Urban Outfitters, Inc. (URBN): "I Loved The Quarter," Says Jim Cramer

We recently published 11 Fresh Stocks On Jim Cramer’s Radar. Urban Outfitters, Inc. (NASDAQ:URBN) is one of the stocks Jim Cramer recently discussed.

Urban Outfitters, Inc. (NASDAQ:URBN) is a sizable American apparel company. Its shares have gained 19.9% year-to-date, primarily due to a major 22.8% jump in May. The stock rose after the firm’s first-quarter earnings report saw it beat analyst earnings and revenue estimates. However, Urban Outfitters, Inc. (NASDAQ:URBN)’s shares fell by 10.7% in August after the firm reported its second-quarter financials. While its revenue of $1.5 billion and earnings of $1.58 both beat analyst estimates, the operating income of $156 million missed analyst estimates by a stunning 24%. While the miss was stunning, Cramer speculated that Urban Outfitters, Inc. (NASDAQ:URBN) was perhaps priced a bit too high ahead of the earnings:

“Now I think that if you look at Urban Outfitters, the problem there is it was priced to perfection. It was up 40% going in, this was every single one of their is incredibly strong, I really loved that quarter but I recognize, that it was priced for perfection. I think that you buy that stock after it comes in.”

Here are Cramer’s previous thoughts about Urban Outfitters, Inc. (NASDAQ:URBN) in May:

“I want to highlight to you three retailers that reported excellent quarters in just the last couple of days, and only one was recognized as fabulous, that’s Urban Outfitters. One’s holding on with its fingertips, that’s RL, Ralph Lauren. And then a third, TJX, that’s getting sold off, yet presents, I think, now the best buying opportunity… They each have their own value proposition. Urban Outfitters is made up of its eponymous flagship store along with Anthropologie and Free People. They’re all doing incredibly well.

But when I listened to the call, I am struck by one particular division Nuuly…. This is Urban’s apparel rental business for women, and it’s growing at a stunning 60%… Now, every single one of the divisions have positive same-store sales, but up 60% even on a small base, that is stunning. For 98 bucks a month, Nuuly lets you rent six items a month, and you can buy them at discounted prices if you like them after you wear them…. At a time when clothes can eat up a huge chunk of your disposable income, I think this is the answer, that’s value…

Look, there are a ton of terrific retailers, but these three really put up amazing numbers, and only one is being recognized. I see that as an opportunity because it’s just a matter of time before Wall Street realizes that the kings of retail came out, showed you their best stuff this quarter, and you want to get into all of them before everybody else figures out what I just told you.”

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Disclosure: None. This article is originally published at Insider Monkey.