Zacks Consensus Estimate for BJ indicates growth of 5.5% in sales and 6.2% in EPS for the current financial year [12] Costco (COST) - Costco is effectively navigating market fluctuations through strategic investments and a strong emphasis on its membership model [13] - The Zacks Consensus Estimate for Costco forecasts growth of 8% in sales and 12% in EPS for the current financial year [14]

Group 1 - Urban Outfitters (URBN) has reached a key level of support and crossed above the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average (SMA) is favored by traders as it smooths out short-term price trends and provides trend reversal signals [2][3] - URBN has moved 12.8% higher over the last four weeks and is currently rated as a Zacks Rank 1 (Strong Buy) stock [5] Group 2 - Positive earnings estimate revisions support the bullish case for URBN, with no estimates decreasing in the past two months and six estimates increasing [5] - The consensus estimate for URBN has also increased, suggesting potential for further gains [6]

Core Insights - Urban Outfitters Inc. (URBN) reported a strong start to fiscal 2026, with gross profit rising 19.8% year over year to a record $489.1 million, resulting in a gross margin of 36.8%, an expansion of 278 basis points from the prior year [1][9] - The company achieved a core margin increase of 204 basis points, driven by lower markdowns in the Retail segment and reduced delivery costs [2] - Operating income surged 72% to $128.2 million, with the operating margin increasing 340 basis points to 9.6% of sales, supported by strong full-price selling and disciplined inventory management [3] Financial Performance - Management expects the second-quarter gross margin to improve by 50-100 basis points year over year, with confidence in achieving a 10% operating margin goal for fiscal 2026 [4] - URBN's shares have rallied 38.4% in the past three months, outperforming the broader Retail-Wholesale sector and the S&P 500 index [6] - The stock is currently trading 10.3% below its 52-week high of $75.80, with technical indicators showing strong performance [9][10] Valuation and Estimates - URBN is trading at a forward 12-month price-to-sales ratio of 0.99, below the industry average of 1.65, indicating potential for investors [13] - The Zacks Consensus Estimate for earnings has been revised upward, with current fiscal year estimates at $4.96 per share, reflecting year-over-year growth of 22.2% [15] - Sales estimates for the current and next fiscal years are pegged at $6.02 billion and $6.42 billion, implying year-over-year growth of 8.5% and 6.6%, respectively [17]

Core Insights - The article discusses the importance of a hybrid investing strategy, particularly the GARP (Growth at a Reasonable Price) approach, in navigating market uncertainties and achieving better investment outcomes [1][2]. GARP Strategy - GARP combines principles of both growth and value investing, focusing on stocks that are undervalued yet have sustainable growth potential [4]. - The PEG (Price/Earnings Growth) ratio is a key metric in GARP investing, helping to identify stocks with solid future potential by relating P/E ratios to future earnings growth rates [5][6]. Stock Analysis - Four stocks are highlighted as successful examples of the GARP strategy: Flex Ltd. (FLEX), CVS Health (CVS), Urban Outfitters (URBN), and Exelixis (EXEL) [3][11]. - FLEX has a historical growth rate of 35.1% and a Zacks Rank of 2, indicating strong potential [12]. - CVS Health has a long-term expected growth rate of 11.4% and also holds a Zacks Rank of 2 [14]. - Urban Outfitters has a 20% earnings growth rate over the last five years and a Zacks Rank of 1, making it a strong GARP candidate [15]. - Exelixis boasts a long-term expected earnings growth rate of 21.2% and a Zacks Rank of 2 [17]. Screening Criteria - The stocks selected for GARP investment must have a PEG ratio below the industry median, a solid earnings outlook, and a Zacks Rank of 1 or 2 [8][9]. - Additional criteria include a market capitalization greater than $1 billion and an average 20-day trading volume exceeding 50,000 [9][10].

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even though momentum is a popular stock char ...

Group 1 - Urban Outfitters (URBN) has a Zacks Rank of 1 (Strong Buy), indicating a strong earnings estimate revision trend, while Boot Barn (BOOT) has a Zacks Rank of 4 (Sell) [3] - The Value category of the Style Scores system evaluates companies based on key metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to determine fair value [4] - URBN has a forward P/E ratio of 14.07 and a PEG ratio of 1.17, while BOOT has a forward P/E of 25.89 and a PEG ratio of 1.90, suggesting URBN is more undervalued [5] Group 2 - URBN's P/B ratio is 2.64 compared to BOOT's P/B of 4.38, further indicating URBN's superior valuation metrics [6] - URBN's improving earnings outlook enhances its attractiveness in the Zacks Rank model, positioning it as a better value option compared to BOOT [7]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at ...

