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Segment Reporting
 12 Months Ended
Jan. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting

17. 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 Anthropologie, Bhldn and Terrain brands make up the Anthropologie Group. The Free People and FP Movement brands make up the Free People Group. As of January 31, 2021, there were 247 Urban Outfitters stores, 237 Anthropologie Group stores, 149 Free People Group stores, 11 Menus & Venues restaurants and one Urban Outfitters franchisee-owned store. Each of, Urban Outfitters, the Anthropologie Group and the Free People Group, including their Company-owned and franchisee-owned store and

digital channels, and Menus & Venues restaurants, are considered an operating segment. Net sales from the Retail segment accounted for approximately 93.6%, 91.6% and 91.2% of total consolidated net sales for fiscal 2021, 2020 and 2019, respectively.

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 investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the Retail segment omni-channel and not the separate store or digital channels. The Company manages and analyzes its performance based on a single Retail segment omni-channel rather than separate channels and believes that the Retail segment omni-channel results present the most meaningful and appropriate measure of our performance.

The Company’s Wholesale segment consists of the Free People, FP Movement and Urban Outfitters brands. The Wholesale segment sells through department and specialty stores worldwide, digital businesses and the 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 Group and the BDG and other own brand apparel collections under the Urban Outfitters brand. The Urban Outfitters wholesale division was established in fiscal 2019. The Anthropologie brand exited the wholesale business in the third quarter of fiscal 2021. Our Wholesale segment net sales accounted for approximately 5.7%, 8.2% and 8.8% of total consolidated net sales for fiscal 2021, 2020 and 2019, respectively.

The Subscription segment consists of the “Nuuly” brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019. For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party labels and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase the rented product. Subscription segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2021 and 2020.

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. 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.

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 accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies.” 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:

 

 

 

Fiscal Year

 

 

 

2021

 

 

2020

 

 

2019

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

3,228,200

 

 

$

3,648,938

 

 

$

3,604,170

 

Wholesale operations

 

 

216,937

 

 

 

340,869

 

 

 

357,363

 

Subscription operations

 

 

24,336

 

 

 

8,001

 

 

 

—

 

Intersegment elimination

 

 

(19,724

)

 

 

(14,019

)

 

 

(10,910

)

Total net sales

 

$

3,449,749

 

 

$

3,983,789

 

 

$

3,950,623

 

Income (loss) from operations

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

68,384

 

 

$

256,540

 

 

$

353,851

 

Wholesale operations

 

 

(10,180

)

 

 

42,315

 

 

 

68,516

 

Subscription operations

 

 

(18,367

)

 

 

(19,639

)

 

 

(3,423

)

Intersegment elimination

 

 

(494

)

 

 

257

 

 

 

399

 

Total segment operating income

 

 

39,343

 

 

 

279,473

 

 

 

419,343

 

General corporate expenses (1)

 

 

(35,371

)

 

 

(47,548

)

 

 

(38,030

)

Total income from operations

 

$

3,972

 

 

$

231,925

 

 

$

381,313

 

 

 

(1)

General corporate expenses during fiscal 2021 benefitted from the recognition of COVID-19 related government relief packages.

 

 

 

Fiscal Year

 

 

 

2021

 

 

2020

 

 

2019

 

Depreciation expense for property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

97,911

 

 

$

109,622

 

 

$

115,646

 

Wholesale operations

 

 

545

 

 

 

578

 

 

 

645

 

Subscription operations

 

 

3,741

 

 

 

1,350

 

 

 

—

 

Total depreciation expense for property and equipment

 

$

102,197

 

 

$

111,550

 

 

$

116,291

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

348,797

 

 

$

347,837

 

 

 

 

 

Wholesale operations

 

 

40,821

 

 

 

61,697

 

 

 

 

 

Total inventory

 

$

389,618

 

 

$

409,534

 

 

 

 

 

Rental product, net (1)

 

 

 

 

 

 

 

 

 

 

 

 

Subscription operations

 

$

11,857

 

 

$

16,447

 

 

 

 

 

Total rental product, net

 

$

11,857

 

 

$

16,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

938,020

 

 

$

859,918

 

 

 

 

 

Wholesale operations

 

 

2,096

 

 

 

2,577

 

 

 

 

 

Subscription operations

 

 

27,306

 

 

 

27,537

 

 

 

 

 

Total property and equipment, net

 

$

967,422

 

 

$

890,032

 

 

 

 

 

Cash paid for property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

155,343

 

 

$

189,904

 

 

$

112,332

 

Wholesale operations

 

 

390

 

 

 

633

 

 

 

600

 

Subscription operations

 

 

3,509

 

 

 

26,896

 

 

 

1,992

 

Total cash paid for property and equipment

 

$

159,242

 

 

$

217,433

 

 

$

114,924

 

 

 

 

 

 

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

 

 

 

Fiscal Year

 

 

 

2021

 

 

2020

 

 

2019

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Apparel (1)

 

 

2,111,828

 

 

 

2,596,926

 

 

 

2,636,170

 

Home (2)

 

 

731,237

 

 

 

649,184

 

 

 

605,405

 

Accessories (3)

 

 

411,927

 

 

 

517,219

 

 

 

498,824

 

Other (4)

 

 

194,757

 

 

 

220,460

 

 

 

210,224

 

Total net sales

 

 

3,449,749

 

 

 

3,983,789

 

 

 

3,950,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales

 

 

 

 

 

 

 

 

 

 

 

 

Apparel (1)

 

 

61

%

 

 

65

%

 

 

67

%

Home (2)

 

 

21

%

 

 

16

%

 

 

15

%

Accessories (3)

 

 

12

%

 

 

13

%

 

 

13

%

Other (4)

 

 

6

%

 

 

6

%

 

 

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, 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:

 

 

 

Fiscal Year

 

 

 

2021

 

 

2020

 

 

2019

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

3,040,778

 

 

$

3,485,383

 

 

$

3,449,913

 

Foreign operations

 

 

408,971

 

 

 

498,406

 

 

 

500,710

 

Total net sales

 

$

3,449,749

 

 

$

3,983,789

 

 

$

3,950,623

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

768,440

 

 

$

763,411

 

 

 

 

 

Foreign operations

 

 

198,982

 

 

 

126,621

 

 

 

 

 

Total property and equipment, net

 

$

967,422

 

 

$

890,032