Urban Outfitters, Inc. (URBN) has added 25 new stores in 2009 and intends to open 32 to 34 new stores for the full year as its growth plans remain intact despite the difficult economic environment.

If retail has been struggling, you couldn’t tell from Urban Outfitters third quarter results. The company reported on Nov 12 that it saw record earnings for the quarter ending Oct 31, 2009. Earnings per share were 36 cents, or 1 cent better than the Zacks Consensus Estimate. Net sales rose 6% over the year ago period to $506 million.

Comparable store sales rose at all three of its segments. Anthropologie climbed 3%, Free People increased 13% and Urban Outfitters grew 5%. The Wholesale segment net sales declined 10% while direct-to-consumer net sales rose 21%.

Urban Outfitters has successfully been cutting inventories which has boosted the bottom line. Inventories decreased by 8%, or $18 million, compared to a year ago. Comparable store inventories declined by 15%. The company believes this will leave them well positioned for the holiday season.

Zacks Consensus Estimates Rise

Analysts are still revising their estimates after the earnings results, but estimates are already jumping. The fourth quarter Zacks Consensus Estimate is up a penny to 37 cents in the last 7 days. Similarly, full year estimates are also up a penny to $1.18 per share in the same time period.

Analysts are bullish about fiscal 2010, expecting earnings to grow 23.73%.

The 2-Year Chart

Urban Outfitters is a Zacks #2 Rank (buy) stock. After the solid earnings results, the stock hit new 52-week highs. You can see the big bounce off the Nov 2008 and then the March lows in the 2-year chart below.

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