UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 31, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 000-22754

Urban Outfitters, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Pennsylvania	23-2003332
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

5000 South Broad Street, Philadelphia, PA	19112-1495
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (215) 454-5500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $.0001 per share	URBN	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common shares, $0.0001 par value—~~92,175,750~~92,784,344 shares outstanding on December ~~6, 2022.~~5, 2023.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION


Item 1.	Financial Statements (unaudited)


	Condensed Consolidated Balance Sheets as of October 31, ~~2022,~~2023, January 31, ~~2022~~2023 and October 31, ~~2021~~2022	1

	Condensed Consolidated Statements of Income for the three and nine months ended October 31, ~~2022~~2023 and ~~2021~~2022	2

	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 31, ~~2022~~2023 and ~~2021~~2022	3

	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended October 31, ~~2022~~2023 and ~~2021~~2022	4

	Condensed Consolidated Statements of Cash Flows for the nine months ended October 31, ~~2022~~2023 and ~~2021~~2022	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2120

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3028

Item 4.	Controls and Procedures	3129

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	3230

Item 1A.	Risk Factors	3230

Item 5.	Other Information	30

Item 6.	Exhibits	3331


	Signatures	3432

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(unaudited)


	October 31,			January 31,			October 31,			October 31,			January 31,			October 31,
	2022			2022			2021			2023			2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	147,431		$	206,575		$	236,354		$	206,237		$	201,260		$	147,431
Marketable securities		146,364			239,420			188,375			249,176			181,378			146,364
Accounts receivable, net of allowance for doubtful accounts of $1,265, $1,348 and $1,313, respectively		81,422			63,760			114,208
Accounts receivable, net of allowance for doubtful accounts of $1,271, $1,496 and $1,265, respectively											77,399			70,339			81,422
Inventory		743,579			569,699			627,103			721,011			587,510			743,579
Prepaid expenses and other current assets		226,280			206,293			203,213			235,227			197,232			226,280
Total current assets		1,345,076			1,285,747			1,369,253			1,489,050			1,237,719			1,345,076
Property and equipment, net		1,175,080			1,145,085			1,088,287			1,272,652			1,187,735			1,175,080
Operating lease right-of-use assets		927,092			1,000,255			1,030,776			933,864			959,436			927,092
Marketable securities		95,246			223,557			269,780			132,939			102,844			95,246
Deferred income taxes and other assets		177,622			136,703			132,510			281,151			195,178			177,622
Total Assets	$	3,720,116		$	3,791,347		$	3,890,606		$	4,109,656		$	3,682,912		$	3,720,116
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	326,529		$	304,246		$	315,481		$	319,115		$	257,620		$	326,529
Current portion of operating lease liabilities		224,378			236,315			240,074			223,781			232,672			224,378
Accrued expenses, accrued compensation and other current liabilities		457,537			440,912			493,446			506,028			400,082			457,537
Total current liabilities		1,008,444			981,473			1,049,001			1,048,924			890,374			1,008,444
Non-current portion of operating lease liabilities		861,033			951,080			986,026			857,791			884,696			861,033
Deferred rent and other liabilities		112,248			113,054			108,848			156,383			115,159			112,248
Total Liabilities		1,981,725			2,045,607			2,143,875			2,063,098			1,890,229			1,981,725
Commitments and contingencies (see Note 12)
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 92,174,487, 96,431,044 and 97,863,862 shares issued and outstanding, respectively		9			10			10
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued											—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 92,784,344, 92,180,709 and 92,174,487 shares issued and outstanding, respectively											9			9			9
Additional paid-in-capital		7,850			—			18,671			30,734			15,248			7,850
Retained earnings		1,794,599			1,770,560			1,744,772			2,065,984			1,826,061			1,794,599
Accumulated other comprehensive loss		(64,067	)		(24,830	)		(16,722	)		(50,169	)		(48,635	)		(64,067	)
Total Shareholders’ Equity		1,738,391			1,745,740			1,746,731			2,046,558			1,792,683			1,738,391
Total Liabilities and Shareholders’ Equity	$	3,720,116		$	3,791,347		$	3,890,606		$	4,109,656		$	3,682,912		$	3,720,116

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except share and per share data)

(unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended					Nine Months Ended
	October 31,						October 31,						October 31,					October 31,
	2022			2021			2022			2021			2023		2022			2023		2022
Net sales	$	1,175,349		$	1,131,424		$	3,410,671		$	3,216,564		$	1,281,174	$	1,175,349		$	3,667,043	$	3,410,671
Cost of sales (excluding store impairment)		817,348			740,686			2,354,817			2,089,910			825,375		817,348			2,384,432		2,354,817
Store impairment		958			—			958			—			1,392		958			1,392		958
Gross profit		357,043			390,738			1,054,896			1,126,654			454,407		357,043			1,281,219		1,054,896
Selling, general and administrative expenses		299,725			274,836			865,523			771,396			345,429		299,725			968,760		865,523
Income from operations		57,318			115,902			189,373			355,258			108,978		57,318			312,459		189,373
Other loss, net		(5,019	)		(551	)		(9,270	)		(2,503	)
Other income (loss), net														705		(5,019	)		5,123		(9,270	)
Income before income taxes		52,299			115,351			180,103			352,755			109,683		52,299			317,582		180,103
Income tax expense		15,068			26,496			51,866			83,091			26,669		15,068			77,659		51,866
Net income	$	37,231		$	88,855		$	128,237		$	269,664		$	83,014	$	37,231		$	239,923	$	128,237
Net income per common share:
Basic	$	0.40		$	0.90		$	1.37		$	2.75		$	0.89	$	0.40		$	2.59	$	1.37
Diluted	$	0.40		$	0.89		$	1.36		$	2.71		$	0.88	$	0.40		$	2.55	$	1.36
Weighted-average common shares outstanding:
Basic		92,174,160			98,202,399			93,544,085			98,209,796			92,780,736		92,174,160			92,667,878		93,544,085
Diluted		93,036,066			99,415,838			94,322,783			99,447,551			94,448,376		93,036,066			94,168,058		94,322,783

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands)

(unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	October 31,						October 31,						October 31,						October 31,
	2022			2021			2022			2021			2023			2022			2023			2022
Net income	$	37,231		$	88,855		$	128,237		$	269,664		$	83,014		$	37,231		$	239,923		$	128,237
Other comprehensive (loss) income:
Other comprehensive loss:
Foreign currency translation		(13,451	)		(2,605	)		(34,083	)		1,423			(11,961	)		(13,451	)		(4,269	)		(34,083	)
Change in unrealized gains (losses) on marketable securities, net of tax		(431	)		(1,029	)		(5,154	)		(1,025	)		594			(431	)		2,735			(5,154	)
Total other comprehensive (loss) income		(13,882	)		(3,634	)		(39,237	)		398
Total other comprehensive loss														(11,367	)		(13,882	)		(1,534	)		(39,237	)
Comprehensive income	$	23,349		$	85,221		$	89,000		$	270,062		$	71,647		$	23,349		$	238,389		$	89,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(amounts in thousands, except share data)

(unaudited)


											Accumulated
	Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total
Balances as of July 31, 2023		92,773,249		$	9	$	23,214		$	1,982,970	$	(38,802	)	$	1,967,391
Comprehensive income		—			—		—			83,014		(11,367	)		71,647
Share-based compensation		—			—		7,689			—		—			7,689
Share-based awards		16,165			—		—			—		—			—
Share repurchases		(5,070	)		—		(169	)		—		—			(169	)
Balances as of October 31, 2023		92,784,344		$	9	$	30,734		$	2,065,984	$	(50,169	)	$	2,046,558


											Accumulated
	Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total
Balances as of July 31, 2022		92,173,342		$	9	$	—		$	1,757,368	$	(50,185	)	$	1,707,192
Comprehensive income		—			—		—			37,231		(13,882	)		23,349
Share-based compensation		—			—		7,862			—		—			7,862
Share-based awards		1,667			—		—			—		—			—
Share repurchases		(522	)		—		(12	)		—		—			(12	)
Balances as of October 31, 2022		92,174,487		$	9	$	7,850		$	1,794,599	$	(64,067	)	$	1,738,391

Accumulated

Common Shares

Additional

Other

Number of

Par

Paid-in

Retained

Comprehensive

Shares

Value

Capital

Earnings

Loss

Total

Balances as of July 31, 2021

98,357,090

$
10

$
26,581

$
1,655,917

$
(13,088
)

$
1,669,420

Comprehensive income

—

—

—

88,855

(3,634
)

85,221

Share-based compensation

—

—

7,100

—

—

7,100

Share-based awards

9,998

—

—

—

—

—

Share repurchases

(503,226
)

—

(15,010
)

—

—

(15,010
)
Balances as of October 31, 2021

97,863,862

$
10

$
18,671

$
1,744,772

$
(16,722
)

$
1,746,731

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(amounts in thousands, except share data)

(unaudited)


