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Segment Reporting | 6 Months Ended
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Jul. 31, 2018
Segment Reporting [Abstract] |
Segment Reporting | 13. Segment Reporting The Company offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands. The Company operates two reportable segments—“Retail” and “Wholesale.” The Company’s Retail segment consists of the “Anthropologie,” “Bhldn,” “Free People,” “Terrain” and “Urban Outfitters” brands and the Food and Beverage division. The Anthropologie, Bhldn and Terrain brands make up the “Anthropologie Group.” As of July 31, 2018, there were 246 Urban Outfitters stores, 227 Anthropologie Group stores, 135 Free People stores, ten restaurants under the Food and Beverage division and two Urban Outfitters franchise locations. Each of Urban Outfitters, the Anthropologie Group and Free People, including their stores and digital channels, and the restaurants operated under the Company’s Food and Beverage division, are considered an operating segment. Net sales from the Retail segment accounted for approximately 90.9% and 90.8% of total consolidated net sales for the three and six months ended July 31, 2018, respectively. Net sales from the Retail segment accounted for approximately 90.6% of total consolidated net sales for the three and six months ended July 31, 2017. The remaining net sales are derived from the Company’s Wholesale segment which consists of the Free People and Anthropologie brands that sell through approximately 2,100 department and specialty stores worldwide, digital businesses and the Company’s Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People brand and home goods including gifts, tabletop and textiles under the Anthropologie brand. The Anthropologie wholesale division was established in the third quarter of fiscal 2018. The Company has aggregated its brands into the 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 intercompany 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 inventory 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 intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases. The Company’s omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers. The Company’s investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the omni-channel and not the separate store or digital channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of the Company’s fulfillment centers or from a different store location if an item is not available at the original store. We also allow customers to view in-store inventory from our websites and mobile applications. Digital orders are primarily shipped to the Company’s customers through its fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of a particular item. In addition, customers can pick up digital orders and return certain merchandise purchased through digital channels at retail locations. As the Company’s customers continue to shop across multiple channels, the Company has adapted its approach towards meeting this demand. Due to the availability of like product in a variety of shopping channels, the Company sources these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow the Company to better serve its customers and help it to complete a sale that otherwise may not have occurred due to out-of-stock positions. We manage and analyze our performance based on a single omni-channel rather than separate channels and believe that the omni-channel results present the most meaningful and appropriate measure of our performance. The accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2018. Both the Retail and Wholesale segments are highly diversified. No one customer constitutes more than 10% of the Company’s total consolidated net sales. A summary of the information about the Company’s operations by segment is as follows:
|  | Three Months Ended |  |  | Six Months Ended |
|  | July 31, |  |  | July 31, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail operations |  | $ | 902,027 |  |  | $ | 790,628 |  |  | $ | 1,677,591 |  |  | $ | 1,480,980 |
Wholesale operations |  |  | 93,293 |  |  |  | 84,254 |  |  |  | 176,234 |  |  |  | 157,203 |
