11. Segment Reporting

The Company is a global retailer of lifestyle-oriented general merchandise with two reporting segments—"Retail" and "Wholesale." The Company's Retail segment consists of the aggregation of its five brands operating through 382 stores under the retail names "Urban Outfitters," "Anthropologie," "Free People," "BHLDN " and "Terrain" and includes its direct marketing campaigns, which consisted of five catalogs and nine web sites as of April 30, 2011. The Company operates its retail stores and its direct marketing campaigns as a single operating segment. Net sales from the Retail segment accounted for approximately 94% and 95% of total consolidated net sales for the three months ended April 30, 2011 and April 30, 2010, respectively. The remainder is derived from the Company's Wholesale segment, which manufactures and distributes apparel to its retail segment and to approximately 1,400 better department and specialty retailers worldwide through its Free People brand.

The Company has aggregated its retail stores and associated direct marketing campaigns into a retail segment based upon their unique management, customer base and economic characteristics. Reporting in this format provides management with the financial information necessary to evaluate the success of the segments and the overall business. The Company evaluates the performance of the segments based on the net sales and pre-tax income from operations (excluding inter-company charges) of the segment. Corporate expenses include expenses incurred and directed by the corporate office that are not allocated to segments. The principal identifiable assets for each operating segment are inventories and property and equipment. Other assets are comprised primarily of general corporate assets, which principally consist of cash and cash equivalents, marketable securities, and other assets, and which are typically not allocated to the Company's segments. The Company accounts for inter-segment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases.

The accounting policies of the operating segments are the same as those described in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2011. Both the Retail and Wholesale segments are highly diversified. No customer comprises more than 10% of sales. A summary of the information about the Company's operations by segment is as follows:


	April 30, 2011		January 31, 2011		April 30, 2010
Inventories
Retail operations	$	251,935	$	213,420	$	214,760
Wholesale operations		12,343		16,141		7,224

Total inventories	$	264,278	$	229,561	$	221,984

Property and equipment, net
Retail operations	$	597,600	$	582,241	$	543,923
Wholesale operations		3,649		4,105		4,652

Total property and equipment, net	$	601,249	$	586,346	$	548,575


	Three Months Ended April 30,
	2011			2010
Net sales
Retail operations	$	493,462		$	454,808
Wholesale operations		31,583			25,970
Intersegment elimination		(1,026	)		(817	)

Total net sales	$	524,019		$	479,961

Income from operations
Retail operations	$	62,968		$	83,858
Wholesale operations		2,958			5,163
Intersegment elimination		(71	)		(65	)

Total segment operating income		65,855			88,956
General corporate expenses		(7,018	)		(6,745	)

Total income from operations	$	58,836		$	82,211

The Company has foreign operations in Europe and Canada. Revenues and long-lived assets, based upon the Company's domestic and foreign operations, are as follows:


	April 30, 2011		January 31, 2011		April 30, 2010
Property and equipment, net
Domestic operations	$	499,025	$	497,521	$	482,241
Foreign operations		102,224		88,825		66,334

Total property and equipment, net	$	601,249	$	586,346	$	548,575


	Three Months Ended April 30,
	2011		2010
Net sales
Domestic operations	$	466,851	$	433,985
Foreign operations		57,168		45,976

Total net sales	$	524,019	$	479,961