Key Takeaways URBN's retail comps rose 4.8%, with all three brands seeing positive store and digital sales.Wholesale revenues climbed 24.2%, led by Free People and FP Movement's sharp gains.Store expansion and strong full-price sales drove both segment growth and profitability.Urban Outfitters Inc. (URBN) began fiscal 2026 with strong results across retail and wholesale. Retail comparable sales rose 4.8% year over year, with mid-single-digit positive gains in digital channel sales and sales from retail stor ...

Core Insights - Deckers Outdoor Corporation's first-quarter fiscal 2026 performance was driven by strong demand for its flagship brands, HOKA and UGG, with HOKA's revenues increasing by 19.8% year over year to $653.1 million and UGG's revenues growing by 18.9% to $265.1 million [1][9] Brand Performance - HOKA maintained strong momentum with successful product launches, including the Arahi 8, and is expected to continue its growth trajectory with upcoming models such as Mafate 5 and Mach 3 [2] - UGG expanded its product offerings beyond cold-weather items, introducing versatile styles like the PeakMod clog and Lowmel sneaker, aligning with casual fashion trends [3] International Growth - Deckers reported a 49.7% year-over-year increase in international revenues in the first quarter, with both HOKA and UGG contributing significantly [4] Future Projections - For the second quarter of fiscal 2026, Deckers anticipates net sales between $1.38 billion and $1.42 billion, with HOKA expected to grow by 10% and UGG projected to increase in the mid-single digits [4][9] Competitive Landscape - Wolverine World Wide and Urban Outfitters are key competitors in the footwear market, with Wolverine's brands showing strong growth and Urban Outfitters' portfolio delivering positive performance [5][6][7] Valuation Metrics - Deckers shares have declined by 49.9% year to date, compared to a 12.6% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 15.77X, below the industry average of 17.64X, indicating a favorable valuation [11] Earnings Estimates - The Zacks Consensus Estimate for Deckers' fiscal 2026 earnings suggests a year-over-year decline of 1.1%, while fiscal 2027 estimates indicate an 8.3% increase [12]

Core Insights - Deckers Outdoor Corporation (DECK) reported a strong performance in its wholesale business for Q1 fiscal 2026, with wholesale net sales increasing 26.7% year over year to $652.4 million, primarily driven by the HOKA and UGG brands [1][10]. Wholesale Performance - HOKA's wholesale revenues rose 30%, supported by robust sell-in, expanded distribution, and strong reorders, particularly in EMEA and APAC regions [2][10]. - UGG's wholesale revenues also increased by 30% year over year, with notable gains in both domestic and international markets, especially in EMEA and China, due to early fulfillment of fall orders and inventory replenishment [3][10]. - Throughout Q1, sell-through outpaced sell-in across wholesale accounts, indicating effective inventory management and healthy consumer demand [4]. Market Dynamics - The wholesale channel is expected to grow faster than the direct-to-consumer (DTC) channel, driven by evolving consumer preferences for in-person retail experiences and strong partner engagement [5]. - Deckers' ability to align wholesale execution with market demand positions the business for continued momentum through the fiscal year [5]. Competitive Landscape - Key competitors in the wholesale channel include Steven Madden, Ltd. (SHOO) and Urban Outfitters Inc. (URBN) [6]. - Steven Madden's wholesale channel reported a decline of 6.4% year over year, impacted by order cancellations and shipment delays, with a gross margin decrease to 31% [7]. - Urban Outfitters' wholesale channel achieved a 24% revenue increase in Q1 fiscal 2026, driven by strong full-price sales and improved profitability [8]. Valuation and Estimates - Deckers trades at a forward price-to-earnings ratio of 16.05X, below the industry average of 17.43X, with a Value Score of A [12]. - The Zacks Consensus Estimate for DECK's fiscal 2026 earnings implies a year-over-year decline of 1.1%, while fiscal 2027 indicates an uptick of 8.3% [13].

Core Insights - Investors should conduct a thorough analysis of a company's financial background rather than relying solely on real-time stock numbers to make informed investment decisions [1] - The interest coverage ratio is a critical metric that indicates a company's ability to meet its interest obligations, with a higher ratio suggesting better financial health [4][5] Company Performance - Urban Outfitters, Inc. (URBN) has an impressive interest coverage ratio and has gained 56.2% over the past year, with a projected EPS growth of 22.2% [10][12] - Ingredion Incorporated (INGR) also shows strong performance with a Zacks Rank of 2, a VGM Score of A, and a projected EPS growth of 6.8%, having risen 11% in the past year [10][12] - The Walt Disney Company (DIS) carries a Zacks Rank of 2 and has a projected EPS growth of 16.3%, with a stock increase of 29% in the past year [10][13] - Hudbay Minerals Inc. (HBM) has a robust interest coverage ratio and is projected to have an EPS growth of 43.8%, with shares rising 20.4% in the past year [10][15] Investment Strategy - A favorable investment strategy includes selecting stocks with an interest coverage ratio above the industry average, a Zacks Rank of 1 or 2, and a VGM Score of A or B for optimal results [8][11] - Additional criteria for stock selection include a minimum price of $5, strong historical and projected EPS growth compared to the industry median, and substantial trading volume [9][10]

