Urban Outfitters Inc. (URBN), the specialty retailer of fashion apparel and accessories, footwear, home décor and gifts products, is expected to report third-quarter fiscal 2015 results on Nov 17. In the last quarter, it had posted in-line earnings, with both the reported earnings and the Zacks Consensus Estimate coming in at 49 cents. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
In mid-October, Urban Outfitters stated that comparable retail segment net sales continue to decline in the third quarter of fiscal 2015. As a result of lower-than-expected sales, management anticipates gross profit margin to remain under pressure in the quarter, and it may also deleverage at a higher rate as compared to the first half of the fiscal year. Management hinted that these will have an adverse impact on the company’s third-quarter earnings per share.
Earnings Whispers?
Our proven model does not conclusively show that Urban Outfitters is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Urban Outfitters is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents.
Zacks Rank: Urban Outfitters currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Major Earnings Slated for Next Week
Some other major companies going to report earnings next week are Best Buy Co. Inc. (BBY), L Brands, Inc. (LB) and GameStop Corp. (GME). While Best Buy has a Zacks Rank #1 (Strong Buy), both L Brands and GameStop carry a Zacks Rank #2 (Buy).
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