Diamonds and Dogs
One retailer is working. Urban Outfitters (URBN) is up 15% not far from a 52 week high after beating earnings estimates by 11 cents on in-line revenue. For the three and six months ended July 31, 2016, the gross profit rate increased by 179 basis points and 142 basis points versus the prior year's comparable periods, respectively. As of July 31, 2016, total inventory decreased by $17 million, or 4%, on a year- over-year basis. Analysts liked what they heard with at least six upgrades and new price targets as high as $40 a share.
Target missed the mark. Retailer, Target (TGT) dropped 6% following earnings. The company actually beat estimates on line revenue, but then proceeded to lower third quarter guidance and full year guidance as the second half of the year same store sales comps are expected to be below estimates. Where did all the shoppers go? Urban Outfitters?
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