Intersegment elimination |  |  | (2,866 | ) |  |  | (1,951 | ) |  |  | (5,683 | ) |  |  | (4,062 | )
Total net sales |  | $ | 992,454 |  |  | $ | 872,931 |  |  | $ | 1,848,142 |  |  | $ | 1,634,121 |
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail operations |  | $ | 106,423 |  |  | $ | 69,003 |  |  | $ | 158,295 |  |  | $ | 88,908 |
Wholesale operations |  |  | 19,815 |  |  |  | 20,238 |  |  |  | 34,620 |  |  |  | 36,507 |
Intersegment elimination |  |  | 48 |  |  |  | 20 |  |  |  | 82 |  |  |  | 30 |
Total segment operating income |  |  | 126,286 |  |  |  | 89,261 |  |  |  | 192,997 |  |  |  | 125,445 |
General corporate expenses |  |  | (9,434 | ) |  |  | (14,081 | ) |  |  | (22,249 | ) |  |  | (29,229 | )
Total income from operations |  | $ | 116,852 |  |  | $ | 75,180 |  |  | $ | 170,748 |  |  | $ | 96,216 |
|  | July 31, |  |  | January 31, |  |  | July 31, |
|  | 2018 |  |  | 2018 |  |  | 2017 |
Inventory |  |  |  |  |  |  |  |  |  |  |  |
Retail operations |  | $ | 328,551 |  |  | $ | 300,493 |  |  | $ | 320,384 |
Wholesale operations |  |  | 47,106 |  |  |  | 50,902 |  |  |  | 44,792 |
Total inventory |  | $ | 375,657 |  |  | $ | 351,395 |  |  | $ | 365,176 |
Property and equipment, net |  |  |  |  |  |  |  |  |  |  |  |
Retail operations |  | $ | 804,625 |  |  | $ | 811,128 |  |  | $ | 839,987 |
Wholesale operations |  |  | 2,459 |  |  |  | 2,640 |  |  |  | 3,071 |
Total property and equipment, net |  | $ | 807,084 |  |  | $ | 813,768 |  |  | $ | 843,058 |
The following tables summarize net sales and percentage of net sales from contracts with customers by merchandise category:
|  | Three Months Ended |  |  | Six Months Ended |
|  | July 31, |  |  | July 31, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Apparel (1) |  | $ | 690,447 |  |  | $ | 599,374 |  |  | $ | 1,290,135 |  |  | $ | 1,119,487 |
Home (2) |  |  | 135,262 |  |  |  | 129,179 |  |  |  | 249,610 |  |  |  | 241,180 |
Accessories (3) |  |  | 118,335 |  |  |  | 100,354 |  |  |  | 217,110 |  |  |  | 189,942 |
Other (4) |  |  | 48,410 |  |  |  | 44,024 |  |  |  | 91,287 |  |  |  | 83,512 |
Total net sales |  | $ | 992,454 |  |  | $ | 872,931 |  |  | $ | 1,848,142 |  |  | $ | 1,634,121 |
As a percentage of net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Apparel (1) |  |  | 70 | % |  |  | 69 | % |  |  | 70 | % |  |  | 68 | %
Home (2) |  |  | 13 | % |  |  | 15 | % |  |  | 13 | % |  |  | 15 | %
Accessories (3) |  |  | 12 | % |  |  | 11 | % |  |  | 12 | % |  |  | 12 | %
Other (4) |  |  | 5 | % |  |  | 5 | % |  |  | 5 | % |  |  | 5 | %
Total net sales |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
(1) Apparel includes intimates and activewear |
(2) Home includes home furnishings, electronics, gifts and decorative items |
(3) Accessories includes footwear, jewelry and handbags |
(4) Other includes beauty, shipping and handling revenues and the Food and Beverage division |
Apparel, Home, and Accessories are sold through both the Retail and Wholesale segments. Revenue recognized from the Other category is primarily attributable to the Retail segment. The Company has foreign operations primarily in Europe and Canada. Revenues and long-lived assets, based upon the Company’s domestic and foreign operations, are as follows:
|  | July 31, |  |  | January 31, |  |  | July 31, |
|  | 2018 |  |  | 2018 |  |  | 2017 |
Property and equipment, net |  |  |  |  |  |  |  |  |  |  |  |
Domestic operations |  | $ | 730,024 |  |  | $ | 720,890 |  |  | $ | 744,388 |
Foreign operations |  |  | 77,060 |  |  |  | 92,878 |  |  |  | 98,670 |
Total property and equipment, net |  | $ | 807,084 |  |  | $ | 813,768 |  |  | $ | 843,058 |
|  | Three Months Ended |  |  | Six Months Ended |
|  | July 31, |  |  | July 31, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net Sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic operations |  | $ | 865,517 |  |  | $ | 764,846 |  |  | $ | 1,612,668 |  |  | $ | 1,442,799 |
Foreign operations |  |  | 126,937 |  |  |  | 108,085 |  |  |  | 235,474 |  |  |  | 191,322 |
Total net sales |  | $ | 992,454 |  |  | $ | 872,931 |  |  | $ | 1,848,142 |  |  | $ | 1,634,121 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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