Shares of Urban Outfitters (NASDAQ:URBN) have rebounded about 20% since the company reported second-quarter results last month. The numbers showed a business shrinking once again as brick-and-mortar retail continues to struggle against the popularity of online shopping, but things weren't as bad as investors expected.

URBN Chart

Data by YCharts.

Things could be worse...

Urban Outfitters' total sales numbers are down 1.1% on the year. The declines were led by a 4.9% decrease in total same-store sales during the second quarter, with retail store weakness offset by online and wholesale increases.

Metric

Free People

Anthropologie Group

Urban Outfitters

Second-quarter YOY retail same-store sales change

2.9%

(4.0%)

(7.9%)

YOY = Year-over-year. Chart by author. Data source: Urban Outfitters' quarterly report.

The numbers were ugly last quarter, but shares increased anyway as the results outperformed expectations. Prospects for the traditional retail industry have looked bleak -- clothing store sales in the U.S. are flat on the year, while general retail sales are up 4%, according to figures from the U.S. Census Bureau. Urban Outfitters isn't alone in its struggles, with other clothing stores posting a mixed bag of results, too. Here are a few notable examples:

Company

Q2 2017 Revenue Change

Q2 2017 Same-Store Sales Change

Urban Outfitters

(2.0%)

(4.9%)

Macy's

(5.4%)

(2.8%)

Gap

(1.4%)

1.0%

Chart by author. Data source: Urban Outfitters, Macy's, and Gap quarterly earnings.

The takeaway, here, is that the retail world is evolving, and Urban Outfitters and other clothing retailers are trying to find the right mix of physical and online presence. Simply put, that optimal mix hasn't been found yet.

Reasons for optimism

The week after earnings, Urban Outfitters said it had added another member to its board of directors with the appointment of Sukhinder Singh Cassidy. Cassidy brings with her extensive experience in e-commerce, as she was former CEO of online clothier Polyvore, a business development executive at Amazon, and president of Asia Pacific and Latin America at Google.

The interior of one of Urban Outfitters' stores. An old urban building restored by the company's designers and is stocked with clothes and home items.

Image source: Urban Outfitters.

The new hire is in line with the store leadership restructuring that was announced back in the spring. Urban Outfitters said it would be streamlining things so that each brand in its stable -- the namesake business as well as Anthropologie, Free People, and a small restaurant business -- can be more efficient. Details were scant, but the company said the changes would help the brands adapt to industry changes and save $25 million annually in operating costs.

Along with the addition of Cassidy to the board of directors, a new share repurchase program was approved for another 20 million shares. At the end of the second quarter, there was another one million shares remaining on the previous repurchase plan.

Shopping for stock on sale?

Even after the recent share price rally, Urban Outfitters still looks like a bargain with a price-to-earnings ratio based on the trailing 12-month period at 7.2. With that new share repurchase program, the company apparently agrees that its own stock is a worthy use of cash.

In spite of not-so-stellar numbers, the recent quarterly results demonstrate how downbeat the market has been on the company -- and retailers in general. If you're in need of some retail therapy for your portfolio, Urban Outfitters stock is worth a look. It could take an iron stomach to sit through the volatility, but a real bargain could be in the works.

Nicholas Rossolillo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.