											Accumulated
	Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total
Balances as of January 31, 2023		92,180,709		$	9	$	15,248		$	1,826,061	$	(48,635	)	$	1,792,683
Comprehensive income		—			—		—			239,923		(1,534	)		238,389
Share-based compensation		—			—		23,245			—		—			23,245
Share-based awards		912,284			—		594			—		—			594
Share repurchases		(308,649	)		—		(8,353	)		—		—			(8,353	)
Balances as of October 31, 2023		92,784,344		$	9	$	30,734		$	2,065,984	$	(50,169	)	$	2,046,558


													Accumulated
	Common Shares						Additional						Other
	Number of			Par			Paid-in			Retained			Comprehensive
	Shares			Value			Capital			Earnings			Loss			Total
Balances as of January 31, 2022		96,431,044		$	10		$	—		$	1,770,560		$	(24,830	)	$	1,745,740
Comprehensive income		—			—			—			128,237			(39,237	)		89,000
Share-based compensation		—			—			21,971			—			—			21,971
Share-based awards		725,882			—			376			—			—			376
Share repurchases		(4,982,439	)		(1	)		(14,497	)		(104,198	)		—			(118,696	)
Balances as of October 31, 2022		92,174,487		$	9		$	7,850		$	1,794,599		$	(64,067	)	$	1,738,391

Accumulated

Common Shares

Additional

Other

Number of

Par

Paid-in

Retained

Comprehensive

Shares

Value

Capital

Earnings

Loss

Total

Balances as of January 31, 2021

97,815,985

$
10

$
19,360

$
1,475,108

$
(17,120
)

$
1,477,358

Comprehensive income

—

—

—

269,664

398

270,062

Share-based compensation

—

—

19,068

—

—

19,068

Share-based awards

773,634

—

2,815

—

—

2,815

Share repurchases

(725,757
)

—

(22,572
)

—

—

(22,572
)
Balances as of October 31, 2021

97,863,862

$
10

$
18,671

$
1,744,772

$
(16,722
)

$
1,746,731

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

Nine Months Ended

October 31,

2022

2021

Cash flows from operating activities:

Net income

$
128,237

$
269,664

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization

77,529

77,985

Non-cash lease expense

143,036

144,347

Provision (benefit) for deferred income taxes

366

(5,086
)
Share-based compensation expense

21,971

19,068

Store impairment

958

—

Loss on disposition of property and equipment, net

345

193

Changes in assets and liabilities:

Receivables

(19,235
)

(24,387
)
Inventory

(184,800
)

(238,094
)
Prepaid expenses and other assets

(56,699
)

(10,087
)
Payables, accrued expenses and other liabilities

59,305

161,251

Operating lease liabilities

(177,183
)

(172,575
)
Net cash (used in) provided by operating activities

(6,170
)

222,279

Cash flows from investing activities:

Cash paid for property and equipment

(143,445
)

(159,008
)
Cash paid for marketable securities

(22,000
)

(442,249
)
Sales and maturities of marketable securities

230,745

237,879

Net cash provided by (used in) investing activities

65,300

(363,378
)
Cash flows from financing activities:

Proceeds from the exercise of stock options

376

2,815

Share repurchases related to share repurchase program

(112,016
)

(14,888
)
Share repurchases related to taxes for share-based awards

(6,680
)

(7,684
)
Net cash used in financing activities

(118,320
)

(19,757
)
Effect of exchange rate changes on cash and cash equivalents

46

1,575

Decrease in cash and cash equivalents

(59,144
)

(159,281
)
Cash and cash equivalents at beginning of period

206,575

395,635

Cash and cash equivalents at end of period

$
147,431

$
236,354

Supplemental cash flow information:

Cash paid during the year for:

