Citi loves Urban Outfitters (URBN) and why not? The stock has nearly doubled over the past 52-weeks, and the company has defied the consumer slowdown.
According to Citi analyst Kimberly Greenberger, the best is yet to come for the “hip” retailer:
Mgmt indicated it is seeing no sign of recession as we believe product differentiation & unique store experience is driving con’t sales momentum.
We believe U.O. is solidly back on track as mgmt is successfully increasing style count (while keeping the SKU count flat), offering a more balanced and eclectic assortment, investing in design talent, applying a more systematic approach to managing the assortment and improving product flow, increasing its own brand penetration and increasing third party brands.
Superior product execution & unique store env. should drive comp momentum & margin expansion beyond historic peak (19%) over next 2 yrs through faster speed to market, improved invent’y turns, adjusted inventory buys given current selling trends & improved allocation of goods (by store).
Citi reiterates BUY on Urban Outfitters (URBN), target raised from $35 to $39.
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