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Segment Reporting
 9 Months Ended
Oct. 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

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

1,067,531

 

 

$

1,043,905

 

 

$

3,126,157

 

 

$

2,990,413

 

Wholesale operations

 

 

80,223

 

 

 

79,549

 

 

 

211,194

 

 

 

208,112

 

Nuuly operations

 

 

35,279

 

 

 

12,688

 

 

 

86,904

 

 

 

30,447

 

Intersegment elimination

 

 

(7,684

)

 

 

(4,718

)

 

 

(13,584

)

 

 

(12,408

)

Total net sales

 

$

1,175,349

 

 

$

1,131,424

 

 

$

3,410,671

 

 

$

3,216,564

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations

 

$

64,427

 

 

$

126,615

 

 

$

216,260

 

 

$

377,489

 

Wholesale operations

 

 

12,782

 

 

 

10,098

 

 

 

30,021

 

 

 

33,377

 

Nuuly operations

 

 

(3,228

)

 

 

(4,900

)

 

 

(9,358

)

 

 

(11,800

)

Intersegment elimination

 

 

547

 

 

 

850

 

 

 

1,137

 

 

 

1,195

 

Total segment operating income

 

 

74,528

 

 

 

132,663

 

 

 

238,060

 

 

 

400,261

 

General corporate expenses

 

 

(17,210

)

 

 

(16,761

)

 

 

(48,687

)

 

 

(45,003

)

Total income from operations

 

$

57,318

 

 

$

115,902

 

 

$

189,373

 

 

$

355,258

 

 

 

 

 

October 31,

 

 

January 31,

 

 

October 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Inventory

 

 

 

 

 

 

 

 

 

Retail operations

 

$

682,005

 

 

$

507,510

 

 

$

582,711

 

Wholesale operations

 

 

61,574

 

 

 

62,189

 

 

 

44,392

 

Total inventory

 

$

743,579

 

 

$

569,699

 

 

$

627,103

 

Rental product, net (1)

 

 

 

 

 

 

 

 

 

Nuuly operations

 

$

76,449

 

 

$

32,075

 

 

$

22,203

 

Total rental product, net

 

$

76,449

 

 

$

32,075

 

 

$

22,203

 

 

(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

 

$

1,133,561

 

 

$

1,113,294

 

 

$

1,056,282

 

Wholesale operations

 

 

1,073

 

 

 

1,458

 

 

 

1,593

 

Nuuly operations

 

 

40,446

 

 

 

30,333

 

 

 

30,412

 

Total property and equipment, net

 

$

1,175,080

 

 

$

1,145,085

 

 

$

1,088,287

 

 

 

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

 

 

Three Months Ended

 

 

 

October 31,

 

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Apparel

 

$

688,630

 

 

 

64

%

 

$

679,692

 

 

 

65

%

Home

 

 

192,384

 

 

 

18

%

 

 

192,312

 

 

 

18

%

Accessories

 

 

135,784

 

 

 

13

%

 

 

128,065

 

 

 

13

%

Other

 

 

50,733

 

 

 

5

%

 

 

43,836

 

 

 

4

%

Retail operations

 

 

1,067,531

 

 

 

100

%

 

 

1,043,905

 

 

 

100

%

Apparel

 

 

65,713

 

 

 

91

%

 

 

70,097

 

 

 

94

%

Accessories

 

 

6,603

 

 

 

9

%

 

 

4,476

 

 

 

6

%

Other

 

 

223

 

 

 

0

%

 

 

258

 

 

 

0

%

Wholesale operations

 

 

72,539

 

 

 

100

%

 

 

74,831

 

 

 

100

%

Nuuly operations

 

 

35,279

 

 

 

 

 

 

12,688

 

 

 

 

Total net sales

 

$

1,175,349

 

 

 

 

 

$

1,131,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

October 31,

 

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Apparel

 

$

2,049,571

 

 

 

66

%

 

$

1,948,748

 

 

 

65

%

Home

 

 

548,292

 

 

 

17

%

 

 

553,996

 

 

 

19

%

Accessories

 

 

383,409

 

 

 

12

%

 

 

361,516

 

 

 

12

%

Other

 

 

144,885

 

 

 

5

%

 

 

126,153

 

 

 

4

%

Retail operations

 

 

3,126,157

 

 

 

100

%

 

 

2,990,413

 

 

 

100

%

Apparel

 

 

179,440

 

 

 

91

%

 

 

186,755

 

 

 

96

%

Accessories

 

 

17,577

 

 

 

9

%

 

 

8,299

 

 

 

4

%

Other

 

 

593

 

 

 

0

%

 

 

650

 

 

 

0

%

Wholesale operations

 

 

197,610

 

 

 

100

%

 

 

195,704

 

 

 

100

%

Nuuly operations

 

 

86,904

 

 

 

 

 

 

30,447

 

 

 

 

Total net sales

 

$

3,410,671

 

 

 

 

 

$

3,216,564

 

 

 

 

 

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:

 

 

 

October 31,

 

 

January 31,

 

 

October 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

1,024,693

 

 

$

965,777

 

 

$

894,106

 

Foreign operations

 

 

150,387

 

 

 

179,308

 

 

 

194,181

 

Total property and equipment, net

 

$

1,175,080

 

 

$

1,145,085

 

 

$

1,088,287

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

1,023,420

 

 

$

974,511

 

 

$

2,959,302

 

 

$

2,799,886

 

Foreign operations

 

 

151,929

 

 

 

156,913

 

 

 

451,369

 

 

 

416,678

 

Total net sales

 

$

1,175,349

 

 

$

1,131,424

 

 

$

3,410,671

 

 

$

3,216,564