Urban Outfitters' Holiday Punch

Things are still looking up at Urban Outfitters (Nasdaq: URBN). The retailer reported its holiday sales data and there are heartening signs of strength at its Anthropologie and Free People concepts.

Urban Outfitters said total holiday sales (aggregating November and December data) increased by 27%, to $356 million. Same-store sales for the period increased by 9%, comprised of a 16% increase at Anthropologie, a 17% increase at Free People, and a 5% increase at Urban Outfitters.

What a difference a year makes, too -- last year, the company's overall comps decreased by 5%, and Free People was the only positive factor, with a modest gain.

In addition, the retailer's direct-to-consumer segment enjoyed a 39% increase in sales, and Free People's wholesale sales surged 46%.

Urban Outfitters has risen to the challenges it faced last year and seems to be getting back on track. Even with the possibility of a recession, strong retailers don't have very much to fear, and I'd count Urban Outfitters as one of those, with its three distinctive concepts -- and another on the way.

Meanwhile, given the macro environment in retail, investors are nervous about many retail names. For a long time Target (NYSE: TGT) was a stunning success with consumers, particularly during the holidays, but this year it looks as though it lost out to Wal-Mart (NYSE: WMT).

Investors are weighing retailers carefully in this environment, as they should. Will recent winners, including Abercrombie & Fitch (NYSE: ANF), falter? Will recent losers such as Gap (NYSE: GPS) regain strength? A sluggish consumer adds another difficult variable into the mix.

I feel confident about Urban Outfitters for the long term. Between its differentiated concepts and its excellent, merchandise-minded management team, it will weather any storm well. In fact, it already has.

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• Last quarter, Urban Outfitters returned.