It’s been yet another busy day for the retail sector. On Wednesday, shares of Urban Outfitters, Inc. (NASDAQ:$URBN) were up by more than 22%. However, there are a number of analysts who believe the Q2 earnings numbers should give investors pause.
Just in case you missed it, Urban Outfitters reported sales declines yesterday. Total company sales were down from $890.6 million in 2016 to $872.9 million. Analysts polled by FactSet had expected $862.0 million. Meanwhile, comparable retail sales, which includes the comparable direct-to-consumer channel, dropped 4.9%.
“While Wall Street cheers Urban Outfitters for not doing quite so badly as forecast, the reality is that this is a lousy set of results,” said Anthony Riva of GlobalData Retail. “Not only are the numbers sequentially worse than a pretty dire first quarter, but they also show that many initiatives put into play remain a long way from delivering.”
Despite surpassing the Street expectations, Urban Outfitters still faced numerous headwinds, and analysts remain wary about the direction the company is heading in. However, investors don’t seem to be too worried about the future. “[W]e believe that Urban Outfitters is now on investors’ radar given highly encouraging quarter-to-date commentary (an outlier in the current landscape) as well as a plan to continue to turn the business around that is internally rather than externally driven,” said analysts at SunTrust Robinson Humphrey said in a note.
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