Income taxes

$
33,516

$
81,747

Non-cash investing activities—Accrued capital expenditures

$
41,431

$
75,206


	Nine Months Ended
	October 31,
	2023			2022
Cash flows from operating activities:
Net income	$	239,923		$	128,237
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		75,286			77,529
Non-cash lease expense		151,413			143,036
Provision for deferred income taxes		33,660			366
Share-based compensation expense		23,245			21,971
Amortization of tax credit investment		11,929			—
Store impairment		1,392			958
Loss on disposition of property and equipment, net		146			345
Changes in assets and liabilities:
Receivables		(7,233	)		(19,235	)
Inventory		(135,216	)		(184,800	)
Prepaid expenses and other assets		(74,957	)		(56,699	)
Payables, accrued expenses and other liabilities		138,735			59,305
Operating lease liabilities		(178,084	)		(177,183	)
Net cash provided by (used in) operating activities		280,239			(6,170	)
Cash flows from investing activities:
Cash paid for property and equipment		(151,037	)		(143,445	)
Cash paid for marketable securities		(335,508	)		(22,000	)
Sales and maturities of marketable securities		242,847			230,745
Initial cash payment for tax credit investment		(20,000	)		—
Net cash (used in) provided by investing activities		(263,698	)		65,300
Cash flows from financing activities:
Proceeds from the exercise of stock options		594			376
Share repurchases related to share repurchase program		—			(112,016	)
Share repurchases related to taxes for share-based awards		(8,353	)		(6,680	)
Tax credit investment liability payments		(3,007	)		—
Net cash used in financing activities		(10,766	)		(118,320	)
Effect of exchange rate changes on cash and cash equivalents		(798	)		46
Increase (decrease) in cash and cash equivalents		4,977			(59,144	)
Cash and cash equivalents at beginning of period		201,260			206,575
Cash and cash equivalents at end of period	$	206,237		$	147,431
Supplemental cash flow information:
Cash paid during the year for income taxes	$	35,576		$	33,516
Non-cash investing activities—Accrued capital expenditures	$	31,791		$	41,431
Right-of-use assets obtained in exchange for operating lease liabilities	$	154,426		$	105,365
Non-cash investing activities—Accrued tax credit investment installments	$	62,120		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

URBAN OUTFITTERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and per share data)

(unaudited)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed financial statements should be read in conjunction with Urban Outfitters, Inc.’s (the “Company’s”) Annual Report on Form 10-K for the fiscal year ended January 31, ~~2022,~~2023, filed with the United States Securities and Exchange Commission on April ~~1, 2022.~~3, 2023.

The Company’s business experiences seasonal fluctuations in net sales and net income, with a more significant portion typically realized in the second half of each year predominantly due to the year-end holiday period. Historically, and consistent with the retail industry, this seasonality also impacts our working capital requirements, particularly with regard to inventory. Accordingly, the results of operations for the three and nine months ended October 31, ~~2022~~2023 are not necessarily indicative of the results to be expected for the full year.

The Company’s fiscal year ends on January 31. All references in these notes to the Company’s fiscal years refer to the fiscal years ended on January 31 in those years. For example, the Company’s fiscal year ~~2023~~2024 will end on January 31, ~~2023.~~2024.

Recent Accounting Pronouncements

~~The Company has considered all new accounting standards updates issued by~~In November 2023, the Financial Accounting Standards Board ~~(“FASB”)~~issued an accounting standards update that introduces additional segment disclosure requirements. The update requires entities to quantitatively disclose significant segment expenses that are regularly provided to the chief operating decision maker for each reportable segment as well as an amount for other segment items for each reportable segment and ~~has concluded that there~~a description of their composition. Entities are ~~no recent accounting standard updates that~~also required to disclose how reported measures of segment profit or loss are used in assessing segment performance and deciding how to allocate resources. The update will ~~have a material impact on~~be effective for the Company in its annual consolidated financial statements for the fiscal year ending January 31, 2025, and interim periods thereafter. The Company expects adoption of this update to result in additional disclosures in the notes to its consolidated financial statements and ~~related disclosures.~~will be applied retrospectively to all prior periods presented.

2. ~~Impact of the Coronavirus Pandemic~~

~~Impact of the Coronavirus Pandemic on Fiscal 2022~~

The COVID-19 pandemic continued to negatively impact the Company’s store operations during the first nine months of fiscal 2022 with residual impacts on store traffic and store sales resulting from store closures, primarily in Europe and Canada, occupancy restrictions and reduced store hours globally. During the second quarter of fiscal 2022, all remaining COVID-19 government mandated store closures in Europe and Canada expired, although some capacity restrictions continued in certain European and Canadian stores. The COVID-19 pandemic and general unfavorable macroeconomic conditions also disrupted the Company’s global supply chain in fiscal 2022, leading to COVID-19 related factory and port closures, continued port congestion and shipping delays, which resulted in inventory receipt delays and an increase in inbound transportation costs. The Company made a strategic decision to accelerate receipt of certain product categories earlier in the third and fourth quarters of fiscal 2022 in an attempt to minimize the impact of such disruptions on the ability to fulfill customer demand.

