Urban Outfitters Surges After Q1 Beat: Analysts Highlight Margin Strength, Sales Momentum

Shares of Urban Outfitters Inc URBN rallied after the company Wednesday reported its first-quarter results.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

JPMorgan On Urban Outfitters

Analyst Matthew Boss reiterated an Overweight rating while raising the price target from $63 to $78.

Urban Outfitters reported quarterly earnings of $1.16 per share, 38% above Street expectations of 84 cents per share, Boss said in a note. He added that the outperformance was driven by same-store-sales growth of 5%, coming in above expectations of 3.4%, and adjusted gross margin expansion of 240 (basis points) bps year-on-year to 36.8%.

The quarter's same-store-sales growth "included positive comp growth across all three banners," which has happened for the first time in three years, the analyst wrote. For the second quarter, management guided to high-single-digit percentage growth in consolidated sales growth, with mid-single-digit percentage growth in same-store sales, above Street's 3.4% projection, he further stated.

Check out other analyst stock ratings.

Telsey Advisory Group On Urban Outfitters

Analyst Dana Telsey maintained a Market Perform rating, while lifting the price target from $59 to $72.

Telsey said that Urban Outfitters' adjusted earnings grew to $1.16 per share from 69 cents per share in the same quarter last year. Total sales grew 10.7% to $1.330 billion, surpassing consensus of 7.6% to $1.292 billion, she added.  

"After a solid finish to FY24, momentum continued into FY25 with a healthy beat across the board in the first quarter," the analyst wrote. The second-quarter guidance was "encouraging," given the challenging macro environment, as it reflects "continued topline momentum across brands along with margin expansion and earnings growth," she further stated.  

URBN Price Action: Shares of Urban Outfitters had risen by 22.01% to $72.72 at the time of publication on Thursday.

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