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Why Urban Outfitters Stock Surged Today

By Joe Tenebruso - May 26, 2021 at 2:19PM

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Investors cheered the recovery in the company's revenue and earnings.

What happened

Shares of Urban Outfitters (URBN 8.10%) rose sharply on Wednesday, following the release of the lifestyle retailer's first-quarter financial results. As of 2 p.m. EDT, the stock's price was up roughly 9%.

So what

Urban Outfitters' total sales soared 57.6% year over year to $927 million, fueled by a 51% jump in comparable-store sales. The gains were broad-based. Comps for the company's three core brands -- Free People Group, Anthropologie Group, and Urban Outfitters -- rose 77%, 50%, and 42%, respectively.

People are sitting with shopping bags next to them.

Retail store traffic is recovering as the pandemic subsides. Image source: Getty Images.

Urban Outfitters' net income, in turn, improved to $54 million, or $0.54 per share, compared to a loss of $138 million, or $1.41 per share in the year-ago period.

"The first quarter was one for the record books; record sales, a record low markdown rate, and record earnings per share," CEO Richard Hayne said in a press release. 

Now what

Urban Outfitters' results lie in sharp contrast with its performance in the prior-year quarter, when coronavirus-related store closures weighed heavily on its sales and profits. Now, with vaccinations ramping up and more people shopping in stores once again, retailers are enjoying a rebound in demand for their wares. If this trend continues in the coming quarters, Urban Outfitters' shareholders could be in store for even more gains.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Urban Outfitters, Inc. Stock Quote
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