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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Urban Outfitters (URBN) and Ermenegildo Zegna N.V. (ZGN). But which of these two stocks is more attractive to value investors?

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Key Takeaways URBN's Nuuly revenues rose 34.5% in Q1 fiscal 2027, driven by continued subscriber growth.Nuuly added about 110,000 subscribers year over year, nearing 500,000 active subscribers.URBN's Nuuly posted a $10M operating profit with a 6% operating margin as scale improved profitability. Urban Outfitters Inc. (URBN - Free Report) Nuuly subscription business continues to stand out as one of the company’s fastest-growing segments, reinforcing the value of its diversified operating model. During the first quarter of fiscal 2027, Nuuly generated $167.3 million in revenues, representing a 34.5% year-over-year increase. The performance was primarily driven by continued growth in subscribers, highlighting rising consumer acceptance of apparel rental as a complementary alternative to traditional retail.

Subscriber expansion remained the key growth catalyst. Average active subscribers increased 33% year over year, adding roughly 110,000 subscribers versus the prior-year period. Management noted that the platform is now approaching 500,000 active subscribers, reflecting sustained demand and effective customer acquisition efforts. Healthy retention rates, combined with targeted marketing campaigns, continue to support consistent subscriber growth and strengthen customer engagement.

Nuuly's financial performance also demonstrated improving operating efficiency. The business generated $10 million in operating profit, translating into a 6% operating margin during the quarter. Operating leverage from the expanding subscriber base more than offset continued investments in marketing, underscoring the platform's ability to scale profitably while maintaining a disciplined approach to long-term growth.

Profitability also continued to improve as Nuuly scaled its operations. Subscription segment gross profit increased 39%, while the gross margin expanded by 85 basis points to 28.7%. Higher sales, supported by a growing subscriber base, helped drive stronger unit economics and demonstrated the business's ability to generate increasing profitability alongside rapid revenue growth.

Management remains focused on expanding Nuuly while improving profitability. The company believes its ability to grow subscribers alongside stronger operating economics highlights the scalability of the business and reinforces confidence in its significant long-term growth potential. Our model estimates that the net sales of the Nuuly segment will increase 20% year over year in fiscal 2027.

URBN’s Price Performance, Valuation & EstimatesShares of Urban Outfitters have lost 0.7% over the past three months compared with the industry’s 2.7% decline.

Image Source: Zacks Investment Research

From a valuation standpoint, URBN trades at a trailing price-to-sales ratio of 0.96X, below the industry’s average of 1.48X. It has a Value Score of B.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Urban Outfitters’ fiscal 2027 earnings implies year-over-year growth of 12.7%, while the same for fiscal 2028 indicates an uptick of 10.2%. Estimates for fiscal 2027 and 2028 have been revised upward by 5 cents and 7 cents, respectively, over the past seven days.

Image Source: Zacks Investment Research

URBN currently sports a Zacks Rank #1 (Strong Buy).

Other Key Picks in RetailGenesco Inc. (GCO - Free Report) is a Nashville-based specialty retail and branded company. It sells footwear and accessories in retail stores. The company flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings indicates growth of 55.2% from the year-ago actuals. GCO delivered a trailing four-quarter average earnings surprise of 3.8%.

Designer Brands Inc. (DBI - Free Report) designs, produces and retails footwear and accessories. It offers shoes, boots, sandals, sneakers, socks, handbags and accessories. It currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Designer Brands’ current fiscal-year earnings and sales suggests growth of 137.5% and 0.5%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 112.8%.

Tapestry, Inc. (TPR - Free Report) is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The company sports a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales indicates growth of 36.3% and 13.8%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of URBN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Urban Outfitters remains a Buy, supported by a debt-free balance sheet, robust cash flow, and aggressive expansion plans. Q1 FY27 saw net sales up ~11.4%, EPS up ~12%, and strong growth in the Nuuly subscription segment, driving both revenue and valuable consumer data. URBN is increasing FY27 CAPEX to $475 million, prioritizing logistics, store expansion, and technology, while executing significant buybacks yielding ~5%.

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Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Urban Outfitters (URBN - Free Report) Urban Outfitters, Inc. was founded in 1970 and is headquartered in Philadelphia, PA. It is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company’s key brands include Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly. Anthropologie also includes the Terrain and Maeve brands. Free People also includes FP Movement. The company operates in North America and Europe, and also sells through franchise partners in the Middle East.

URBN is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Retail-Wholesale stock. URBN has a Momentum Style Score of A, and shares are up 1.2% over the past four weeks.

For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.17 to $6.01 per share. URBN boasts an average earnings surprise of +12.2%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, URBN should be on investors' short list.

Key Takeaways URBN reported record Q1 revenues, with positive comparable sales across every retail brand.ANF delivered its 14th straight quarter of revenue growth, led by Abercrombie and Hollister momentum.Both retailers are investing in AI, digital commerce and omnichannel capabilities to support growth. Urban Outfitters, Inc. (URBN - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) are two of the most influential specialty apparel retailers competing for market share in the global fashion and lifestyle industry.

