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Macquarie Research’s Liz Dunn and Piper Jaffray’s Neely Tamminga debate whether Urban Outfitters’ shares are a buy or sell for investors.
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All July same store sales results coming in better than expected for many retailers -- apparel company Urban Outfitters.
Has been caught in a pricing conundrum as having limited success -- improving full price selling.
And its namesake and the -- apology store chains.
We have got two ladies here that are get ahead ticket out is on the latest can't live -- -- a senior analyst at Macquarie research she says sell this one.
But nearly -- Minggao a managing director and senior research analyst at Piper Jaffray.
She says by all right -- ominous start with you -- -- you like this stock.
You know Urban Outfitters is a classic Coke trade.
I think that people -- been pushing back the timing of this turn it keeps changing.
What we're looking for is it fashion problem is its structure problem is -- a management problem.
The second quarter is not shaping up to be a good one -- operating margins should be down sharply.
And they think they really they're retailer that has high productivity still relatively high margins and I think you can go down further.
-- she mentioned a management problem CEO Rick got Richard change.
I he has actually been selling some shares of 2008 do you think that he is the right got to leave the turnaround -- company.
Absolutely.
That confidence of this company has been restored with the founder coming back to the management ranks.
We're hearing -- actually through -- keg party for the guy internally.
The we think urban problems have been urban problems but now what.
Founder coming back to the business we think that can actually move forward in the merchandise is starting to show it live -- keg party.
-- -- Well I you know I I was drinking wine myself this weekend but I don't know what that has to do with the with the performance of the retailer I think that the fashion does look a little bit better which is -- to my point.
They're not seeing an improvement in their business.
Yet the fashion is better so is it a fashion problem or isn't just that this retailer this country its peak productivity -- -- I don't know what that nobody said.
The good news here is that we are headed into a multi year apparel recovery cycle in urban is gonna be a clear beneficiary.
Timed perfectly what them getting their sovereigns back in line.
We're seeing great sellouts and novelty -- -- bottoms.
Polka dots Brad Paisley both in -- policy in Urban Outfitters.
But the July flows we think they're gonna have some nice things to say in terms their momentum.
A live their analyst day is coming up at September do you think that that would be the time.
That that we could see a turnaround for the company are now they could -- -- come out with something like new plan.
-- -- -- -- -- -- -- Late there a lot of -- minute members of management in addition to McCain coming back to the company so.
Lot of new new heads being dedicated to this problem and it's a point in time -- I'm looking for a clear articulation of what they plan to do.
I don't think that the third quarter is when we'll see a turn -- the business but what I'm looking forward then from that September 27 meeting.
Is just an articulation of what is their vision to turn this thing a diagnosis of the problem.
And then what are the steps we're taking to turn -- ground.
All right -- last word -- -- September 27.
We think the stock will have moved before that date so it's time for investors to get on board.
I think next -- is going to be there characterization of current trends and our product and we like what we see.
Strong not arguments from both of you great ladies thank you so much really appreciate it Liz -- In nearly ten Minggao women we know aren't getting by -- but -- smile a moment -- -- --
