Urban Outfitters, Inc. (NASDAQ:URBN) is one of the best affordable stocks with good earnings growth for 2026. Urban Outfitters, Inc. (NASDAQ:URBN) received several rating updates in December. On December 17, Baird lifted the price target on the stock to $93 from $90 and maintained an Outperform rating on the shares. The firm told investors that it sees the backdrop improving in 2026, with consumer stimulus, including tariff mitigation, wealth effects, and lower taxes, setting the stage for solid revenue an ...

Core Insights - Urban Outfitters' brands experienced a successful Q3 with full-price selling, and the company anticipates a strong holiday season despite customers waiting for deeper discounts [2][4] - The company exceeded expectations due to the turnaround of its teen-focused brand and overall sales strength, with notable contributions from the FP Movement activewear brand [3][4] - Urban Outfitters is focusing on private labels, marketing campaigns, and store expansion to drive growth and gain market share [4][6] Financial Performance - Q3 net sales increased over 12% year-over-year to a record $1.5 billion, with retail net sales rising 9.6% and comparable sales (comps) increasing by 8% [8] - Comps rose 12.5% at Urban Outfitters, 7.6% at Anthropologie, and 4.1% at Free People, while Nuuly subscription net sales surged 48.7% [8] - Gross margin expanded by 31 basis points to 36.8%, although tariffs impacted margins, which are expected to worsen in Q4 [8] Strategic Initiatives - The company plans to close about 17 stores while opening nearly 70 new locations, including 25 FP Movement stores, 18 Free People stores, and 16 Anthropologie stores [5] - The increase in traffic both online and in stores is expected to continue into Q4, contributing to anticipated sales growth during the holiday season [4][6] - The diversified brand portfolio is viewed as a major strength, providing confidence in market share growth regardless of the operating environment [7]

Core Insights - Wolverine World Wide, Inc. (WWW) demonstrated strong performance in Q3 2025, achieving 6.8% revenue growth and record margins, primarily driven by its flagship brands, Saucony and Merrell [1][10] Brand Performance - Saucony reported a significant 27% year-over-year revenue increase, achieving record profitability by effectively blending performance running with lifestyle appeal [2][10] - Merrell experienced a 5.1% quarterly revenue growth, focusing on performance-oriented products while redefining itself as a modern outdoor lifestyle brand [4][10] Product and Market Strategy - Saucony's signature models, including the Endorphin series and ProGrid Omni 9, are enhancing its presence in both athletic and fashion markets, supported by collaborations that resonate with younger consumers [3][10] - Merrell's product offerings, such as the Moab 3 and Agility Peak 5, are attracting diverse audiences by combining trail performance with everyday versatility [4][10] Global Expansion - Both brands are expanding their global reach through a city-focused strategy targeting key markets like Tokyo, London, and Paris, which integrates digital engagement with localized storytelling [5][10] Financial Projections - For Q4 2025, Wolverine anticipates revenues between $498 million and $513 million, indicating a 2.2% year-over-year growth at the midpoint [6][10] - Full-year revenue projections for 2025 are between $1.86 billion and $1.87 billion, suggesting a year-over-year growth of 6-6.8% [6][10] Competitive Landscape - Wolverine competes with key players like Deckers Outdoor Corporation, Tapestry, Inc., and Urban Outfitters Inc., all of which are also focusing on brand innovation and market expansion [8][10]

Core Viewpoint - Urban Outfitters, Inc. (NASDAQ:URBN) is considered one of the most undervalued retail stocks, with analysts maintaining a positive outlook despite varying ratings and price targets from different firms [1][2]. Group 1: Analyst Ratings and Price Targets - Wells Fargo maintained a Hold rating on Urban Outfitters and set a price target of $75.00 [1]. - UBS raised its price target for Urban Outfitters from $78 to $79, maintaining a Neutral rating, citing a solid Q2 performance and positive Q3 guidance [2]. - The current analyst consensus for Urban Outfitters is a Moderate Buy, with a median price target of $73.19, indicating a potential upside of 12.04% from current levels [2]. Group 2: Company Overview - Urban Outfitters operates through three segments: Retail, Wholesale, and Nuuly [3]. - The Retail segment includes its store and digital channels, managing brands such as Anthropologie, Free People, FP Movement, and Urban Outfitters [3]. - The Nuuly segment consists of the Nuuly brand, which features Nuuly Thrift and Nuuly Rent, a monthly women's apparel subscription rental service [3].

