Why Urban Outfitters Stock Jumped Today

By Steve Symington Markets Fool.com

What happened

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Shares of Urban Outfitters (NASDAQ: URBN) were up 5.4% as of 3:20 p.m. EST on Thursday, following positive forward guidance from one of its peers.

So what

With no company-specific news to report, Urban Outfitters stock surged today after competitor Abercrombie & Fitch Co. (NYSE: ANF) delivered underwhelming fourth-quarter 2016 results, with overall revenue falling 7% year over year, hurt by a 5% decline in total comparable-store sales. But the company also reported a surprise increase in comparable sales at its Hollister stores. Abercrombie followed with encouraging guidance for the coming year.

IMAGE SOURCE: URBAN OUTFITTERS.

More specifically, though comparable-store sales at Abercrombie & Fitch locations declined 13% in the fourth quarter, Hollister -- its largest brand -- achieved 1% growth and marked the first positive result for the brand in a year. Going forward, Abercrombie & Fitch also told investors to expect comparable sales trends for both brands to continue to improve throughout 2017. Shares of Abercrombie surged as much as 17% on the news, bringing several other industry names, including Urban Outfitters, along for the ride on this generally down day for the broader market.

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Now what

Keep in mind that Urban Outfitters is slated to release its own fourth-quarter results on March 7, 2017. In the meantime, Urban Outfitters already confirmed in a press release last month that its own net sales climbed 2% year over year for the fourth quarter, to a company-record $1.03 billion, on flat comparable-retail-segment sales.

Investors should learn if Urban Outfitters expects to share Abercrombie's anticipated outperformance in the coming year when the company releases its results. And because our market is a decidedly forward-looking machine, it seems safe to expect any post-earnings movements in Urban Outfitters stock to be closely tied with what management says next week.

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Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.