While Urban Outfitters has built a diversified portfolio spanning Urban Outfitters, Anthropologie, Free People, FP Movement and the fast-growing Nuuly rental platform, Abercrombie has transformed itself into a modern lifestyle retailer led by the Abercrombie and Hollister brands. Both companies generate the majority of their revenues through direct-to-consumer channels while leveraging physical stores, digital commerce and omnichannel capabilities to strengthen customer engagement.

The comparison between URBN and ANF is especially compelling as both retailers continue gaining market share in an otherwise highly competitive apparel industry through differentiated brand portfolios, digital innovation and disciplined inventory management. Although they target overlapping fashion-conscious consumers, their strategies differ meaningfully. Urban Outfitters relies on a multi-brand ecosystem serving diverse demographics and lifestyle categories, while Abercrombie focuses on elevating two global brands through premium positioning and international expansion.

Let us dive into the two companies’ key statistics, market share, valuation, dividend strategies and stock performances to determine which is better positioned for growth in 2026.

The Case for URBNUrban Outfitters' biggest competitive strength lies in its highly diversified business model, which continues to deliver consistent growth across multiple brands and channels. Unlike many specialty retailers that rely on a single banner, the company generates revenues through Urban Outfitters, Anthropologie, Free People, FP Movement, its wholesale operations and the rapidly expanding Nuuly subscription platform. This diversified portfolio helped URBN post its seventh consecutive quarter of record sales and earnings, with first-quarter revenues rising 11% year over year to a record $1.5 billion.

Every retail brand reported positive comparable sales, while four of five brands generated record first-quarter revenues. Nuuly's 35% revenue growth and wholesale revenue growth of 25% further demonstrate that URBN's growth engine extends well beyond traditional retail, reducing dependence on any single fashion cycle and allowing the company to consistently capture market share across multiple consumer segments. Management believes this diversification remains one of the company's strongest competitive advantages.

Another key strength is URBN's ability to grow brands while preserving their unique identities. Free People continues to post industry-leading momentum, FP Movement is rapidly emerging as a differentiated activewear brand, Anthropologie has now delivered more than five years of positive comparable sales, and Urban Outfitters itself is regaining momentum in both North America and Europe. The Urban Outfitters brand generated 9% comparable sales growth globally, driven by double-digit new customer acquisition, strong full-price selling and successful marketing initiatives. Management also highlighted that the European business continues to gain meaningful market share despite a weak regional retail backdrop, reflecting the strength of its merchandise assortment and brand positioning.

Technology and disciplined capital allocation further strengthen URBN's long-term investment case. The company continues to invest aggressively in artificial intelligence across merchandising, personalization, logistics, product development, fraud prevention and customer service to improve productivity and accelerate decision-making. AI-powered recommendation engines, search capabilities and automated customer support are already enhancing the customer experience, while technology investments are expected to shorten product development cycles and improve inventory productivity over time.

The Case for ANFAbercrombie continues to benefit from one of the strongest brand transformations in the specialty apparel industry. The company delivered its 14th consecutive quarter of revenue growth and another record first quarter despite geopolitical disruptions in parts of Europe and the Middle East. Revenues increased to $1.1 billion, while operating income and earnings per share exceeded expectations. Growth remained broad-based across the Americas and APAC, supported by healthy customer traffic, stable conversion rates and continued pricing power. Management emphasized that both Abercrombie and Hollister continue to resonate with their respective target customers, allowing the company to maintain positive average unit retail growth while controlling promotional activity. This disciplined operating model has enabled ANF to consistently deliver profitable growth even in a volatile retail environment.

The company's two-brand strategy continues to strengthen its competitive positioning. Abercrombie has successfully evolved into an elevated lifestyle brand serving millennials and older Gen Z consumers, while Hollister maintains strong relevance among teens through fashion-forward assortments and culturally relevant marketing campaigns. Product innovation, strategic collaborations with brands such as Sperry and Kappa, expansion into categories like Abercrombie Baby & Toddler, and continued investment in larger-format stores provide multiple avenues for incremental growth.

ANF is also building a stronger long-term foundation through digital transformation and disciplined capital allocation. During the quarter, the company successfully completed its multi-year merchandising ERP implementation, creating a modern technology platform that supports faster product development, global partnerships and future channel expansion. Artificial intelligence is increasingly being embedded across forecasting, inventory planning, customer service and digital commerce to improve efficiency and enhance customer engagement.

How Does the Zacks Consensus Estimate Compare for URBN & ANF?The Zacks Consensus Estimate for Urban Outfitters’ fiscal 2027 earnings implies year-over-year growth of 10.5%, whereas the same for fiscal 2028 indicates an uptick of 9.9%. Estimates for fiscal 2027 and 2028 have been revised upward by 0.7% and 0.8%, respectively, in the past 30 days.

EPS Estimate Trend of URBN

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Abercrombie’s fiscal 2026 and 2027 EPS suggests year-over-year growth of 7.7% and 10%, respectively. The EPS estimates have moved down by a penny to $10.62 in the past 30 days, whereas for 2027, the estimates have moved down by 10 cents to $11.69.