Core Viewpoint - TCW Relative Value Mid Cap Fund reported a strong performance in Q2 2025, with a return of 7.37%, outperforming the Russell Midcap® Value Index which returned 5.35% [1] Company Overview - Urban Outfitters, Inc. (NASDAQ:URBN) is a lifestyle products and services company with a market capitalization of $6.56 billion as of October 2, 2025 [2] - The company operates 744 stores globally, including 257 Urban Outfitters stores, 241 Anthropologie stores, and 237 Free People stores [3] Investment Highlights - Urban Outfitters, Inc. has shown a one-month return of 2.49% and a remarkable 103.93% increase in share value over the last 52 weeks [2] - The stock initially had a market capitalization of $6.5 billion and met four out of five valuation factors: price-to-earnings, price-to-sales, price-to-book, and price-to-cash flow [3] Growth Catalysts - Key catalysts for Urban Outfitters include a turnaround at the Urban Outfitters brand, new product launches, and growth in adjacent product categories [3] - The company plans to clean up inventory and lower markdown levels in fiscal 2026, followed by enhanced marketing efforts [3] - Anthropologie is focusing on expanding in warm weather, athleisure, and intimates and lounge categories, while also seeing positive sales growth in Home [3] - Free People aims to open 25 new stores in 2025, contributing to overall top-line growth and improved cash flow [3]

Core Insights - Wolverine World Wide, Inc. (WWW) reported strong brand performance in Q2 2025, with Saucony leading the portfolio, achieving a 41.5% year-over-year revenue increase and record sales, alongside a gross margin expansion of 560 basis points [1][11] - Key initiatives such as the Run As One campaign and flagship store openings in Tokyo and London enhanced consumer engagement and solidified Saucony's market position [2] - Merrell experienced a 10.7% revenue growth, marking its fourth consecutive quarter of growth, with nearly 600 basis points of gross-margin expansion driven by demand for lighter, faster trail footwear [3][11] - Sweaty Betty's revenues declined by 6% year-over-year, yet it achieved over 500 basis points of gross margin expansion through strategic campaigns and digital enhancements [4] - The Wolverine brand also improved revenues and expanded gross margin by over 400 basis points, supported by premium product launches and stronger marketing efforts [5][11] - Overall, Wolverine's Q2 performance indicates robust growth from Saucony and Merrell, with sequential improvements from Sweaty Betty and Wolverine, positioning the portfolio for sustainable growth [6][11] Competitive Landscape - Deckers Outdoor Corporation (DECK) reported strong results driven by flagship brands HOKA and UGG, with HOKA growing 19.8% year-over-year to $653.1 million and UGG increasing 18.9% to $265.1 million [8] - Tapestry, Inc. (TPR) saw an 8.3% year-over-year increase in net sales, with Coach leading the growth at 14% to $1.43 billion, while Kate Spade and Stuart Weitzman experienced declines [9] - Urban Outfitters Inc. (URBN) showcased strong performance across its brand portfolio, with all brands delivering positive comparable sales [10]

Financial Data and Key Metrics Changes - The company reported a record Q2 revenue of $1.5 billion, achieving over 11% top-line growth [3] - Gross profit margin expanded by over 100 basis points, primarily due to a lower markdown rate and occupancy leverage from strong sales [3][4] - Earnings per share (EPS) grew by over 20%, marking a Q2 record [3] Business Line Data and Key Metrics Changes - Nuuly experienced robust growth with over 50% top-line growth [3] - The Urban Outfitters brand achieved positive comparable sales for the first time in a while, indicating a turnaround [4][19] - The Home category has seen a comp increase for three consecutive quarters, driven by customer interest in home refreshes [14][15] Market Data and Key Metrics Changes - All brands and geographies reported positive comparable sales, showcasing broad market strength [3][40] - The company has successfully grown its customer base by 50% over the last five years, indicating effective customer acquisition strategies [8] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and enhancing customer experiences, particularly through new brand launches [7][10] - There is a strong emphasis on maintaining a full-price business model and reducing reliance on promotions [51][52] - The company is optimistic about its ability to navigate tariff headwinds through vendor negotiations and sourcing diversification [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro environment and consumer spending, expecting similar performance in the second half of 2025 [40][41] - The company is prepared to adjust its strategies in response to market changes, leveraging its diversified business model [42][43] Other Important Information - The company is investing in logistics and distribution improvements to enhance profitability, particularly for the Nuuly brand [35][36] - There are ongoing efforts to mitigate tariff impacts through various strategies, including pricing adjustments and sourcing changes [44][45] Q&A Session Summary Question: What gives you confidence that the momentum at Anthropologie is sustainable? - Management highlighted a successful turnaround strategy focused on modernizing product assortments and enhancing customer experiences [5][8] Question: When do you expect new sub-brands to materially contribute to financial performance? - New brands like Daily Practice and Celine D are already significant contributors, with expectations for continued double-digit growth [10] Question: What are the largest incremental profit drivers for Anthropologie? - Management pointed to margin improvements and operational efficiencies as key profit drivers moving forward [17] Question: How do you view the health of the activewear category? - Management remains optimistic about the category's growth potential, citing unique product offerings and market share opportunities [30][31] Question: What are your expectations for the second half of 2025? - Management expects performance to remain strong, with all brands and geographies comp positive [40][41] Question: Can you quantify the impact of tariffs on your guidance? - Management indicated that tariff impacts are factored into their guidance, with ongoing efforts to mitigate these effects [44][49]

