XML 83 R21.htm IDEA: XBRL DOCUMENT v2.4.0.6
Segment Reporting
 12 Months Ended
Jan. 31, 2013
Segment Reporting

14. 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 476 stores under the retail names “Urban Outfitters,” “Anthropologie,” “Free People,” “Terrain” and “BHLDN” and includes their direct-to-consumer channels, which consist of five catalogs and ten websites as of January 31, 2013. Our retail stores and direct-to-consumer channels are considered one operating segment. Net sales from the Retail segment accounted for more than 94% of total consolidated net sales for the fiscal years ended January 31, 2013, 2012 and 2011, respectively. The remaining net sales are derived from the Company’s Wholesale segment that distributes apparel to its Retail segment and to approximately 1,400 better department and specialty retailers worldwide.

The Company has aggregated its retail stores and direct-to-consumer channels into a Retail segment based upon their shared 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 reporting 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, deferred taxes and prepaid expenses, 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.

Our omni-channel strategy allows customers to experience our brands, rather than a channel within the brand, by providing a seamless approach to the customer shopping experience. We try to deliver the best customer experience possible through an integration of all available shopping channels including stores, websites and catalogs (online and through mobile devices). Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of our fulfillment centers or from a different store location if an item is out-of-stock at the original store. Direct-to-consumer orders are primarily shipped to our customers through our fulfillment centers but may also be shipped from any store or a combination of fulfillment center and store depending on the availability of a particular item. These capabilities allow us to better serve customers and helps us to fill orders that otherwise may have been cancelled due to out-of-stock positions.

 

The accounting policies of the operating segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies.” Both the Retail and Wholesale segments are highly diversified. No customer comprises more than 10% of the Company’s consolidated net sales. A summary of the information about the Company’s operations by segment is as follows:

 

     Fiscal Year  
     2013     2012     2011  

Net sales

       

Retail operations

    $ 2,646,284      $ 2,340,794      $ 2,153,792   

Wholesale operations

      154,957        140,657        124,768   

Intersegment elimination

      (6,316 )      (7,650 )      (4,458 ) 
  

 

 

    

 

 

    

 

 

  

Total net sales

    $ 2,794,925      $ 2,473,801      $ 2,274,102   
  

 

 

    

 

 

    

 

 

  

Income from operations

       

Retail operations

    $ 366,139      $ 276,581      $ 418,403   

Wholesale operations

      35,783        26,919        23,372   

Intersegment elimination

      (610 )      (709 )      (389 ) 
  

 

 

    

 

 

    

 

 

  

Total segment operating income

      401,312        302,791        441,386   

General corporate expenses

      (27,027 )      (18,066 )      (27,183 ) 
  

 

 

    

 

 

    

 

 

  

Total income from operations

    $ 374,285      $ 284,725      $ 414,203   
  

 

 

    

 

 

    

 

 

  

Depreciation expense for property and equipment

       

Retail operations

    $ 112,645      $ 99,645      $ 91,267   

Wholesale operations

      743        1,094        1,136   
  

 

 

    

 

 

    

 

 

  

Total depreciation expense for property and equipment

    $ 113,388      $ 100,739      $ 92,403   
  

 

 

    

 

 

    

 

 

  

Inventories

       

Retail operations

    $ 265,787      $ 237,825     

Wholesale operations

      16,624        12,248     
  

 

 

    

 

 

    

Total inventories

    $ 282,411      $ 250,073     
  

 

 

    

 

 

    

Property and equipment, net

       

Retail operations

    $ 730,489      $ 681,501     

Wholesale operations

      2,927        3,478     
  

 

 

    

 

 

    

Total property and equipment, net

    $ 733,416      $ 684,979     
  

 

 

    

 

 

    

Cash paid for property and equipment

       

Retail operations

    $ 168,530      $ 189,311      $ 142,791   

Wholesale operations

      345        699        851   
  

 

 

    

 

 

    

 

 

  

Total cash paid for property and equipment

    $ 168,875      $ 190,010      $ 143,642   
  

 

 

    

 

 

    

 

 

  

 

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:

 

     Fiscal Year  
     2013      2012      2011  

Net sales

         

Domestic operations

    $ 2,423,155       $ 2,169,976       $ 2,027,074   

Foreign operations

      371,770         303,825         247,028   
  

 

 

     

 

 

     

 

 

  

Total net sales

    $ 2,794,925       $ 2,473,801       $ 2,274,102   
  

 

 

     

 

 

     

 

 

  

Property and equipment, net

         

Domestic operations

    $ 586,068       $ 557,512      

Foreign operations

      147,348         127,467      
  

 

 

     

 

 

     

Total property and equipment, net

    $ 733,416       $ 684,979