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Segment Reporting
 6 Months Ended
Jul. 31, 2022
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 “Nuuly.”

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 retail locations, websites, mobile applications, catalogs and customer contact centers.

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 Nuuly segment consists of the Nuuly brand, which offers customers a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service. Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell women’s, men’s and kids’ clothes, shoes and accessories.

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 Nuuly 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, 2022. 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

 

 

Six Months Ended

 

 

 

July 31,

 

 

July 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

1,095,191

 

 

$

1,089,022

 

 

$

2,058,626

 

 

$

1,946,508

 

Wholesale operations

 

 

61,900

 

 

 

61,985

 

 

 

130,971

 

 

 

128,563

 

Nuuly operations

 

 

28,776

 

 

 

9,939

 

 

 

51,625

 

 

 

17,759

 

Intersegment elimination

 

 

(2,479

)

 

 

(3,221

)

 

 

(5,900

)

 

 

(7,690

)

Total net sales

 

$

1,183,388

 

 

$

1,157,725

 

 

$

2,235,322

 

 

$

2,085,140

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

96,292

 

 

$

176,829

 

 

$

151,833

 

 

$

250,874

 

Wholesale operations

 

 

7,534

 

 

 

9,099

 

 

 

17,239

 

 

 

23,279

 

Nuuly operations

 

 

(2,379

)

 

 

(3,618

)

 

 

(6,130

)

 

 

(6,900

)

Intersegment elimination

 

 

177

 

 

 

264

 

 

 

590

 

 

 

345

 

Total segment operating income

 

 

101,624

 

 

 

182,574

 

 

 

163,532

 

 

 

267,598

 

General corporate expenses

 

 

(15,806

)

 

 

(16,721

)

 

 

(31,477

)

 

 

(28,242

)

Total income from operations

 

$

85,818

 

 

$

165,853

 

 

$

132,055

 

 

$

239,356

 

 

 

 

 

July 31,

 

 

January 31,

 

 

July 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

623,562

 

 

$

507,510

 

 

$

438,144

 

Wholesale operations

 

 

73,912

 

 

 

62,189

 

 

 

45,004

 

Total inventory

 

$

697,474

 

 

$

569,699

 

 

$

483,148

 

Rental product, net (1)

 

 

 

 

 

 

 

 

 

 

 

 

Nuuly operations

 

$

59,236

 

 

$

32,075

 

 

$

10,900

 

Total rental product, net

 

$

59,236

 

 

$

32,075

 

 

$

10,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

$

1,114,792

 

 

$

1,113,294

 

 

$

1,016,644

 

Wholesale operations

 

 

1,174

 

 

 

1,458

 

 

 

1,762

 

Nuuly operations

 

 

34,281

 

 

 

30,333

 

 

 

29,345

 

Total property and equipment, net

 

$

1,150,247

 

 

$

1,145,085

 

 

$

1,047,751

 

 


 

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

 

 

Three Months Ended

 

 

 

July 31,

 

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel

 

$

721,966

 

 

 

66

%

 

$

721,570

 

 

 

66

%

Home

 

 

193,098

 

 

 

18

%

 

 

188,298

 

 

 

18

%

Accessories

 

 

133,783

 

 

 

12

%

 

 

133,408

 

 

 

12

%

Other

 

 

46,344

 

 

 

4

%

 

 

45,746

 

 

 

4

%

Retail operations

 

 

1,095,191

 

 

 

100

%

 

 

1,089,022

 

 

 

100

%

Apparel

 

 

54,215

 

 

 

91

%

 

 

56,342

 

 

 

96

%

Accessories

 

 

5,011

 

 

 

9

%

 

 

2,212

 

 

 

4

%

Other

 

 

195

 

 

 

—

 

 

 

210

 

 

 

—

 

Wholesale operations

 

 

59,421

 

 

 

100

%

 

 

58,764

 

 

 

100

%

Nuuly operations

 

 

28,776

 

 

 

 

 

 

 

9,939

 

 

 

 

 

Total net sales

 

$

1,183,388

 

 

 

 

 

 

$

1,157,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

July 31,

 

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel

 

$

1,360,941

 

 

 

66

%

 

$

1,269,056

 

 

 

65

%

Home

 

 

355,908

 

 

 

17

%

 

 

361,684

 

 

 

19

%

Accessories

 

 

247,625

 

 

 

12

%

 

 

233,451

 

 

 

12

%

Other

 

 

94,152

 

 

 

5

%

 

 

82,317

 

 

 

4

%

Retail operations

 

 

2,058,626

 

 

 

100

%

 

 

1,946,508

 

 

 

100

%

Apparel

 

 

113,727

 

 

 

91

%

 

 

116,658

 

 

 

97

%

Accessories

 

 

10,974

 

 

 

9

%

 

 

3,823

 

 

 

3

%

Other

 

 

370

 

 

 

—

 

 

 

392

 

 

 

—

 

Wholesale operations

 

 

125,071

 

 

 

100

%

 

 

120,873

 

 

 

100

%

Nuuly operations

 

 

51,625

 

 

 

 

 

 

 

17,759

 

 

 

 

 

Total net sales

 

$

2,235,322

 

 

 

 

 

 

$

2,085,140

 

 

 

 

 

 

The Apparel category includes intimates and activewear. The Home category includes home furnishings, electronics, gifts and decorative items. The Accessories category includes footwear, jewelry and handbags. The Other category includes beauty and shipping and handling for the Retail and Wholesale segments, and additionally the Menus & Venues brand for the Retail segment.

The Company historically presented the merchandise categories on a company-wide basis. The Company has updated the presentation of the above tables to include a summary of net sales and percentage of net sales by both merchandise category and by segment. Prior year amounts have been reclassified to conform to the current year presentation.

 

 

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,

 

 

 

2022

 

 

2022

 

 

2021

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

990,457

 

 

$

965,777

 

 

$

844,912

 

Foreign operations

 

 

159,790

 

 

 

179,308

 

 

 

202,839

 

Total property and equipment, net

 

$

1,150,247

 

 

$

1,145,085

 

 

$

1,047,751

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 31,

 

 

July 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

1,022,318

 

 

$

998,580

 

 

$

1,935,882

 

 

$

1,825,375

 

Foreign operations

 

 

161,070

 

 

 

159,145

 

 

 

299,440

 

 

 

259,765

 

Total net sales

 

$

1,183,388

 

 

$

1,157,725

 

 

$

2,235,322

 

 

$

2,085,140