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Shares of Urban Outfitters (NASDAQ:URBN) peaked at a gain of roughly 10% in early trading Thursday after the trendy retailer announced that same-store sales have improved following a dismal third quarter.
Why it's happening
Urban Outfitters' same-store sales declined by 1% in the third quarter from a year earlier. However, since that quarter ended, the company's same-store sales have grown in the "low single-digit" percentage range for the current quarter. U.S. retail sales grew by 0.7% in November over the year-ago period, beating the 0.4% gain most analysts had expected.
The report prompted positive commentary from Morgan Stanley analyst Kimberly Greenberger, who said sales growth "held up well against a tough comp[arable period]." This refers to Urban Outfitters' 5% same-store sales growth in the year-ago period, which set a high bar for sales in a difficult retail environment. Greenberger now believes Urban Outfitters is the "best-positioned" company in its category, with its Anthropologie and Free People stores driving overall sales growth.
Alex Planes has no position in any stocks mentioned. The Motley Fool recommends Urban Outfitters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.