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Segment Reporting
 9 Months Ended
Oct. 31, 2020
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 three reportable segments – “Retail,” “Wholesale” and “Subscription.”

The Company’s Retail segment consists of the Anthropologie, Bhldn, Free People, FP Movement, Terrain, Urban Outfitters and Menus & Venues brands. 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’s Retail segment omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available Company-owned Retail segment shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers.

The Company’s Wholesale segment consists of the Free People and Urban Outfitters brands. The Wholesale segment sells through department and specialty stores worldwide, digital businesses and the Retail segment. The Anthropologie brand exited the wholesale business in the third quarter of fiscal 2021.

The Subscription segment consists of the Nuuly brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019.

The Company evaluates the performance of each segment based on the net sales and pre-tax income from operations (excluding intercompany charges) of the segment. The Company accounts for intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases. Corporate expenses include expenses incurred and directed by the corporate office that are not allocated to segments. The principal identifiable assets for the Retail and Wholesale segments are inventory and property and equipment. The principal identifiable assets for the Subscription segment are rental product and property and equipment.

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, 2020. All of the Company’s 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

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

895,608

 

 

$

897,130

 

 

$

2,214,311

 

 

$

2,558,386

 

Wholesale operations

 

 

71,118

 

 

 

93,311

 

 

 

146,707

 

 

 

263,829

 

Subscription operations

 

 

6,742

 

 

 

2,032

 

 

 

17,684

 

 

 

2,032

 

Intersegment elimination

 

 

(3,861

)

 

 

(5,004

)

 

 

(17,346

)

 

 

(10,036

)

Total net sales

 

$

969,607

 

 

$

987,469

 

 

$

2,361,356

 

 

$

2,814,211

 

Income (loss) from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

101,969

 

 

$

83,687

 

 

$

24,873

 

 

$

197,378

 

Wholesale operations

 

 

14,947

 

 

 

10,204

 

 

 

(16,520

)

 

 

42,319

 

Subscription operations

 

 

(4,004

)

 

 

(6,320

)

 

 

(14,579

)

 

 

(11,957

)

Intersegment elimination

 

 

116

 

 

 

300

 

 

 

(378

)

 

 

549

 

Total segment operating income (loss)

 

 

113,028

 

 

 

87,871

 

 

 

(6,604

)

 

 

228,289

 

General corporate expenses (1)

 

 

(14,520

)

 

 

(12,602

)

 

 

(24,204

)

 

 

(34,939

)

Total income (loss) from operations

 

$

98,508

 

 

$

75,269

 

 

$

(30,808

)

 

$

193,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) General corporate expenses during the nine months ended October 31, 2020 benefitted from the recognition of coronavirus related government relief packages.

 

 

 

 

October 31,

 

 

January 31,

 

 

October 31,

 

 

 

2020

 

 

2020

 

 

2019

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

450,312

 

 

$

347,837

 

 

$

468,810

 

Wholesale operations

 

 

38,922

 

 

 

61,697

 

 

 

62,755

 

Total inventory

 

$

489,234

 

 

$

409,534

 

 

$

531,565

 

Rental product, net (1)

 

 

 

 

 

 

 

 

 

 

 

 

Subscription operations

 

$

14,053

 

 

$

16,447

 

 

$

10,865

 

Total rental product, net

 

$

14,053

 

 

$

16,447

 

 

$

10,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Rental product, net is included in "Deferred income taxes and other assets" in the Condensed Consolidated Balance Sheets.

 

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

901,817

 

 

$

859,918

 

 

$

863,234

 

Wholesale operations

 

 

2,212

 

 

 

2,577

 

 

 

2,496

 

Subscription operations

 

 

26,535

 

 

 

27,537

 

 

 

24,808

 

Total property and equipment, net

 

$

930,564

 

 

$

890,032

 

 

$

890,538

 

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel (1)

 

$

622,776

 

 

$

671,142

 

 

$

1,501,053

 

 

$

1,902,782

 

Home (2)

 

 

189,527

 

 

 

146,249

 

 

 

455,947

 

 

 

415,759

 

Accessories (3)

 

 

116,417

 

 

 

124,760

 

 

 

276,361

 

 

 

341,641

 

Other (4)

 

 

40,887

 

 

 

45,318

 

 

 

127,995

 

 

 

154,029

 

Total net sales

 

$

969,607

 

 

$

987,469

 

 

$

2,361,356

 

 

$

2,814,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel (1)

 

 

64

%

 

 

68

%

 

 

64

%

 

 

68

%

Home (2)

 

 

20

%

 

 

15

%

 

 

19

%

 

 

15

%

Accessories (3)

 

 

12

%

 

 

13

%

 

 

12

%

 

 

12

%

Other (4)

 

 

4

%

 

 

4

%

 

 

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, the Menus & Venues brand and the Subscription segment

 

 

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:

 

 

 

October 31,

 

 

January 31,

 

 

October 31,

 

 

 

2020

 

 

2020

 

 

2019

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

747,273

 

 

$

763,411

 

 

$

779,018

 

Foreign operations

 

 

183,291

 

 

 

126,621

 

 

 

111,520

 

Total property and equipment, net

 

$

930,564

 

 

$

890,032

 

 

$

890,538

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

847,898

 

 

$

865,586

 

 

$

2,081,151

 

 

$

2,468,991

 

Foreign operations

 

 

121,709

 

 

 

121,883

 

 

 

280,205

 

 

 

345,220

 

Total net sales

 

$

969,607

 

 

$

987,469

 

 

$

2,361,356

 

 

$

2,814,211