Financial Data and Key Metrics Changes - The company reported a record Q2 revenue of $1.5 billion, achieving over 11% top-line growth [3] - Gross profit margin expanded by over 100 basis points, primarily due to a lower markdown rate and occupancy leverage from strong sales [3] - Earnings per share (EPS) grew by over 20%, marking a Q2 record [3][4] Business Line Data and Key Metrics Changes - Nuuly experienced robust growth with over 50% top-line growth [3] - The Urban Outfitters brand achieved positive comparable sales for the first time in a while, indicating a turnaround [4][20] - The Home category has seen three consecutive quarters of comparable sales increases, driven by customer interest in home decor [16] Market Data and Key Metrics Changes - All brands and geographies reported positive comparable sales, showcasing broad-based growth [3] - The company has successfully grown its customer base by 50% over the last five years, indicating effective customer acquisition strategies [9] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and enhancing customer experiences, particularly through new sub-brands [7][11] - There is a strong emphasis on maintaining a full-price business model and reducing reliance on promotions [50] - The company is optimistic about its ability to navigate tariff headwinds through vendor negotiations and sourcing diversification [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro environment and consumer spending, expecting similar performance in the second half of 2025 [39][41] - The company is prepared to adjust its strategies in response to market changes, leveraging its diversified business model [42][43] Other Important Information - The company is expanding its distribution capabilities, which is expected to enhance logistics efficiency and profitability in the future [36][38] - The Urban Outfitters brand is expected to continue its recovery, with a focus on maintaining margins and driving positive sales [21][24] Q&A Session Summary Question: What gives you confidence that the momentum at Anthropologie is sustainable? - Management highlighted a successful turnaround strategy focused on modernizing product assortments and enhancing customer experiences [5][9] Question: When do you expect new sub-brands to materially contribute to financial performance? - New sub-brands like Daily Practice and Celine D are already significant contributors, with expectations for continued double-digit growth [11] Question: What are the largest incremental profit drivers for the company moving forward? - Management identified margin improvements from brands like Anthropologie and Free People, along with operational efficiencies as key profit drivers [18] Question: How do you view the activewear category and Free People's FP Movement? - Management remains optimistic about the activewear category, citing market share opportunities and unique product offerings as growth drivers [30][31] Question: What are your expectations for the second half of 2025? - Management expects performance to remain strong, with all brands and geographies showing positive trends [39][41] Question: How important are tariff mitigation strategies? - Management emphasized the importance of vendor negotiations and sourcing diversification to mitigate tariff impacts [44][45]

Core Insights - Urban Outfitters Inc. (URBN) reported strong fiscal 2026 results with retail comparable sales increasing by 4.8% year over year, driven by positive gains in both digital and retail store sales [1][10] - The company experienced significant growth in wholesale revenues, which rose by 24.2%, led by Free People's 25.6% growth and FP Movement's 78% surge [4][10] Retail Performance - Anthropologie achieved a 6.9% retail comparable sales growth, marking its 10th consecutive quarter of growth, supported by strong performance in both stores and digital channels [2] - Free People recorded a 3.1% retail comp, with FP Movement delivering a 6% retail comp and 16% total retail growth [2] - Urban Outfitters saw its first positive global retail comp in several quarters at 2.1%, with Europe up 14%, despite a 4% decline in North America [3] Wholesale Performance - Wholesale revenues increased significantly, with Free People's growth at 25.6% and FP Movement's at 78%, attributed to strong full-price sales and new label introductions [4][10] - The focus on aligned partnerships and brand integrity contributed to improved profitability [4] Future Outlook - For the fiscal second quarter, URBN anticipates mid-single digit retail comps for Anthropologie and Free People, low single digit growth for Urban Outfitters, and low double digit wholesale gains [5] - The company plans to open 64 new stores in fiscal 2026, emphasizing innovation and strategic wholesale growth to maintain momentum [5] Competitive Landscape - Key competitors include Steven Madden, Ltd. (SHOO) and Deckers Outdoor Corporation (DECK), with SHOO experiencing a decline in wholesale revenues while Deckers reported a 26.7% increase in wholesale net sales [6][7][8] Valuation and Estimates - URBN shares have gained 42.5% year to date, contrasting with the industry's decline of 12.9% [9] - The company trades at a forward price-to-earnings ratio of 15.02X, below the industry average of 17.56X, with a Zacks Consensus Estimate indicating a year-over-year earnings growth of 21.9% for fiscal 2026 [11][12]

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]