Urban Outfitters Stock Jumps After Non-Namesake Brands Drive Earnings Beat

Urban Outfitters stock experienced a surge in after-hours trading on Tuesday as the company reported better-than-expected earnings and sales. The strong performance of its Free People, Anthropologie, and Nuuly brands helped to offset any weaknesses in its Urban Outfitters brand. CFO Melanie Marein-Efron noted that consumer demand has remained robust in the current quarter. However, the stock may face resistance around the $43.80 mark, which coincides with recent sideways price movements.
In the three-month period ending on April 30th, the company exceeded Wall Street expectations by reporting adjusted earnings of 69 cents per share, surpassing the forecasted 53 cents per share. Additionally, revenue for the quarter saw a 7.8% increase to $1.2 billion, slightly higher than the anticipated $1.18 billion.

The high-end women’s brands, Free People and Anthropologie, experienced growth in their retail segment comparable net sales, with increases of 17.1% and 10.4%, respectively. This helped to counterbalance the decline in sales for the company’s Urban Outfitters brand, which reported a 13.7% decrease compared to the previous year. The Nuuly clothing rental division also had a strong performance in the quarter, with a 51.4% year-over-year increase in sales, driven by a surge in average active subscribers.
“We are delighted to announce that our first quarter sales and earnings have reached record levels, driven by the outstanding performance of our Anthropologie, Free People, FP Movement, and Nuuly brands,” stated Richard Hayne, CEO of Urban Outfitters, in the company’s earnings statement.
In the upcoming quarter, the company anticipates mid-single digit growth in net sales. During the post earnings call, CFO Melanie Marein-Efron expressed satisfaction with the robust consumer demand. She stated, “We are pleased to see that consumer demand has remained strong at the start of the quarter, and we expect this trend to continue throughout the second quarter.”
It is recommended to closely monitor this level as it relates to buying activity influenced by earnings.
After reaching its highest point in January, Urban Outfitters shares have been following a descending triangle chart pattern. Recently, the price has been consolidating between the pattern’s upper trendline and the 50-day moving average. This indicates a lack of strong market sentiment leading up to the company’s quarterly results.

However, following Urban Outfitters’ better-than-expected report, it is anticipated that the stock will move higher. Investors should pay attention to the $43.80 level, as the shares may face selling pressure near a horizontal line that connects recent sideways price movement. If the stock can decisively break through this level, it has the potential to retest its late February high of $47.29.

In after-hours trading, Urban Outfitters shares increased by 6.5% to $43.99.