Ahead of the Bell: Urban Outfitters

NEW YORK (AP) — A pair of analysts offered differing views on Urban Outfitters after the retailer's third-quarter results missed Wall Street's expectations.

On Monday, Urban Outfitters Inc. posted earnings of 40 cents per share on revenue of $692.9 million for the period ended Oct. 31. The company reported increased sales at Anthropologie, Free People and its namesake stores. But analysts polled by FactSet forecast slightly higher earnings of 41 cents per share on revenue of $693.1 million.

Randal Konik of Jefferies said the company's domestic store growth is near maturity. The company has more than 150 Urban Outfitters stores and more than 150 Anthropologie stores. Management's long-term goal is for no more than 200 to 250 stores per brand. The analyst also said in a client note that the retailer still has limited international exposure, as only about 15 percent of its sales come from abroad.

"We are uncertain of how well the brands can translate in a global market at this stage," Konik wrote.

The analyst maintained an "Underperform" rating but raised Urban Outfitters' price target to $25 from $24, staying in line with its earnings per share growth rate.

Janney Capital Markets' Adrienne Tennant was more upbeat on the retailer, saying that its third-quarter gross margin improved as it reduced markdowns and increased full-price selling. The analyst said that she is also encouraged by Anthropologie's ability to sell more items at full price and Urban Outfitters stores' fashion-forward product selection.

Tennant reaffirmed a "Buy" rating.

Urban Outfitters shares finished at $37.07 per share on Monday. They traded at a 52-week high of $40.65 on Sept. 11. They traded as low as $23.42 in mid-January.