Summary
- URBN's quarterly revenue growth has stalled.
- The bigger the company gets, the harder it is to grow its top line.
- Future margin pressure could hurt earnings and sentiment for the stock.
- Sell URBN.
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Source: Barron's
Urban Outfitters (URBN) reported quarterly revenue of $864.41 million, GAAP EPS of $0.31 and non-GAAP EPS of $0.31. The company beat on revenue and EPS. I had the following takeaways on the quarter.
Revenue Growth Stalled
Revenue of $864 million was a record for the company. However, the bigger the company gets the more difficult it is to grow its top line. Revenue was up 1% Y/Y. This was a sharp departure from the high single-digit growth the company previously enjoyed. Revenue from the retail operations was up 1%, while wholesale revenue grew 2%.
