ISI: Urban Outfitters Still Has a Long Way to Go

In a research report released earlier today by ISI, Urban Outfitters (NASDAQ: URBN) has seen slight improvement lately, but still has a long way to go since reporting a disappointing 4Q.

ISI explained in the report, “Urban Outfitters shares traded down 5% last night as investors digested the news that gross margins will remain depressed through at least 1H12, a sign that URBN's turnaround story may still be farther from reach than many have hoped. Dick Hayne and others in URBN's revamped management team sounded genuinely upbeat about new initiatives to drive traffic and full-price selling (including greater investments in design, marketing, IT, and e-commerce), but it's hard to feel confident that 2012 will be a comp and margin recovery story given that there are few data points suggesting URBN has seen a sustainable improvement.”

ISI maintains its Hold rating and $25 PT on Urban Outfitters, which closed yesterday at $27.93.