EPS Estimate Trend of ANF

Image Source: Zacks Investment Research

Price Performance & Valuation of URBN & ANFURBN currently trades at a forward 12-month P/E ratio of 11.42X, below the Zacks Retail – Apparel and Shoes industry average of 15.14X, suggesting the stock remains reasonably valued despite its strong operating momentum. ANF, meanwhile, trades at a lower forward P/E of 8.09x, which may appeal to value-oriented investors but also indicates the market is assigning a greater degree of uncertainty to its earnings outlook amid regional headwinds and a more concentrated two-brand portfolio.

While both retailers appear attractively valued relative to the industry average, URBN's premium to ANF is supported by its broader portfolio diversification, multiple growth engines across retail, wholesale and subscription, and a longer runway for margin expansion and international growth.

Image Source: Zacks Investment Research

This positive fundamental outlook is also reflected in recent share price performance. URBN stock has gained 16.6% over the past three months, comfortably outperforming ANF's modest 0.3% rise as well as the industry's 5.7% gain. The outperformance underscores investors' confidence in Urban Outfitters' diversified growth strategy, record operating performance, expanding market share across multiple brands and continued investments in digital capabilities, AI and its fast-growing Nuuly subscription business. By comparison, Abercrombie's muted stock performance suggests investors remain more cautious despite the company's healthy fundamentals, as it continues to navigate regional headwinds in EMEA and execute on growth initiatives across its two-brand portfolio.

Image Source: Zacks Investment Research

The VerdictBoth Urban Outfitters and Abercrombie remain fundamentally strong specialty apparel retailers with compelling long-term growth opportunities. Abercrombie has executed an impressive brand transformation, continues to deliver consistent sales growth and is investing in digital capabilities and international expansion. However, Urban Outfitters stands out with its broader and more diversified portfolio, multiple growth engines across retail, wholesale and subscription, accelerating AI initiatives and stronger earnings momentum. The company has also demonstrated superior stock performance, upward earnings estimate revisions and greater resilience through its multi-brand strategy.

URBN currently carries a Zacks Rank #2 (Buy), whereas ANF has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Urban Outfitters (URBN) or Ermenegildo Zegna N.V. (ZGN). But which of these two stocks presents investors with the better value opportunity right now?

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Urban Outfitters (URBN - Free Report) Urban Outfitters, Inc. was founded in 1970 and is headquartered in Philadelphia, PA. It is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company’s key brands include Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly. Anthropologie also includes the Terrain and Maeve brands. Free People also includes FP Movement. The company operates in North America and Europe, and also sells through franchise partners in the Middle East.

URBN is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 12.1; value investors should take notice.

For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.17 to $6.01 per share. URBN boasts an average earnings surprise of +12.2%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, URBN should be on investors' short list.

Urban Outfitters NASDAQ: URBN was identified through one of MarketBeat's premier stock analysis tools. 

Urban Outfitters Today

URBN

Urban Outfitters

$76.42 0.00 (0.00%)

As of 06/18/2026 04:00 PM Eastern

52-Week Range$59.53▼

$84.35P/E Ratio14.67

Price Target$87.18

The Golden Crossovers screen highlights stocks whose moving averages indicate a potential shift in market momentum. A Golden Cross occurs when a stock's short-term moving average rises above its longer-term moving average—a technical signal that many investors interpret as the beginning of a sustained upward trend.

Urban Outfitters has been in the midst of this signal for years. Emerging in 2023, the original Golden Cross was unusual in that it involved not two but three critical exponential moving averages (EMAs), resulting in a sustained uptrend. The story as of mid-2026 is that the trend is intact and the market is rebounding in a textbook trend-following entry, with its own Golden Cross. This time, the cross is only two EMAs, but no less strong, given the price action preceding it and the forces that underlie it.

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Urban Outfitters Accelerates in Q1: Momentum BuildsUrban Outfitters had a solid Q1 earnings report, outperforming on both the top and bottom lines, driven by strength across brands and channels. Revenue of $1.48 billion grew by more than 11%, accelerating sequentially and year over year, setting a company record. The strength was underpinned by digital and Nuuly, the company’s fashion rental business. Nuuly is surprisingly strong, enabling consumers to rent apparel at a fixed monthly rate. The benefits to Urban Outfitters are a growing, visible, recurring revenue stream and higher margins.

Margin and profitability are central to URBN’s stock price outlook. The company is widening margins as revenue growth accelerates, driving better-than-expected profitability and cash flow. Outperformance was logged in earnings, but the critical details were cash flow, free cash flow, and the capital returns they enable. Free cash flow allowed a 5% year-over-year reduction in average Q1 share count and is expected to remain solid in upcoming quarters.

Urban Outfitters’ balance sheet reflects its strength and cash flow. Q1 highlights include a slight reduction in cash and equivalents, offset by increases in inventory, current and property. Liabilities also increased but only marginally, leaving equity up despite the aggressive buybacks. Equity increased by more than 800 basis points, putting total liabilities well below 1X and the business in fortress-like condition. Looking ahead, unencumbered free cash flow will likely be focused toward additional buybacks.

URBN: Near-term Headwinds Provide Volatility in Early 2026Robust as Urban Outfitters’ business and capital return outlook are, there are risks for investors to be aware of. The technical risk is a resistance point at $80. The market has failed to cross the level twice, once in Q4 2025 and then again at year’s end/New Year 2026, and may fail to do so again. In this scenario, URBN stock is range-bound, with a top near $80 and a bottom near $60, and is likely to continue moving sideways until later in the year. However, analysts indicate a move to new highs, so a more bullish result is likely.

