Ahead of the Bell: Urban Outfitters risesThe Associated Press
NEW YORK -- Shares of Urban Outfitters climbed in premarket trading Tuesday, the morning after the clothing and home decor company's second-quarter performance topped Wall Street's expectations.
The retailer reported earnings of 42 cents per share on revenue of $676.3 million. Analysts surveyed by FactSet predicted earnings of 33 cents per share on revenue of $672 million.
Janney Capital Markets' Adrienne Tennant said in a client note that Urban Outfitters' quarterly performance was solid and that the company's stores are stocking more fashionable clothing.
"We continue to remain confident in Urban Outfitters as a back half 2012 turnaround story, driven by reduced markdown activity and improved product at both core divisions," she wrote.
Tennant increased the retailer's price target to $40 from $36 and reaffirmed a "Buy" rating.
Laura Champine of Canaccord Genuity raised her price target for the company to $38 from $26 because she sees sales starting to build at the retailer. Sales increased 14 percent at the Urban Outfitters chain during the quarter and gained 3 percent at Anthropologie locations.
The analyst maintained a "Hold" rating.
Sterne, Agee & Leach's Margaret Whitfield boosted Urban Outfitters' price target to $28 from $30 on the quarterly earnings beat but kept a "Neutral" rating. The analyst said Anthropologie's sales still need to gain some traction, which could happen in the third quarter, with the company planning to cut prices.
Urban Outfitters Inc.'s stock gained $5.47, or 17.5 percent, to $36.75 before the market opened.