Earnings Preview for Urban Outfitters (URBN, M, DDS, JWN, KSS)

Urban Outfitters URBN is expected to announce its Q1 earnings results on Monday, May 16. Analysts are expecting earnings per share to reach $0.24, or a fall of 22.6% on the same quarter last year. Analysts lowered their estimates recently, however. The Street's estimate a month ago was $0.27 and a week ago it stood at $0.25. Revenues are expected to reach $522.07 million, or an increase of 8.8% year-over-year. Urban Outfitters is a lifestyle specialty retail company that operates under the Urban Outfitters, Anthropologie, Free People and Terrain brands. The company also operates a wholesale segment under the Free People and Leifsdottir brands. Its retail stores offer differentiated collections of fashion apparel, accessories and home goods. Looking ahead, analysts expect earnings per share to recover on a yearly basis. In the upcoming quarter, earnings per share is projected to be $0.39, or a fall of 7.1% year-over-year. For the year as a whole, analysts predict earnings per share will stand at $1.63, just 1.9% lower than in 2010. Revenues are expected to expand at an accelerating pace throughout the year. In the upcoming quarter, analysts predict revenues to reach $613.67 million, or an increase of 11.1% on Q2 2010. For the whole year, revenues should stand at $2.57 billion, or 12.9% higher than in last year. Investors will closely be watching Urban Outfitters'Q1 results, after the company announced, in the beginning of April, its sales so far this year have fallen year-over-year. The crucial question investors will be looking to unlock is if the middle class shoppers will be returning to High Street. With the recovery of U.S. economy still fragile, many consumers will continue to tighten their belts. Traders will find some evidence that consumer spending might start to recover as the Michigan Consumer Sentiment Index rose to 72.40 in May, above market expectations of 70.00. In April, the index stood at 69.80. Further evidence of a middle class comeback could be found in Q1 results of other High Street giants. On Wednesday, Macy's M announced its Q1 earnings per share reached $0.69, or 57.9% above the Street's estimate. Last week, Dillard's DDS also announced superb Q1 results. Its earnings per share raced to $1.31, or almost 44% ahead of the Street's estimate of $0.91. Nordstrom JWN also announced its Q1 earnings results above market expectations. While most analysts believed its earnings per share will stand at $0.67, Nordstrom reported earnings of $0.69 per share. The one competitor that failed to beat market expectations was Kohl's KSS, which reported earnings per share of $0.73, in line with the Street's estimate. A string of optimistic data continues with April sales results, as most retailers announced increasing sales, mostly due to the surge in Easter shopping. According to Reuters, same-store sales in the main 25 retailers rose by 8.9%, ahead of market expectations of a rise of 8.2%. The sales have been rising for 14 months in a row now. Rating agencies are divided on how to rate Urban Outfitters. At the moment, 14 of them have a Buy or Strong Buy, while 13 rating agencies have a Hold rating. On Friday, Urban Outfitters lost 1.12% to close the week at $32.62. This has been a difficult year for its shares, as they lost 13.66% in the last 90 days.