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 January 31, 2019, there were 245 Urban Outfitters stores, 227 Anthropologie Group stores, 135 Free People stores, 13 restaurants under the Food and Beverage division, four Urban Outfitters franchisee-owned stores and one Free People franchisee-owned store. Each of, Urban Outfitters, the Anthropologie Group and Free People, including their Company-owned and franchisee-owned 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 91.2%, 91.3% and 91.9% of total consolidated net sales for fiscal 2019, 2018 and 2017, respectively. The remaining net sales are derived from the Company’s Wholesale segment, which consists of the Free People, Anthropologie and Urban Outfitters brands that sell through approximately 2,200 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, home goods, including gifts, tabletop and textiles, under the Anthropologie brand and the BDG apparel collection under the Urban Outfitters brand. The Anthropologie wholesale division was established in fiscal 2018 and the Urban Outfitters wholesale division was established in fiscal 2019.

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, and 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 Company-owned 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. 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. The Company manages and analyzes its 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 its performance.

The accounting policies of the reportable 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 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:

	Fiscal Year
	2019			2018			2017
Net sales
Retail operations	$	3,604,170		$	3,299,714		$	3,256,890
Wholesale operations		357,363			327,539			298,566
Intersegment elimination		(10,910	)		(11,239	)		(9,662	)
Total net sales	$	3,950,623		$	3,616,014		$	3,545,794
Income from operations
Retail operations	$	353,600		$	233,844		$	325,666
Wholesale operations		68,516			71,877			58,169
Intersegment elimination		399			151			(614	)
Total segment operating income		422,515			305,872			383,221
General corporate expenses		(41,202	)		(45,980	)		(44,694	)
Total income from operations	$	381,313		$	259,892		$	338,527
Depreciation expense for property and equipment
Retail operations	$	115,646		$	124,935		$	132,150
Wholesale operations		645			885			980
Total depreciation expense for property and equipment	$	116,291		$	125,820		$	133,130
Inventory
Retail operations	$	328,783		$	300,493
Wholesale operations		41,724			50,902
Total inventory	$	370,507		$	351,395
Property and equipment, net
Retail operations	$	793,640		$	811,128
Wholesale operations		2,389			2,640
Total property and equipment, net	$	796,029		$	813,768
Cash paid for property and equipment
Retail operations	$	114,324		$	83,768		$	142,872
Wholesale operations		600			45			842
Total cash paid for property and equipment	$	114,924		$	83,813		$	143,714

The following tables summarize net sales and percentage of net sales from contracts with customers by merchandise category:

	Fiscal Year
	2019			2018			2017
Net sales
Apparel ⁽¹⁾		2,636,170			2,402,173			2,336,820
Home ⁽²⁾		605,405			581,874			578,369
Accessories ⁽³⁾		498,824			439,952			457,648
Other ⁽⁴⁾		210,224			192,015			172,957
Total net sales		3,950,623			3,616,014			3,545,794

As a percentage of net sales
Apparel ⁽¹⁾		67	%		67	%		66	%
Home ⁽²⁾		15	%		16	%		16	%
Accessories ⁽³⁾		13	%		12	%		13	%
Other ⁽⁴⁾		5	%		5	%		5	%
Total net sales		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:

	Fiscal Year
	2019		2018		2017
Net Sales
Domestic operations	$	3,449,913	$	3,163,074	$	3,114,014
Foreign operations		500,710		452,940		431,780
Total net sales	$	3,950,623	$	3,616,014	$	3,545,794
Property and equipment, net
Domestic operations	$	723,400	$	720,890
Foreign operations		72,629		92,878
Total property and equipment, net	$	796,029	$	813,768