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Segment Reporting
 12 Months Ended
Jan. 31, 2023
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 “Nuuly.”

The Company’s Retail segment consists of the Anthropologie, Free People, FP Movement, Terrain, Urban Outfitters and Menus & Venues brands. The Anthropologie 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, 2023, there were 263 Urban Outfitters stores, 238 Anthropologie Group stores, 188 Free People Group stores (including 31 FP Movement stores), 11 Menus & Venues locations, 6 Urban Outfitters franchisee-owned stores and 2 Anthropologie franchisee-owned stores. 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 locations, are considered an operating segment. Net sales from the Retail segment accounted for approximately 92.1%, 93.4% and 93.6% of total consolidated net sales for fiscal 2023, 2022 and 2021, 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 retail locations, 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 Anthropologie brand exited the wholesale business in the third quarter of fiscal 2021. Our Wholesale segment net sales accounted for approximately 5.2%, 5.5% and 5.7% of total consolidated net sales for fiscal 2023, 2022 and 2021, respectively.

The Nuuly segment consists of the Nuuly brand, which offers customers with a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service. For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party market brands 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. Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell any brand of women’s, men’s, and kids’ apparel, shoes, and accessories. Sellers on Nuuly Thrift can transfer their earnings to their bank account or convert them to “Nuuly Cash,” a gift card with a bonus, to be used at any of the Company’s brands. Nuuly Thrift earns a commission based on sales made in the marketplace. Nuuly segment net sales accounted for approximately 2.7%, 1.1%, and less than 1.0% of consolidated net sales for fiscal 2023, 2022 and 2021, respectively.

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 Nuuly 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

 

 

2023

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

Retail operations

 

$

4,415,358

 

 

$

4,248,681

 

 

$

3,228,200

 

Wholesale operations

 

 

268,552

 

 

 

267,576

 

 

 

216,937

 

Nuuly operations

 

 

129,637

 

 

 

47,724

 

 

 

24,336

 

Intersegment elimination

 

 

(18,303

)

 

 

(15,218

)

 

 

(19,724

)

Total net sales

 

$

4,795,244

 

 

$

4,548,763

 

 

$

3,449,749

 

Income from operations

 

 

 

 

 

 

 

 

 

Retail operations

 

$

275,369

 

 

$

449,453

 

 

$

68,384

 

Wholesale operations

 

 

25,793

 

 

 

32,937

 

 

 

(10,180

)

Nuuly operations

 

 

(13,931

)

 

 

(20,150

)

 

 

(18,367

)

Intersegment elimination

 

 

1,339

 

 

 

1,643

 

 

 

(494

)

Total segment operating income

 

 

288,570

 

 

 

463,883

 

 

 

39,343

 

General corporate expenses (1)

 

 

(61,947

)

 

 

(55,317

)

 

 

(35,371

)

Total income from operations

 

$

226,623

 

 

$

408,566

 

 

$

3,972

 

 

(1)
General corporate expenses during fiscal 2021 benefitted from the recognition of COVID-19 related government relief packages.

 

 

Fiscal Year

 

 

2023

 

 

2022

 

 

2021

 

Depreciation expense for property and equipment

 

 

 

 

 

 

 

 

 

Retail operations

 

$

91,879

 

 

$

94,099

 

 

$

97,911

 

Wholesale operations

 

 

546

 

 

 

547

 

 

 

545

 

Nuuly operations

 

 

5,402

 

 

 

4,412

 

 

 

3,741

 

Total depreciation expense for property and equipment

 

$

97,827

 

 

$

99,058

 

 

$

102,197

 

Inventory

 

 

 

 

 

 

 

 

 

Retail operations

 

$

529,853

 

 

$

507,510

 

 

 

 

Wholesale operations

 

 

57,657

 

 

 

62,189

 

 

 

 

Total inventory

 

$

587,510

 

 

$

569,699

 

 

 

 

Rental product, net (1)

 

 

 

 

 

 

 

 

 

Nuuly operations

 

$

90,934

 

 

$

32,075

 

 

 

 

Total rental product, net

 

$

90,934

 

 

$

32,075

 

 

 

 

 

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

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

Retail operations

 

$

1,138,487

 

 

$

1,113,294

 

 

 

 

Wholesale operations

 

 

990

 

 

 

1,458

 

 

 

 

Nuuly operations

 

 

48,258

 

 

 

30,333

 

 

 

 

Total property and equipment, net

 

$

1,187,735

 

 

$

1,145,085

 

 

 

 

Cash paid for property and equipment

 

 

 

 

 

 

 

 

 

Retail operations

 

$

176,110

 

 

$

254,921

 

 

$

155,343

 

Wholesale operations

 

 

76

 

 

 

69

 

 

 

390

 

Nuuly operations

 

 

23,327

 

 

 

7,439

 

 

 

3,509

 

Total cash paid for property and equipment

 

$

199,513

 

 

$

262,429

 

 

$

159,242

 

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

 

 

 

Fiscal Year

 

 

 

2023

 

 

2022

 

 

2021

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel

 

$

2,808,638

 

 

 

63

%

 

$

2,671,841

 

 

 

63

%

 

$

1,920,256

 

 

 

59

%

Home

 

 

830,199

 

 

 

19

%

 

 

852,379

 

 

 

20

%

 

 

730,703

 

 

 

23

%

Accessories

 

 

559,524

 

 

 

13

%

 

 

532,877

 

 

 

12

%

 

 

407,402

 

 

 

13

%

Other

 

 

216,997

 

 

 

5

%

 

 

191,584

 

 

 

5

%

 

 

169,839

 

 

 

5

%

Retail operations

 

 

4,415,358

 

 

 

100

%

 

 

4,248,681

 

 

 

100

%

 

 

3,228,200

 

 

 

100

%

Apparel

 

 

229,282

 

 

 

92

%

 

 

241,060

 

 

 

96

%

 

 

191,572

 

 

 

98

%

Home

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

534

 

 

 

0

%

Accessories

 

 

20,238

 

 

 

8

%

 

 

10,460

 

 

 

4

%

 

 

4,525

 

 

 

2

%

Other

 

 

729

 

 

 

0

%

 

 

838

 

 

 

0

%

 

 

582

 

 

 

0

%

Wholesale operations

 

 

250,249

 

 

 

100

%

 

 

252,358

 

 

 

100

%

 

 

197,213

 

 

 

100

%

Nuuly operations

 

 

129,637

 

 

 

 

 

 

47,724

 

 

 

 

 

 

24,336

 

 

 

 

Total net sales

 

 

4,795,244

 

 

 

 

 

$

4,548,763

 

 

 

 

 

$

3,449,749

 

 

 

 

 

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:

 

 

Fiscal Year

 

 

2023

 

 

2022

 

 

2021

 

Net Sales

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

4,158,753

 

 

$

3,950,381

 

 

$

3,040,778

 

Foreign operations

 

 

636,491

 

 

 

598,382

 

 

 

408,971

 

Total net sales

 

$

4,795,244

 

 

$

4,548,763

 

 

$

3,449,749

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

1,033,926

 

 

$

965,777

 

 

 

 

Foreign operations

 

 

153,809

 

 

 

179,308

 

 

 

 

Total property and equipment, net

 

$

1,187,735

 

 

$

1,145,085