Core Insights - Deckers Outdoor Corporation's performance is primarily driven by strong consumer demand for its flagship brands, HOKA and UGG, with year-over-year sales growth of 10% and 3.6% respectively in Q4 FY25 [1][9] Brand Performance - HOKA's sales reached $2.2 billion in FY25, reflecting a 23.6% year-over-year increase, supported by new product launches and international expansion, particularly in EMEA and China [4][2] - UGG generated $2.5 billion in sales for FY25, marking a 13.1% year-over-year growth, with a focus on expanding its product line beyond cold-weather offerings [4][3] International Growth - HOKA's international revenues grew by 39% year-over-year, now accounting for 34% of total brand sales, while UGG's international revenues increased by 20%, representing 39% of total sales [4][2] Competitive Landscape - Key competitors in brand innovation include Wolverine World Wide, Inc. and Urban Outfitters Inc., with Wolverine's Saucony and Merrell brands showing strong revenue growth [5][6] - Urban Outfitters' brand portfolio also demonstrated positive performance, with notable increases in net sales for its brands [7] Financial Performance and Valuation - Deckers' shares have declined by 50% year-to-date, compared to a 17.6% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 16.45X, slightly below the industry's average of 17.01X [10] - Zacks Consensus Estimate indicates a projected earnings decline of 4.4% for FY26, with a potential recovery of 9.1% in FY27 [11]

Core Insights - Urban Outfitters Inc. (URBN) shares reached a 52-week high of $75.57, closing at $75.26, with a year-to-date stock rally of 37.1% compared to a 12.3% decline in the Zacks Retail-Apparel and Shoes industry [1] - The company's strategic initiatives and operational efficiencies have allowed it to outperform the broader Retail-Wholesale sector and the S&P 500 index, which saw growth of 0.6% and a decline of 1.8%, respectively [1] Stock Performance - URBN is trading above its 50-day and 200-day simple moving averages (SMA) of $53.43 and $47.65, indicating a continued uptrend and positive market sentiment [4] - The stock's strong performance is supported by sustained momentum and investor confidence in URBN's financial health and growth prospects [4] Strategic Growth Initiatives - URBN's strategic approach balances innovation with operational excellence, allowing the company to shape industry shifts rather than merely react to them [6] - The diversified brand portfolio and data-informed expansion strategy are advancing in high-growth areas while reinforcing core strengths [6] Operational Efficiency - In Q1 of fiscal 2026, URBN achieved a gross margin expansion of 278 basis points due to favorable cost shifts and sustainable operational enhancements [7] - Logistics initiatives, such as reducing package numbers per order and transitioning shipments from air to sea, have led to significant delivery expense leverage [8] Brand Performance - Each of URBN's brands, particularly Anthropologie and Free People, is showing notable strength, with Anthropologie achieving 10 consecutive quarters of double-digit operating profit growth [9] - Free People and FP Movement are key growth drivers, with FP Movement posting 29% total sales growth in the fiscal first quarter [10] Future Outlook - URBN anticipates high-single-digit growth across total sales for the fiscal second quarter, with mid-single-digit growth in the Retail segment and low-double-digit growth in the Wholesale segment [11] - The subscription rental business, Nuuly, is expected to deliver mid-double-digit revenue growth, supported by an increase in active subscribers [11] Valuation Metrics - URBN is trading at a forward 12-month price-to-sales ratio of 1.15, below the industry average of 1.76 and the sector average of 1.59, indicating potential for investors [12] - The Zacks Consensus Estimate for URBN's earnings has been revised upward, indicating year-over-year growth of 20% for the current fiscal year and 8.7% for the next fiscal year [15] Investment Appeal - URBN is characterized as a strong value pick, backed by disciplined operations, diversified growth channels, and consistent brand performance [18] - Positive earnings revisions and attractive valuation further highlight URBN's investment appeal, making it a compelling choice for long-term growth-focused investors [18]

Urban Outfitters, Inc. FY'26 Q1 RESULTS Introduction Urban Outfitters, Inc. "URBN" is providing fiscal 2026 first quarter commentary ahead of our earnings call scheduled for May 21st at 5:00pm. We remind you that any forward-looking statements made in this commentary are subject to our safe harbor statement found in our SEC filings. Our first quarter earnings release and related financial information are available on our website, www.urbn.com. As used in this document, unless otherwise defined,"Anthropologi ...