Analysts' mixed response to URBN’s Q1 release is another risk, but one with less-than-bearish implications. The four analyst revisions MarketBeat tracked following the report include a reaffirmed target below consensus and a reduced target. However, one price target reduction to $100 merely lowered the high end, still forecasting nearly 30% of upside and a fresh all-time high. A move to the $87.18 consensus, which is trending higher in 2026, would also sufficient to set a fresh all-time high.

Institutional activity also aligns with URBN’s volatility in 2026. While the group bought throughout 2025, pushing price action to record levels, they reverted to selling in Q1 2026, helping cap gains. Early indications suggest they reverted to accumulation in Q2, helping to support prices and limit downside risk. The likely outcome is that this group continues to buy on dips but may not chase price action to new highs until a new catalyst emerges.

Short-sellers are likewise a risk to near-term price action. MarketBeat data reveals a moderately high 12% short interest as of early June, sufficient to limit upside in the absence of a strong bullish catalyst. The risk is that they sell into the market, capping gains at the $80 level. Catalysts for short-covering would include sustained strength, accelerating growth, margin gains, buybacks, and a move in URBN stock above $80.

Urban to $100: An Easy Move Once Fresh Highs Are SetUrban’s move to $100 is all but assured; the signs suggest it is only a matter of time as growth, cash flow, capital returns, and sell-side sentiment strengthen. Technical indications suggest $100 is a base-case target; the existing range is worth $20, and $20 projected from $80 is $100. The Bull Case scenario suggests this market can advance by more than 30% in the near to mid-term and then continue rallying.

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Analysts See Big Upside for These 3 Retail Stocks Urban Outfitters NASDAQ: URBN reported record first-quarter fiscal 2027 sales and earnings, with management pointing to broad strength across its retail brands, continued growth at Nuuly and a strong wholesale performance.

Chief Executive Officer Dick Hayne said net sales rose 11% to $1.5 billion for the three months ended April 30, 2026, while earnings per share increased 12% to $1.30. He said the quarter marked the company’s seventh consecutive quarter of record sales and profits.

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Lululemon Slips as Rivals Rally: 3 Stocks to Watch“All retail segment brands delivered positive comps with standout performance from Free People and FP Movement,” Hayne said.

Retail Brands Post Positive Comps Co-President and Chief Operating Officer Frank Conforti said total URBN sales growth was partly driven by a 6% increase in retail segment comparable sales, with digital comps slightly ahead of store comps. Four of the company’s five brands posted record first-quarter sales, he said.

Analysts See 180% Upside for Rent the Runway: Should You Buy?Anthropologie delivered a 2% retail segment comp, extending a streak of more than five years of positive comps, according to Conforti. He said the brand had a slow start as it cleared slower-moving winter products, but performance improved in March and April as spring merchandise arrived. Strength in women’s apparel, shoes and home offset weakness in accessories.

Tricia Smith, global CEO of The Anthropologie Group, said in the question-and-answer portion that the brand’s March and April performance returned to the “higher end” of its low-single-digit comp trend. She cited strength in pants, denim, dresses, shoes, beauty and full-price furniture sales. Smith said May month-to-date performance was more similar to the end of the first quarter than its beginning.

The Urban Outfitters brand also continued to improve. Conforti said total Urban Outfitters sales rose more than 11%, while the global retail segment comp increased 9%, with strength in both North America and Europe. In North America, digital comps outpaced stores, while in Europe, stores led digital. He cited positive comps in women’s apparel, accessories and home, along with strong regular-price sales.

Hayne later said May sales to date were “essentially in line” with the company’s second-quarter plans. On Europe, he said the market remains “reasonably soft,” particularly in Germany due in part to high energy prices, but demand for the Urban Outfitters and Free People brands in Europe was “quite brisk,” with comp store sales posting double-digit gains.

Free People and FP Movement Lead Growth Sheila Harrington, global CEO of the Urban Outfitters and Free People groups, said total Free People Group revenue increased 17% year-over-year, driven by both wholesale and retail growth. Wholesale revenue rose 26%, while the retail segment grew 14%. The group posted a 10% retail segment comp, marking its 24th consecutive quarter of positive retail segment comps.

The Free People brand delivered total revenue growth of 12%, including a 9% retail segment comp. FP Movement revenue increased 32%, supported by a 15% retail segment comp, non-comp growth, six new store openings and 48% wholesale growth.

Harrington said the group achieved record first-quarter profitability, with both Free People and FP Movement producing record low markdown rates. She attributed the performance to strong regular-price selling, product execution and marketing. Free People saw broad-based strength in tops, bottoms, intimates and accessories, while FP Movement benefited from emphasis on bottoms and bras.

Harrington also outlined a longer-term strategy to manage Free People and FP Movement as “two independent ecosystems,” rather than a parent brand and sub-brand. She said Free People’s priorities include international expansion, domestic store and wholesale modernization, brand elevation and digital platform development. For FP Movement, she highlighted consumer expansion, domestic store growth, international expansion and product innovation.

