Urban Outfitters (URBN) Stock Forecast & Price Target

Urban Outfitters has displayed solid financial performance, with total sales increasing by 9.4% to $1.636 billion, surpassing consensus expectations of 8.8% growth. The company's operating income reached $4.1 million in the fourth quarter, resulting in a notable operating margin expansion to 7.7%, which exceeded consensus projections as well. Additionally, the fast-growing Nuuly rental and resale business experienced a robust 55% year-over-year sales increase, driven by a significant rise in active subscribers, further highlighting the brand's potential for future growth.

Urban Outfitters reported a 3.3% year-over-year decline in total sales for its Urban Outfitters brand in fourth quarter 2024, totaling $360.2 million, which was slightly better than expected but still reflects ongoing financial struggles. Additionally, comparable store sales fell 3.5% in the fourth quarter, compounding previous declines of 13.6% and 8.9% in earlier periods, indicating a troubling trend in customer demand. Furthermore, while there is a projected gross margin expansion of 110 basis points to 31.3%, this is below consensus expectations, and the company anticipates a lower-than-consensus earnings per share of $0.90, further solidifying the negative outlook on the stock.