Sales Performance - Retail segment net sales accounted for approximately 85.0% of consolidated net sales for the three months ended April 30, 2025, down from 88.5% for the comparable period in fiscal 2025 [81]. - Subscription segment net sales accounted for approximately 9.4% of consolidated net sales for the three months ended April 30, 2025, compared to approximately 6.5% for the comparable period in fiscal 2025 [94]. - Wholesale segment net sales accounted for approximately 5.6% of consolidated net sales for the three months ended April 30, 2025, compared to 5.0% for the comparable period in fiscal 2025 [95]. - Net sales for the first quarter of fiscal 2026 were $1.33 billion, an increase of $128.8 million from $1.20 billion in the first quarter of fiscal 2025 [101]. - Retail segment comparable net sales increased by 4.8%, driven by higher store traffic and transactions, with notable increases of 6.9% at Anthropologie, 3.1% at Free People, and 2.1% at Urban Outfitters [102]. - Subscription segment net sales increased by 59.5%, primarily due to a 52.9% increase in the average number of active subscribers [103]. Store Expansion - Total company-owned stores increased from 733 to 744 from January 31, 2025, to April 30, 2025, with 13 new stores opened [89]. - Projected total company-owned stores for fiscal 2026 is expected to reach 780, with 64 new openings planned [93]. - Capital expenditures during fiscal 2026 are anticipated to be approximately $240 million, primarily for retail store expansion and technology investments [116]. Inventory and Expenses - Total inventory increased by $84.8 million, or 14.6%, to $663.8 million as of April 30, 2025 [105]. - Selling, general and administrative expenses increased by $27.1 million, or 8.1%, but decreased as a percentage of net sales to 27.2% [106]. Profitability - Gross profit increased to $489.1 million in the first quarter of fiscal 2026 from $408.4 million in the first quarter of fiscal 2025, with a gross profit percentage of 36.8% [104]. - Income from operations was $128.2 million, or 9.6% of net sales, compared to $74.6 million, or 6.2% of net sales, for the same period last year [107]. - The effective tax rate for the first quarter of fiscal 2026 was 21.4%, down from 23.6% in the first quarter of fiscal 2025 [108]. Segment Performance - North American Retail segment net sales for Anthropologie accounted for approximately 48.6% of total Retail segment net sales for the three months ended April 30, 2025, compared to approximately 47.8% for the comparable period in fiscal 2025 [84]. - North American Retail segment net sales for Free People accounted for approximately 23.8% of total Retail segment net sales for the three months ended April 30, 2025, compared to approximately 23.6% for the comparable period in fiscal 2025 [85]. - North American Retail segment net sales for Urban Outfitters accounted for approximately 14.8% of total Retail segment net sales for the three months ended April 30, 2025, down from approximately 16.8% for the comparable period in fiscal 2025 [86]. - Selling square footage for Urban Outfitters decreased by 3.9% from April 30, 2024, to April 30, 2025 [91]. - The Free People brand's selling square footage increased by 4.7% from April 30, 2024, to April 30, 2025 [91]. Future Growth Strategies - The company plans to expand its digital channels both domestically and internationally to drive future growth [92].

Financial Data and Key Metrics Changes - For FY 2025, the company achieved an impressive 8% revenue growth, adding nearly $400 million to reach a record of $5.6 billion [14] - Gross profit margin increased by 122 basis points, leading to a 22% rise in operating profit [14] - Earnings per share (EPS) rose by 26% to $4.06, marking FY 2025 as the most profitable year in the company's history [14] - The first quarter of FY 2026 started strong with an 11% revenue growth and a 78% increase in EPS [14] Business Line Data and Key Metrics Changes - Anthropologie and Free People, the two larger brands, continued to grow their revenues and maintain healthy mid-teen operating margins [17] - FB Movement is outpacing its sister brand due to new store openings and strong wholesale demand [17] - Nuuly, the women's apparel rental business, is recognized as a high-growth concept with profitability and scaling potential [17] Market Data and Key Metrics Changes - Urban Outfitters North America showed steady progress with positive comparable sales for the quarter and a significant increase in new full-price customers [17] - In Europe, Urban Outfitters experienced strong comparable sales gains, resulting in increased profitability [18] Company Strategy and Development Direction - The company is focused on attracting new customers, retaining loyal ones, and growing market share across all brands [16] - There is a commitment to monitoring supply chain risks and global uncertainties while aiming for continued revenue growth and margin expansion [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue growing revenue and expanding margins for the full year and beyond [19] - Despite broader economic uncertainties, customer demand remains strong, with no signs of a slowdown observed [15] Other Important Information - The company has prepared and issued an annual report on Form 10-K, detailing recent operating results and financial condition [12] Q&A Session Summary Question: Are there any questions from shareholders? - There were no questions from shareholders during the meeting [20]