Nuuly and Wholesale Continue Double-Digit Growth Nuuly revenue grew 35% in the quarter, driven by a 33% increase in average active subscribers, or more than 110,000 additional average active subscribers compared with the prior-year quarter, Conforti said. He said Nuuly was “on the doorstep” of a half-million active subscribers.

Nuuly generated $10 million in operating profit, representing a 6% operating profit rate. Conforti said the improvement reflected operating leverage as the business scaled, partially offset by marketing investments to support subscriber growth.

The wholesale segment posted a 25% revenue increase, driven by growth across specialty and department store accounts, Conforti said.

Margins, Tariffs and Fuel Costs in Focus URBN’s gross profit dollars increased 11%, while the gross profit rate declined 16 basis points to 36.6%. Conforti said the rate decline reflected a $5 million, or 36-basis-point, one-time benefit in the prior year, partially offset by improved markdown rates at Free People and Urban Outfitters.

SG&A expense increased 12% and deleveraged by 5 basis points. Conforti noted that SG&A included a $7 million, or 47-basis-point, benefit from the favorable resolution of a legal matter. He said higher store payroll, marketing investments and technology investments contributed to the increase.

Conforti said the company is navigating higher inbound freight costs and delivery expenses tied to fuel surcharges associated with the conflict in the Middle East. He said the company is assuming those costs remain consistent for the rest of the year, with an estimated negative impact of about 45 basis points to initial merchandise markup from inbound costs and 25 basis points from outbound delivery and freight expenses.

On tariffs, Conforti said the company expects approximately $100 million in refunds from IEPA tariffs imposed last spring and plans to record the refunds as a one-time benefit in the second quarter. He said URBN is planning conservatively for a 15% across-the-board tariff on imports in the second half of the year, adding that if the estimate is “reasonably accurate,” the company expects a net favorable benefit to initial merchandise markup in the second half, after factoring in additional fuel costs.

During the quarter, URBN repurchased 4.6 million shares for approximately $300 million, reducing outstanding shares by 5%, Conforti said. Net income rose to $116 million, and operating income increased 9% to a first-quarter record of $140 million.

Company Guides for High-Single-Digit Sales Growth Chief Financial Officer Melanie Marein-Efron said URBN is planning for second-quarter total company sales growth in the high single digits. Retail segment comps are expected to grow in the mid-single digits, driven by high-single-digit positive comps at Urban Outfitters and the Free People Group and low- to mid-single-digit positive comps at Anthropologie. Nuuly revenue is expected to grow in the mid- to high-20% range, while wholesale revenue is expected to grow in the mid-teens.

For the full fiscal year, Marein-Efron said the company continues to believe it can deliver positive high-single-digit total sales growth, supported by mid-single-digit retail comps, mid-20% Nuuly revenue growth and high-single-digit wholesale growth. She said full-year gross profit margins could increase approximately 25 basis points versus last year, with second-half benefit to initial merchandise markup.

URBN plans fiscal 2027 capital expenditures of approximately $475 million, with about 35% allocated to retail store expansion and support, 50% to logistics investments and 15% to technology investments and home office expansion. Marein-Efron said the company expects to open approximately 54 new stores and close about 19 stores during the year, with net growth primarily driven by FP Movement, Free People and Anthropologie.

Hayne closed by emphasizing the company’s diversified portfolio, saying the consistency of URBN’s recent performance stems from diversification across brands, categories, geographies and channels. He said the company’s customer base has remained resilient despite macroeconomic volatility.

About Urban Outfitters NASDAQ: URBNUrban Outfitters, Inc is a global lifestyle retailer headquartered in Philadelphia, Pennsylvania. Established in 1970 by Richard Hayne, Scott Belair and Judy Wicks, the company began as a single store catering to college students in the city's historic Old City neighborhood. Over the decades, Urban Outfitters has expanded its reach and diversified its portfolio to include multiple retail concepts addressing distinct customer segments.

The company operates through several well-known brands, each offering a curated selection of apparel, footwear, accessories and home goods.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways NVIDIA Grew Earnings 140%, Revenues by 85%URBN, ELF, INTU Outperform ExpectationsMarkets Soared on a Possible End to the War on Iran Wednesday, May 20th, 2026

Market indexes advanced strongly off a slightly higher open this morning, with news that a deal to end the war in Iran may be within reach. A “letter of intent” to end the war following 30 days of negotiations has sent a surge of positive sentiment through the stock market. The Dow gained +645 points, +1.31%, the S&P 500 grew by +79 points, +1.08%, the Nasdaq +399, +1.54%, and the small-cap Russell 2000 +70 points, a gaudy +2.56%.

Time will tell how this all transpires, and last we heard there are some real disagreements regarding uranium enrichment, the Strait of Hormuz, etc. that may well be sticking points somewhere within the 30 days. But this war, which dates back to late February, would be happily ended by both the U.S. and Iran at this stage.

NVIDIA Reports Another Record Revenue Quarter
The world’s largest company by market cap ($5.38 Trillion and counting), NVIDIA (NVDA - Free Report) once again outperformed its lofty expectations for Q1 after today’s close. Earnings of $1.87 per share surpassed estimates by a solid dime, and up +140% year over year from $0.81 in the year-ago quarter. Revenues surged to a new record: $81.6 billion in the first three months of the year, +85% from Q1 last year.