~~Impact of the Coronavirus Pandemic and Macroeconomic Uncertainties on Fiscal 2023 and Future Operations~~

The COVID-19 pandemic and its effects on the global economy continued to impact the Company’s operations through the third quarter of fiscal 2023 and related government and private sector responsive actions could continue to affect its business operations. In the first half of fiscal 2023, the Company continued to experience global supply chain disruptions resulting in inventory receipt delays and in response, the Company continued to further diversify its supply chain. In the third quarter of fiscal 2023, timing of supply chain deliveries started to improve, resulting in earlier than planned receipts of inventory. The Company expects that its operations will continue to be influenced by economic pressures such as inflation and labor shortages, resulting in higher wage expense and lower levels of discretionary spending by its customers, particularly customers of the Urban Outfitters brand. Additionally, fluctuations in foreign currency rates may impact the Company's operating results. The Company cannot reasonably

estimate the duration and severity of existing and future macroeconomic conditions or current global issues that may have a material effect on the Company's business and the global economy. As a result, current financial information may not be necessarily indicative of future operating results.

3. Revenue from Contracts with Customers

Contract receivables occur when the Company satisfies all of its performance obligations under a contract and recognizes revenue prior to billing or receiving consideration from a customer for which it has an unconditional right to payment. Contract receivables arise from credit card, debit card and alternative payment method transactions throughout all segments and sales to the Company’s Wholesale segment customers and franchisees. For the nine month period ended October 31, 2023, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $70,339 and $77,399, respectively. For the nine month period ended October 31, 2022, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $63,760 and $81,422~~, respectively. For the nine month period ended October 31, 2021, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $89,952~~ ~~and $114,208~~, respectively. Contract receivables are included in “Accounts receivable, net of allowance for doubtful accounts” in the Condensed Consolidated Balance Sheets.

Contract liabilities represent unearned revenue and result from the Company receiving consideration in a contract with a customer for which it has not satisfied all of its performance obligations. The Company’s contract liabilities result from customer deposits, customer loyalty programs and the issuance of gift cards. Gift cards are expected to be redeemed within two years of issuance, with the majority of redemptions occurring in the first year. For the nine month period ended October 31, 2023, the opening and closing balances of contract liabilities were $82,867 and $70,763, respectively. For the nine month period ended October 31, 2022, the opening and closing balances of contract liabilities were $78,717 and $68,536, respectively. ~~For the nine month period ended October 31, 2021, the opening and closing balances of contract liabilities were $61,986~~ ~~and $62,476, respectively.~~ Contract liabilities are included in “Accrued

expenses, accrued compensation and other current liabilities” in the Condensed Consolidated Balance Sheets. During the nine month period ended October 31, 2023, the Company recognized $32,828 of revenue that was included in the contract liability balance at the beginning of the period. During the nine month period ended October 31, 2022, the Company recognized $32,299 of revenue that was included in the contract liability balance at the beginning of the period. ~~During the nine month period ended October 31, 2021, the Company recognized $25,734~~ ~~of revenue that was included in the contract liability balance at the beginning of the period.~~

4.3. Marketable Securities

During all periods shown, marketable securities are classified as available-for-sale. The amortized cost, gross unrealized gains (losses) and fair value of available-for-sale securities by major security type and class of security as of October 31, ~~2022,~~2023, January 31, ~~2022~~2023 and October 31, ~~2021~~2022 were as follows:


	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
As of October 31, 2022
As of October 31, 2023
Short-term Investments:
Corporate bonds	$	85,788	$	—	$	(1,626	)	$	84,162	$	102,766	$	—	$	(1,336	)	$	101,430
Federal government agencies											66,216		—		(233	)		65,983
Municipal and pre-refunded municipal bonds		58,417		—		(910	)		57,507		48,115		—		(727	)		47,388
Commercial paper											20,976		—		—			20,976
US Treasury securities											13,157		—		(7	)		13,150
Certificates of deposit											249		—		—			249
											251,479		—		(2,303	)		249,176
Long-term Investments:
Corporate bonds											53,555		4		(1,155	)		52,404
Federal government agencies											49,203		—		(388	)		48,815
Municipal and pre-refunded municipal bonds											10,224		3		(136	)		10,091
US Treasury securities											7,398		1		(71	)		7,328
Mutual funds, held in rabbi trust											13,252		147		(348	)		13,051
Certificates of deposit											1,250		—		—			1,250
											134,882		155		(2,098	)		132,939
										$	386,361	$	155	$	(4,401	)	$	382,115
As of January 31, 2023
Short-term Investments:
Corporate bonds										$	83,184	$	—	$	(947	)	$	82,237
Federal government agencies											6,501		—		(1	)		6,500
Municipal and pre-refunded municipal bonds											48,141		—		(688	)		47,453
Commercial paper											21,636		—		—			21,636
US Treasury securities		4,750		—		(55	)		4,695		23,561		1		(10	)		23,552
		148,955		—		(2,591	)		146,364		183,023		1		(1,646	)		181,378
Long-term Investments:
Corporate bonds		61,707		—		(4,472	)		57,235		62,594		22		(3,319	)		59,297
Federal government agencies											9,021		13		(2	)		9,032
Municipal and pre-refunded municipal bonds		28,803		—		(1,801	)		27,002		23,437		5		(1,154	)		22,288
Mutual funds, held in rabbi trust		12,546		—		(1,786	)		10,760		13,402		—		(1,424	)		11,978
Certificates of deposit		249		—		—			249		249		—		—			249
		103,305		—		(8,059	)		95,246		108,703		40		(5,899	)		102,844
	$	252,260	$	—	$	(10,650	)	$	241,610	$	291,726	$	41	$	(7,545	)	$	284,222
As of January 31, 2022
Short-term Investments:
Corporate bonds	$	85,062	$	1	$	(200	)	$	84,863
Municipal and pre-refunded municipal bonds		128,984		1		(273	)		128,712
US Treasury securities		14,999		—		(38	)		14,961
Commercial paper		10,884		—		—			10,884
		239,929		2		(511	)		239,420
Long-term Investments:
Corporate bonds		148,830		—		(2,478	)		146,352
Municipal and pre-refunded municipal bonds		60,533		1		(912	)		59,622
Mutual funds, held in rabbi trust		12,419		—		(606	)		11,813
US Treasury securities		5,222		—		(46	)		5,176
Federal government agencies		350		—		(5	)		345
Certificates of deposit		249		—		—			249
		227,603		1		(4,047	)		223,557
	$	467,532	$	3	$	(4,558	)	$	462,977

