Urban Outfitters, Inc. (NASDAQ:URBN) is scheduled to report first quarter, fiscal year (FY) 2015 sales and earnings after the close of financial markets on Monday, May 19, 2014. On the same day, management will host a conference call at 5:00 p.m. ET to discuss the results.
Wall Street anticipates that the apparel retailer will earn $0.27 per share for the quarter, which is $0.05 less than last year's profit of $0.32 per share. iStock expects URBN to hit Wall Street's consensus number, the iEstimate is $0.27, too.
Revenue, unlike earnings, is expected to move up, increasing 4.9% year-over-year (YoY). Urban Outfitters' consensus revenue estimate for Q1 is $680.18 million, more than last year's $648.18 million.
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Urban Outfitters, Inc. (Urban Outfitters) is a lifestyle specialty retail company, which operates under the Urban Outfitters, Anthropologie, Free People, Terrain and BHLDN brands.
Urban has done a praiseworthy job of managing Wall Street's expectations as earning out-produced the consensus estimate 11 of the last 16 quarters. On average, URBN earned $0.3 more than forecasted with a range of $0.1 to $0.09 more than anticipated. Meanwhile, the typical bearish miss for the handful of shortfalls averaged -$0.03 less than the consensus – symmetry in numbers.
In what could be a bullish sign, two of the 36 analysts with an Urban EPS estimate lifted the outlook within the last week. Upping profit projections on the doorstep of the announcement takes some courage or knowledge of what is coming. Let's examine Google's Search Volume Intensity (SVI) to see if the pair with brighter outlooks are on to something.
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Since Urban Outfitters and Anthropologie account for nearly 80% of URBN's revenue, we'll focus on them as where they go, sales and profits are sure to go.
Compared to the first quarter of FY 2014, SVI for the keyword "Urban Outfitters" is down 7.6%. Meanwhile, Anthropologie's SVI is flat YoY. If Google Trends translate, it could put a dent in Q1 FY 2015's top-line – blame it on the Polar Vortex.
On the plus side, margins should remain health as cost of goods sold (COGS) fell in last year according to URBN's annual report. The savings allowed the company to spend more on selling, general and administrative expenses (SG&A). Hopefully, most of the difference was spent on selling.
The balance sheet is mostly to our liking, as well. Inventory growth was in-line with sales growth, which is a sign that management has the right supply v. demand balance and discounting mostly unnecessary – another plus for margins.
Overall: Urban Outfitters, Inc. (NASDAQ:URBN) could be another victim of winter weather; however, URBN should recover quickly as their financial house appears in order.
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