Core Viewpoint - Urban Outfitters Inc. (URBN) is identified as a compelling value play in the Retail-Apparel and Shoes industry, trading at a forward price-to-earnings ratio of 10.99, which is below the industry average of 15.74 and the Retail-Wholesale sector average of 23.01, indicating potential for investors seeking attractive entry points [1][2] Valuation Perspective - URBN's shares are currently trading 15.3% below its 52-week high of $61.16, reached on March 3, 2025, while the stock has gained 32% in the past six months, outperforming the industry's decline of 10.2% [4] - The company closed the trading session at $51.82, trading above its 50 and 200-day simple moving averages of $51.33 and $46.53, respectively, indicating a continued uptrend and positive market sentiment [7][8] Performance Across Segments - In the fourth quarter of fiscal 2025, Urban Outfitters achieved strong sales growth in its Retail segment, with comparable sales rising across all brands, particularly Anthropologie, which recorded an 8.3% year-over-year growth driven by digital sales [9] - The Wholesale segment also performed well, with Free People Wholesale emphasizing full-price selling, leading to a significant increase in profitability, and FP Movement Wholesale sales surging over 90% year-over-year [11] - The rental subscription platform, Nuuly, saw net sales rise 78.4% year-over-year, with subscription revenues climbing 55.6%, and it achieved its first full year of profitability with $13 million in operating profit [12][13] Strategic Expansion - Urban Outfitters is focused on expanding its physical retail presence, planning to open 58 stores in fiscal 2026, including 20 FP Movement locations, 16 Free People stores, and 15 Anthropologie sites [14][15] - The company aims to scale FP Movement to 300 stores across North America, supported by strong brand momentum and sound financial results [17] Challenges - The core Urban Outfitters brand is facing challenges, with a 3.5% year-over-year decline in retail segment comps for the fiscal fourth quarter, particularly in North America where sales trends are weak [18] - Rising selling, general and administrative (SG&A) expenses increased 8.6% year-over-year to $402.4 million, primarily due to higher marketing costs and payroll expenses, with expectations for SG&A expenses to grow 7.1% to $1.56 billion in fiscal 2026 [19] Investment Outlook - Despite challenges with the core brand and rising operational costs, URBN presents potential investment opportunities due to its attractive valuation and growth in brands like Free People and Nuuly, along with strategic initiatives suggesting a positive long-term outlook [20][21]

Financial Data and Key Metrics Changes - Total URBN sales grew by 9%, reaching a Q4 record of $1.6 billion, with record fourth-quarter sales from four of the five brands [11][12] - Gross profit increased by 17% to $528 million, with the gross profit rate improving by over 200 basis points to 32.3% [13][14] - Operating income rose by 54% to $125 million, while net income increased by 49% to $98 million or $1.04 per diluted share [15][42] Business Line Data and Key Metrics Changes - Anthropologie achieved an 8% Retail segment comp, with double-digit increases in the digital channel and mid-single-digit increases in the store channel [16][19] - Free People saw total retail and wholesale segment sales increase by 13%, driven by an 8% Retail segment comp and a 27% increase in wholesale revenues [19][21] - Urban Outfitters recorded a 3% decline in Retail segment comp, with improvements in merchandise margin rate due to lower markdowns [23][24] Market Data and Key Metrics Changes - The Wholesale segment experienced a 26% revenue increase, primarily due to full-price sales at Free People [12] - Nuuly added over 20,000 average active subscribers, ending the quarter with 300,000 average active subscribers, leading to a 56% increase in brand revenue [29][30] Company Strategy and Development Direction - The company plans to open approximately 58 new stores and close about 19 stores during fiscal year 2026, focusing on retail store expansion and technology investments [38][39] - Management emphasized a renewed focus on growth for Urban Outfitters, with strategies to improve customer acquisition and drive profitable full-priced sales [25][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for fiscal 2026, expecting mid-single-digit sales growth driven by low single-digit retail segment comps [32][33] - The company noted that customer demand remains consistent, with strong performance in key categories and a positive outlook for spring assortments [44][103] Other Important Information - The company ended FY25 with slightly elevated inventory levels, planning to increase product turns in the coming year [36] - Capital expenditures for FY26 are planned at approximately $240 million, with a focus on retail store expansion and technology investments [37] Q&A Session Summary Question: Did you hit the goal to improve IMU by 500 basis points? - Management acknowledged progress but fell short of the goal, indicating continued efforts for improvement [54] Question: Can you discuss the mix of branded versus private brands? - Urban Outfitters is focusing on growing national brands, while Anthropologie has achieved 70% owned brand penetration in women's apparel [60][61] Question: What notable trends across categories do you see emerging this year? - Management noted strong sales in bottoms, outerwear, and activewear, with expectations for low to mid-single-digit comps across brands [66][67] Question: What is the status of Urban Outfitters' transformation strategy? - Management reported good progress on the five pillars of transformation, focusing on customer engagement and improved product assortment [73][78] Question: What are the real estate plans for Anthropologie and Urban Outfitters? - Anthropologie plans to ramp up store growth due to brand momentum, while Urban Outfitters is rationalizing its footprint to improve profitability [90][94] Question: What is the outlook for Urban Outfitters' profitability? - Management indicated that Urban Outfitters needs to return to positive comps to leverage occupancy costs and improve profitability [142] Question: What is the long-term revenue potential for Urban Outfitters? - Management is optimistic about Urban Outfitters' revenue growth potential, emphasizing the need for continued improvement in product assortment and customer engagement [146]