It's hard to know just how to describe the ride "stuff"-retailer extraordinaire Urban Outfitters (URBN) has taken investors on over the past few weeks. We're thinking about going with "psychotic roller coaster," but obviously, we're open to suggestions.
Just a few short weeks ago, Urban Outfitters said it planned to double sales by 2020. It also promised an Anthro for every living room. Promises, promises. Then last week, the company made news again. Only this time, Urban Outfitters posted sales that were so awful we used three "reallys" to modify the word “bad.”
More bad news came today after Wedbush analyst Morry Brown revised estimates and cut the price target to $32 from $36. And he didn’t mince words when it came to explaining why:
We do not see a near-term catalyst to drive a positive inflection at either of the company's primary brands. At Urban Outfitters, the lack of improvement in same-store sales quarter-to-date suggests work remains ahead to turn the division. Without a clear catalyst for a return to positive same-store sales, we have limited visibility on the timetable for a turnaround, as the goalposts have been pushed back once again. At Anthro – while the business remains up in the low-single digits, tough comparisons set a high bar. The recent uptick in promotions suggests discounts (though narrow and modest) are becoming increasingly necessary to drive traffic. With uncertainty surrounding both of the company's primary division, we do not see a near-term catalyst for the stock.
Ouch!
We took a look at shares and they're up 2.5% this at 3:02 p.m. this afternoon after falling 18% during the past month of trading.
What would a roller coaster be without a rise after a dip?
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