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

(Losses)

Value

As of October 31, 2021

Short-term Investments:

Corporate bonds

$
53,744

$
3

$
(71
)

$
53,676

Municipal and pre-refunded municipal bonds

114,818

9

(73
)

114,754

US Treasury securities

16,849

—

(3
)

16,846

Commercial paper

3,099

—

—

3,099

188,510

12

(147
)

188,375

Long-term Investments:

Corporate bonds

174,884

1

(1,125
)

173,760

Municipal and pre-refunded municipal bonds

78,955

8

(362
)

78,601

Mutual funds, held in rabbi trust

11,540

542

(1
)

12,081

US Treasury securities

4,748

—

(7
)

4,741

Federal government agencies

350

—

(2
)

348

Certificates of deposit

249

—

—

249

270,726

551

(1,497
)

269,780

$
459,236

$
563

$
(1,644
)

$
458,155


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
As of October 31, 2022
Short-term Investments:
Corporate bonds	$	85,788	$	—	$	(1,626	)	$	84,162
Municipal and pre-refunded municipal bonds		58,417		—		(910	)		57,507
US Treasury securities		4,750		—		(55	)		4,695
		148,955		—		(2,591	)		146,364
Long-term Investments:
Corporate bonds		61,707		—		(4,472	)		57,235
Municipal and pre-refunded municipal bonds		28,803		—		(1,801	)		27,002
Mutual funds, held in rabbi trust		12,546		—		(1,786	)		10,760
Certificates of deposit		249		—		—			249
		103,305		—		(8,059	)		95,246
	$	252,260	$	—	$	(10,650	)	$	241,610

Proceeds from the sales and maturities of available-for-sale securities were $~~230,745~~242,847 and $~~237,879~~230,745 for the nine months ended October 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The Company included in “Other ~~loss,~~income (loss), net,” in the Condensed Consolidated Statements of Income, a net realized gain of $2 and a net realized loss of $4 for the three and nine months ended October 31, 2023, respectively, and a net realized loss of $1,131 and $1,465 for the three and nine months ended October 31, 2022, ~~respectively,~~respectively. Amortization of discounts and premiums, net, was a ~~net realized gain~~benefit of $91,406 and $132,578 for the three and nine months ended October 31, ~~2021. Amortization~~2023, respectively, and an expense of ~~discounts and premiums, net, was~~ $1,037 and $3,919 for the three and nine months ended October 31, 2022, ~~respectively, and $1,804~~ ~~and $4,540~~ ~~for the three and nine months ended October 31, 2021,~~ respectively. Amortization of discounts and premiums, net, is included in “Other ~~loss,~~income (loss), net” in the Condensed Consolidated Statements of Income. Mutual funds represent assets held in an irrevocable rabbi trust for the Company’s Non-qualified Deferred Compensation Plan (“NQDC”). These assets are a source of funds to match the funding obligations to participants in the NQDC but are subject to the Company’s general creditors. The Company elected the fair value option for financial assets for the mutual funds held in the rabbi trust resulting in all unrealized gains and losses being recorded in “Other ~~loss,~~income (loss), net” in the Condensed Consolidated Statements of Income.