The AI infrastructure business, one might say, was booming last quarter. Data Center grew by +92% year over year to $75.2 billion, with Compute revenue +77% to $60.4 billion, +18% quarter over quarter. Data Center Networking rose +199% from a year ago to $14.8 billion, +35% quarter over quarter. The company also announced an $80 billion share repurchase program, and upped their dividend a penny to $0.25 per share.

CEO Jensen Huang called this “the largest infrastructure expansion in human history,” and by dollar amount he’s probably right. Next-quarter revenues are expected to jump to $91.0 billion (the Zacks consensus had been for $84.1 billion), and this doesn’t include whatever data center compute revenues they may obtain from China in the quarter. To quote Mel Brooks, “It’s good to be da king!”

Other Earnings Reports After the Close: URBN, ELF, INTU
Urban Outfitters (URBN - Free Report) reported a solid Q1 this afternoon, with earnings of $1.30 per share nicely above the $1.12 projected, and swinging to growth year over year. Revenues of $1.48 billion up +11.4% from the prior year quarter. Free People grew +9.8%, Urban Outfitters flagship brand was +9.3%, and Anthropologie gained +1.9%. Shares are not up on this news, however, as the specter of tariffs remain.

e.l.f. Beauty (ELF - Free Report) posted an impressive fiscal Q4 after today’s close, beating on earnings by 3 cents to $0.32 per share on $449.3 million, up +35% from the prior-year quarter. The rhode acquisition assisted the company’s revenue gains, and the company came out ahead on its yearly numbers. It also expects improved growth in the new fiscal year.

Intuit (INTU - Free Report) also performed better than expected in its fiscal Q3 after the close, with earnings of $12.80 up +10% year over year and ahead of the $12.48 per share in the Zacks consensus. Revenues also grew +10% from the prior year quarter to $8.6 billion, ahead of the $8.52 billion projected. Consumer revenues grew +8%, including +7% for Turbo Tax and +15% for Credit Karma.

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Key Takeaways URBN beat Q1 earnings and sales estimates on strong Retail, Wholesale and Nuuly growth.Nuuly revenues jumped 34.5% as average active subscribers climbed 33.3% y/y.Urban Outfitters expects high-single-digit fiscal 2027 sales growth across all segments. Urban Outfitters, Inc. (URBN - Free Report) reported strong first-quarter fiscal 2027 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, both metrics improved from the prior-year quarter’s reported figures. The company delivered record first-quarter sales and profits, marking its seventh consecutive quarter of record performance.

Management highlighted that broad-based momentum across the Retail, Subscription and Wholesale segments, along with disciplined execution and strong customer engagement, supported the quarter’s performance.

During the quarter, all Retail segment brands posted positive comparable sales growth, led by standout performances at FP Group and Urban Outfitters. Nuuly continued to scale rapidly with strong subscriber growth and improving profitability, while the Wholesale segment delivered robust gains, driven by specialty account strength. Management also noted that investments in AI initiatives, customer acquisition and platform diversification are supporting long-term growth opportunities.

URBN’s Quarterly PerformanceThis lifestyle specialty retailer delivered earnings per share of $1.30, rising 12.1% year over year and surpassing the Zacks Consensus Estimate of $1.20 by 8.3%.

Net sales increased 11.4% year over year to $1,481.3 million, beating the consensus mark of $1,456 million by 1.7%. Strength spanned Retail, Wholesale and Subscription, supported by positive comparable sales at all retail brands and continued subscriber growth at Nuuly.

URBN Delivers Record Revenues on Segment MomentumTotal Retail segment net sales rose 8% year over year to $1.22 billion, while comparable Retail segment sales increased 5.6%. Growth in comparable sales was driven by high-single-digit gains in digital channel sales and mid-single-digit growth in retail store sales. The Comparable Retail segment sales increased 9.8% at FP Group, 9.3% at Urban Outfitters and 1.9% at Anthropologie. We estimated the Retail segment’s sales to increase 5.8% year over year.

Within the FP Group, total sales increased 16.6% year over year to $411.7 million due to continued momentum across both Wholesale and Retail segments. Free People brand sales increased 12%, while FP Movement brand sales jumped 32% during the quarter.

The Wholesale segment posted net sales growth of 24.8% to $93.2 million, driven by a 26.2% increase in FP Group wholesale revenues due to higher sales to specialty customers.

Nuuly, the company’s women’s apparel subscription rental service, continued to witness strong momentum. Subscription segment net sales increased 34.5% year over year to $167.3 million, driven by a 33.3% increase in average active subscribers from the prior-year quarter. We estimated the Nuuly segment’s sales to rise 29.5% year over year.

Urban Outfitters Sees Gross Margin Dip on Prior-Year BenefitGross profit rose 10.9% year over year to $542.6 million in the fiscal first quarter, mainly driven by higher net sales during the period. However, the gross margin declined 16 basis points year over year to 36.6%, which beat our estimate of 36.4%. This decrease was largely due to a one-time gain of $4.8 million, or 36 basis points, recognized in the prior-year quarter that did not repeat this quarter. Excluding this item, the underlying gross margin expanded by 20 basis points, supported by lower markdowns at FP Group and Urban Outfitters, partly offset by deleveraging in initial merchandise costs related to tariffs.

