Urban Outfitters, Inc. (NASDAQ:URBN) is one of the most undervalued retail stocks to invest in. In a report released on September 18, Ike Boruchow from Wells Fargo maintained a Hold rating on Urban Outfitters, Inc. (NASDAQ:URBN) and set a price target of $75.00. Urban Outfitters, Inc. (URBN): It’s An “Outlier,” Says Jim Cramer However, while UBS maintained a Neutral rating on the stock on September 2, it raised its price target on Urban Outfitters, Inc. (NASDAQ:URBN) to $79 from $78, telling investors in ...

TCW funds, an investment management company, released its “TCW Relative Value Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started with a sharp decline driven by the Liberation Day tariffs announcement by President Trump, but a 90-day pause on certain tariffs led to a strong recovery, propelling the S&P 500 and Nasdaq to new highs. U.S. equities continued to rise in May and June, supported by better-than-expected corporate results and po ...

Key Takeaways Wolverine reported broad-based Q2 growth, led by Saucony's 41.5% y/y revenue jump and record sales.Merrell marked its fourth straight quarter of growth with lighter, faster trail footwear driving demand.Sweaty Betty and Wolverine delivered margin expansion through campaigns, innovation and premium launches.Wolverine World Wide, Inc. (WWW) delivered strong brand results in the second quarter of 2025, with Saucony leading the portfolio. The brand posted a 41.5% year-over-year revenue increase, a ...

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]

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]