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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.