Urban Outfitters posted stronger-than-expected fourth quarter earnings Tuesday, with sales over the holiday period. Urban Outfitters brand sales increased 4% from the same period last year, the group said, while Free People sales rose 4% and Anthropolgie Group sales edged 2% higher. Gross margin also improved for the period of 33.3%. However, guidance for the upcoming quarter was dismal where the company is forecasting first-quarter comps to be flat to down a low-single-digit.
Urban Outfitters’ slow start to the first quarter could “swing positive” in the second quarter due to the company’s ability to “pivot intra-season” and correct any inventory or sales mishaps, Bank of America’s Lorraine Hutchinson said in a research report. As such, comps should reverse back to positive territory as soon as the second quarter.
Let me just get to put, Urban Oufitters’ is a $20 and the options traders completely got this one wrong.
Options traders have grown increasingly optimistic on the retailer ahead of earnings. The stock’s extremely elevated 10-day call/put volume ratio of 8.16 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 98th annual percentile. It other words, URBN calls have been purchased over puts at a faster-than-usual clip in the past two weeks.
Monthly Chart (Curve Timeframe) – Monthly demand is at $18 and monthly supply is at $48.
Weekly Chart (Trend Timeframe) – the trend is down.
Daily Chart (Entry) – although I don’t see an entry at this moment, the chart suggests price is heading down to the daily demand at $21.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.