Analysts Look For Turnaround at Urban Outfitters

NEW YORK, United States — Stock analysts are eyeing a potential turnaround at Urban Outfitters, but remain uncertain on its timing.

On Monday the retailer, whose brands include Free People, Anthropologie, its namesake and others, reported fiscal fourth-quarter earnings of 59 cents per share on revenue of $905.9 million. Analysts surveyed by FactSet expected earnings of 55 cents per share on revenue of $909.2 million.

Looking to the first quarter, CEO Richard Hayne said in a statement that customer reaction to its new spring assortment at Anthropologie and Free People has been strong but that it remains cautious about the company's first-quarter performance because of ongoing challenges at its namesake brand.

Urban Outfitters brand sales declined during the fourth quarter and climbed at Anthropologie and Free People.

Jefferies' Randal Konik said in a client note that he believes the Urban Outfitters brand will turn around during the second half of the year. The analyst feels that once this happens and Urban Outfitters, Anthropologie and Free People are all doing well, the retailer's stock will benefit.

Konik kept a "Buy" rating and $54 price target.

Ike Boruchow of Sterne, Agee & Leach is taking more of a wait-and-see approach. The analyst thinks the company's first-quarter profit margins will likely be pressured by ongoing struggles at its namesake brand. Boruchow said it's too unclear when that will improve, so he's remaining on the sidelines with a "Neutral" rating. The analyst lowered Urban Outfitters' price target to $38 from $42.

Citi Investment Research's Oliver Chen also believes that better results are needed from the Urban Outfitters brand to help drive a recovery and push earnings higher.

The analyst reaffirmed a "Neutral" rating and trimmed the retailer's price target to $41 from $43.

Shares of Urban Outfitters Inc. fell $1.89, or 5 percent, to $35.62 in morning trading.