Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Clothing retailer Urban Outfitters (Nasdaq: URBN) is back in style once again, with shares up as much as 21% after the company reported better-than-expected second-quarter results.

So what: For the quarter, Urban Outfitters reported an 8% increase in net income to $0.42 on an 11% jump in revenue to $676.3 million. Both figures easily surpassed Wall Street's expectations for a profit of $0.33 on sales of $672 million. The notable winner among its various chains was its flagship Urban Outfitters brand, which noted sales growth of 14%, with Anthropologie coming in a distant second with 3% growth. Comparable-store sales rose 4%, but actually contracted 1% when direct-to-consumer sales are excluded.

Now what: There's little denying that this is a solid beat in an otherwise weakening apparel environment, but I'm not in the least bit interested in buying into the Urban Outfitters story here. The company is going to be dealing with rising input prices from all angles (i.e., cotton, labor, and mall-based rent), all while U.S. GDP is contracting and consumer spending is weakening. If it were priced more appropriately, that'd be one thing, but at 20 times forward earnings, all value appears to have been sucked out of the stock. This is one I'd consider waiting out for a more attractive valuation.

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