The Retail segment gross profit increased 7% year over year to $460.9 million, though the segment gross margin slipped 18 bps to 37.7%. The Wholesale segment’s gross profit rose 31% to $33.8 million, with the gross margin expanding 178 bps to 36.3%, driven by higher sales to regular-price customers. Subscription segment gross profit climbed 39% to $47.9 million, while the segment gross margin improved 85 bps to 28.7%.

Selling, general and administrative (SG&A) expenses increased 11.7% year over year to $402.9 million. The increase was primarily driven by higher store payroll expenses to support the Retail segment sales growth, increased marketing investments to support customer acquisition and sales growth in the Retail and Subscription segments, and higher technology investments tied to AI initiatives. Our model estimated SG&A expenses to increase 11.1% year over year in the fiscal first quarter.

As a percentage of net sales, SG&A expenses deleveraged 5 bps to 27.2%, which lagged our estimate of 27.8%. The quarter included a benefit of $6.9 million, or 47 bps, related to the reversal of a litigation accrual, partially offset by deleverage from higher marketing and technology spending.

URBN reported operating income of $139.7 million, up 8.9% from $128.2 million in the prior-year quarter. However, the operating margin contracted 22 bps year over year to 9.4%, reflecting SG&A deleverage despite higher gross profit dollars.

Urban Outfitters Showcases Store GrowthIn the first quarter of fiscal 2027, this Zacks Rank #2 (Buy) company opened 11 stores and closed three stores. Store openings included two Anthropologie, three Free People and six FP Movement stores, while closures included one Free People, one Urban Outfitters and one Menus & Venues location.

As of April 30, 2026, URBN operated 252 Urban Outfitters stores across North America and Europe, along with associated digital platforms. The company also operated 256 Anthropologie stores and 276 FP Group stores, including 94 FP Movement locations. In addition, URBN operated eight Menus & Venues restaurants, seven Urban Outfitters franchisee-owned stores and two Anthropologie franchisee-owned stores.

The company plans to open 54 stores and close around 19 stores in fiscal 2027. Net new store growth will be primarily driven by the expansion of FP Movement, Free People and Anthropologie locations. Specifically, the company intends to open 21 FP Movement, 12 Free People, 13 Anthropologie and eight Urban Outfitters stores in fiscal 2027.

Urban Outfitters’ Financial Health SnapshotAs of April 30, 2026, Urban Outfitters had cash and cash equivalents of $301.4 million compared with $189.4 million in the prior-year period. Total shareholders’ equity stood at $2.61 billion as of the quarter-end.

As of April 30, 2026, total inventory increased 9.5% from the prior-year period. The Retail segment’s inventory rose 10.6%, while comparable Retail segment inventory increased 10%. In contrast, the Wholesale segment’s inventory declined 1.2%. The increase in the Retail segment inventory was primarily driven by higher net sales and early inventory receipts aimed at mitigating potential shipping disruptions related to the Middle East conflict.

During the first quarter of fiscal 2027, the company repurchased and retired 4.6 million shares for approximately $300 million. As of April 30, 2026, 10 million common shares remained authorized for repurchase under the existing program.

URBN Lays Out Q2 TargetsUrban Outfitters’ management expects second-quarter fiscal 2027 total company sales to grow in the high-single-digit range, supported by continued momentum across the Retail, Wholesale and Subscription businesses.

The Retail segment’s comparable sales are projected to increase in the mid-single-digit range, driven by high-single-digit positive comparable sales growth at Urban Outfitters and FP Group, while Anthropologie is expected to deliver low to mid-single-digit positive comparable sales growth. Nuuly is expected to post mid to high-20% revenue growth on the back of continued subscriber momentum, while the Wholesale segment is projected to generate mid-teens growth.

For the fiscal second quarter, URBN expects the gross profit margin to be flat to decline 25 basis points year over year. The anticipated pressure primarily reflects lower initial merchandise margins due to higher tariffs than the last year, along with elevated fuel surcharge costs tied to the Middle East conflict.

Management noted that current oil surcharges are expected to remain in place for the remainder of fiscal 2027 and are estimated to create a 70-basis-point unfavorable impact per quarter through higher inbound freight and delivery expenses.

Management expects fiscal second-quarter SG&A growth to be at or slightly ahead of sales growth due to higher marketing investments across brands to support customer acquisition, along with increased technology and AI-related investments.

URBN’s FY27 OutlookFor fiscal 2027, management continues to expect positive high-single-digit total company sales growth. This outlook is expected to be supported by mid-single-digit Retail segment comparable sales growth, mid-20% revenue growth at Nuuly and high-single-digit growth in the Wholesale segment.

URBN expects the fiscal 2027 gross profit margin to increase by 25 basis points year over year, with the second half anticipated to benefit from improved initial merchandise margins. The company also expects to receive $100 million in tariff refunds in the fiscal second quarter related to previously imposed IEEPA tariffs, which management plans to record as a one-time benefit.