5.4. Fair Value

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach that relate to its financial assets and financial liabilities). The levels of the hierarchy are described as follows:

•

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•

Level 3: Unobservable inputs that reflect the Company’s own assumptions.

109

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy. The Company’s financial assets that are accounted for at fair value on a recurring basis are presented in the tables below:


	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	October 31, 2022								October 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	—	$	141,397	$	—	$	141,397	$	—	$	153,834	$	—	$	153,834
Federal government agencies										—		114,798		—		114,798
Municipal and pre-refunded municipal bonds		—		84,509		—		84,509		—		57,479		—		57,479
Commercial paper										—		20,976		—		20,976
US Treasury securities										—		20,478		—		20,478
Mutual funds, held in rabbi trust		10,760		—		—		10,760		13,051		—		—		13,051
US Treasury securities		—		4,695		—		4,695
Certificates of deposit		—		249		—		249		—		1,499		—		1,499
	$	10,760	$	230,850	$	—	$	241,610	$	13,051	$	369,064	$	—	$	382,115


	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	January 31, 2022								January 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	—	$	231,215	$	—	$	231,215	$	—	$	141,534	$	—	$	141,534
Federal government agencies										—		15,532		—		15,532
Municipal and pre-refunded municipal bonds		—		188,334		—		188,334		—		69,741		—		69,741
Commercial paper										—		21,636		—		21,636
US Treasury securities										—		23,552		—		23,552
Mutual funds, held in rabbi trust		11,813		—		—		11,813		11,978		—		—		11,978
US Treasury securities		—		20,137		—		20,137
Commercial paper		—		10,884		—		10,884
Federal government agencies		—		345		—		345
Certificates of deposit		—		249		—		249		—		249		—		249
	$	11,813	$	451,164	$	—	$	462,977	$	11,978	$	272,244	$	—	$	284,222


	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	October 31, 2021								October 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	—	$	227,436	$	—	$	227,436	$	—	$	141,397	$	—	$	141,397
Municipal and pre-refunded municipal bonds		—		193,355		—		193,355		—		84,509		—		84,509
US Treasury securities										—		4,695		—		4,695
Mutual funds, held in rabbi trust		12,081		—		—		12,081		10,760		—		—		10,760
US Treasury securities		21,587		—		—		21,587
Commercial paper		—		3,099		—		3,099
Federal government agencies		348		—		—		348
Certificates of deposit		—		249		—		249		—		249		—		249
	$	34,016	$	424,139	$	—	$	458,155	$	10,760	$	230,850	$	—	$	241,610

Financial assets

Level 1 assets consist of financial instruments whose value has been based on inputs that use, as their basis, readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers.

Level 2 assets consist of financial instruments whose value has been based on quoted prices for similar assets and liabilities in active markets as well as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 assets consist of financial instruments where there has been no active market. The Company held no Level 3 financial instruments as of October 31, ~~2022,~~2023, January 31, ~~2022~~2023 and October 31, ~~2021.~~2022.

1110

The fair value of cash and cash equivalents (Level 1) approximates carrying value since cash and cash equivalents consist of short-term highly liquid investments with maturities of less than three months at the time of purchase. As of October 31, ~~2022,~~2023, January 31, ~~2022~~2023 and October 31, ~~2021,~~2022, cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase.

Non-financial assets

The Company’s non-financial assets, primarily consisting of property and equipment and lease-related right-of-use assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The fair value of property and equipment was determined using a discounted cash-flow model that utilized Level 3 inputs. The Company’s retail locations are reviewed for impairment at the retail location level, which is the lowest level at which individual cash flows can be identified. In calculating future cash flows, the Company makes estimates regarding future operating results based on its experience and knowledge of market factors in ~~which the~~its retail ~~location is located.~~locations. Right-of-use assets are tested for impairment in the same manner as property and equipment. For lease right-of-use assets, the Company determines the estimated fair value of the assets by comparing the discounted contractual rent payments to estimated market rent using an acceptable valuation methodology. During the three months ended October 31, 2023 and 2022, the Company determined that certain long-lived assets at the Company's retail locations were unable to recover their carrying ~~value. These assets~~value and were written down to their fair values. During the three months ended October 31, 2023, the Company recorded impairment charges of $1,392 across five retail locations, with a ~~fair~~carrying value ~~resulting in~~after impairment of $5,996 related to the right-of-use assets. During the three months ended October 31, 2022, the Company recorded impairment charges of $958 across four retail locations, with a carrying value after impairment of $12,988 related to the right-of-use assets.

