$URBN Breaks Trend Line Support, Look Out Below

$URBN has broken key trend line support and is set for lower prices. Add in the overwhelming bearish sentiment among retailers and we could go a lot lower than investors think.

After reporting Q3 earnings last night, here are the highlights:

Urban Outfitters (NASDAQ:URBN) slides after a slight miss with its Q3 report.

Comparable retail segment net sales rose 3% during the quarter, driven by growth in the digital channel which helped to offset negative retail store sales.

Comparable retail segment sales: Free People +9%, Urban Outfitters flat growth and Anthropologie Group +4%.

Wholesale segment net sales fell 7%.

Gross margin was 32.5% of sales vs. 32.7% consensus and 34.7% a year ago.

SG&A expenses as a percentage of sales rose 10 bps to 24.9%.

Comparable retail segment inventory increased 9% at cost during the quarter.

"Looking ahead to Q4, we’re encouraged by positive sales-to-date but realize our highest volume days have yet to be written," says Urban Outfitters CEO Richard Hayne.

As always, use protective stops and trade with caution.

Good luck to all!