For the full year, SG&A growth is expected to be in line with sales growth, while inventory growth is projected to remain at or below the pace of sales growth as the company focuses on improving product turns.

Capital expenditure for fiscal 2027 is planned at approximately $475 million. About 35% of the spending is expected to support retail store expansion and store-related investments, nearly 50% will be allocated toward logistics investments and automation capabilities, while the remaining 15% will support technology initiatives and home office expansion.

Management also expressed confidence in the underlying health of the business, highlighting strong momentum at Free People and FP Movement, continued progress at Urban Outfitters in North America and Europe, improving trends at Anthropologie and Nuuly’s path toward its long-term $1 billion revenue opportunity. The company believes its diversified portfolio positions URBN for continued positive comparable sales growth, margin expansion and record profitability in fiscal 2027.

URBN Stock Past 3-Month Performance

Image Source: Zacks Investment Research

Shares of this company have gained 8.7% in the past three months against the industry’s 16.7% decline.

Other Stocks to ConsiderWe have highlighted three other top-ranked stocks, namely, Tapestry, Inc. (TPR - Free Report) , Victoria's Secret & Co. and Levi Strauss & Co. (LEVI - Free Report) .

Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales indicates growth of 36.3% and a decline of 13.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.

Victoria's Secret is a specialty retailer of women's intimates, sleepwear, apparel, sport and swimwear, and prestige fragrances and body care. It currently has a Zacks Rank of 2 (Buy). The company delivered a trailing four-quarter earnings surprise of 55.1%, on average.

The Zacks Consensus Estimate for VSCO’s current fiscal-year sales and earnings indicates growth of 6.2% and 16.3%, respectively, from the year-ago reported numbers.

Levi Strauss designs and markets jeans, casual wear and related accessories for men, women and children. It currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Levi Strauss’ current fiscal-year earnings and sales suggests growth of 11.9% and 5.2%, respectively, from the year-ago actuals. LEVI delivered a trailing four-quarter average earnings surprise of 21.4%.

Urban Outfitters Inc (NASDAQ:URBN) reported better-than-expected earnings for the first quarter on Wednesday.

The company posted quarterly earnings of $1.30 per share which beat the analyst consensus estimate of $1.16 per share. The company reported quarterly sales of $1.481 billion which beat the analyst consensus estimate of $1.449 billion.

“We are pleased to report record first quarter sales and earnings driven by positive retail segment ‘comps’ at all brands and impressive double-digit growth in both our Wholesale and Subscription segments,” said Richard A. Hayne, Chief Executive Officer. “Our customers remain engaged and are responding to compelling fashion trends, giving us confidence in URBN’s continued success.”

Urban Outfitters shares fell 0.5% to trade at $71.30 on Thursday.

These analysts made changes to their price targets on Urban Outfitters following earnings announcement.

B of A Securities analyst Lorraine Hutchinson maintained the stock with a Buy and raised the price target from $85 to $90. JP Morgan analyst Matthew Boss maintained the stock with an Overweight rating and raised the price target from $94 to $97. Considering buying URBN stock? Here’s what analysts think:

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Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

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Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Urban Outfitters (URBN - Free Report) Founded in 1970 and based in Philadelphia, Pennsylvania, Urban Outfitters Inc. (URBN - Free Report) is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gifts products. The company’s merchandises are generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. The company has operations in the United States, Canada and Europe.

URBN is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

Momentum investors should take note of this Retail-Wholesale stock. URBN has a Momentum Style Score of A, and shares are up 9.4% over the past four weeks.

Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.14 to $5.97 per share. URBN also boasts an average earnings surprise of +12.2%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, URBN should be on investors' short list.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Urban Outfitters (URBN - Free Report) Urban Outfitters, Inc. was founded in 1970 and is headquartered in Philadelphia, PA. It is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company’s key brands include Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly. Anthropologie also includes the Terrain and Maeve brands. Free People also includes FP Movement. The company operates in North America and Europe, and also sells through franchise partners in the Middle East.

URBN is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 11.98; value investors should take notice.

For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.14 to $5.97 per share. URBN boasts an average earnings surprise of +12.2%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, URBN should be on investors' short list.

Urban Outfitters, Inc. (URBN) Shareholder/Analyst Call Prepared Remarks Transcript

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Urban Outfitters (URBN - Free Report) and Ermenegildo Zegna N.V. (ZGN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Urban Outfitters has a Zacks Rank of #2 (Buy), while Ermenegildo Zegna N.V. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that URBN has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

URBN currently has a forward P/E ratio of 12.16, while ZGN has a forward P/E of 32.20. We also note that URBN has a PEG ratio of 1.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZGN currently has a PEG ratio of 4.71.

Another notable valuation metric for URBN is its P/B ratio of 2.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ZGN has a P/B of 5.01.

These metrics, and several others, help URBN earn a Value grade of A, while ZGN has been given a Value grade of D.

URBN stands above ZGN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that URBN is the superior value option right now.

After reaching an important support level, Urban Outfitters, Inc. (URBN - Free Report) could be a good stock pick from a technical perspective. URBN recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.

There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.

There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

URBN has rallied 5.1% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates URBN could be poised for a breakout.

The bullish case solidifies once investors consider URBN's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 3 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Investors should think about putting URBNon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.