6.5. Debt

On ~~June~~February 10, ~~2022,~~2023, the Company and certain of its subsidiaries entered into the ~~third~~fourth amendment (the ~~“Third~~“Fourth Amendment”) to the Company’s amended and restated credit agreement ~~dated as of~~ ~~June 29, 2018~~ (the “Amended Credit Agreement”), amending the Company’s asset-based revolving credit facility with its lenders, including JPMorgan Chase Bank, N.A., as administrative agent, joint lead arranger and co-book managers along with Wells Fargo Bank, National ~~Association.~~Association (the "Amended Credit Facility"). The ~~Third~~Fourth Amendment ~~extends~~permits the ~~maturity date~~Company to purchase an equity membership interest in a federal low-income housing tax credit entity. See Note 6, "Tax Credit Investment," for further discussion of the ~~senior secured revolving credit facility to~~ ~~June 2027, replaces LIBOR as a reference interest rate for borrowings and amends certain other provisions (the “Amended Credit Facility”).~~investment.

The Amended Credit Facility provides for loans and letters of credit up to $350,000, subject to a borrowing base that is comprised of the Company’s eligible accounts receivable and inventory and includes a swing-line sub-facility, a multicurrency sub-facility and the option to expand the facility by up to $150,000. Borrowings under the Amended Credit Facility may be used for working capital and other general corporate purposes. The Amended Credit Facility matures in June 2027.

The Amended Credit Facility provides for interest on borrowings, at the Company’s option, at either (i) adjusted SOFR, CDOR, SONIA or EURIBOR plus an applicable margin ranging from 1.125% to 1.375%, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125% to 0.375%, each such applicable margin depending on the level of availability under the Amended Credit Facility. Depending on the type of borrowing, interest on the Amended Credit Facility is payable monthly, quarterly or at the end of the applicable interest period. A commitment fee of 0.20% is payable quarterly on the unused portion of the Amended Credit Facility.

All obligations under the Amended Credit Facility are unconditionally guaranteed by the Company and certain of its U.S. subsidiaries. The obligations under the Amended Credit Facility are secured by a first-priority security interest in inventory, accounts receivable and certain other assets of the Company and certain of its U.S. subsidiaries. The obligations of URBN Canada Retail, Inc. are secured by a first-priority security interest in its inventory, accounts receivable and certain other assets. The Amended Credit Agreement contains customary representations and warranties, negative and affirmative covenants and provisions relating to events of default.

As of October 31, ~~2022,~~2023, the Company had $0 in borrowings under the Amended Credit Facility. As of October 31, ~~2022,~~2023, the Company was in compliance with the terms of the Amended Credit Agreement and expects to remain in compliance with all terms, including covenants, of the Amended Credit Agreement. Outstanding stand-by letters of credit, which reduce the funds available under the Amended Credit Facility, were $~~11,897~~13,258. Interest expense for the

Amended Credit Facility was $~~754~~727 and $~~783~~754 for the nine months ended October 31, ~~2022~~2023 and ~~2021,~~2022, respectively, which was included in “Other ~~loss,~~income (loss), net” in the Condensed Consolidated Statements of Income.

~~7. Leases~~6. Tax Credit Investment

On February 10, 2023, the Company committed $100,000 to purchase an equity membership interest in a federal low-income housing tax credit entity. An initial payment of $20,000 was paid at closing with the remaining balance payable in quarterly installments over a five-year period beginning in fiscal 2024. The present value of such payments was $62,120 and was recorded as an increase to the initial tax credit investment asset and liability. In exchange for the total payments of $100,000, the Company expects to realize a comparable amount of tax credits and other tax benefits that will reduce its future federal income tax payments. Although the investment vehicle is considered a variable interest entity, the Company is not the primary beneficiary, and therefore, the investment is not consolidated. The Company has ~~operating leases for stores, distribution and fulfillment centers, corporate offices and equipment. The Company subleases certain properties~~elected to ~~third parties.~~

~~Operating and variable lease costs during~~use the ~~three and~~practical expedient method of amortization, which approximates the proportional amortization method, to amortize the investment to income tax expense in proportion to the tax credits received over an estimated 10-year tax credit period beginning in the first quarter of fiscal 2024. During the nine months ended October 31, ~~2022~~2023, interest expense related to the accretion of the liability was $4,875 and a net benefit of $5,050 was included in “Income tax expense” in the Condensed Consolidated Statements of Income. The carrying value of the investment is recorded in "Deferred income taxes and other assets" in the Condensed Consolidated Balance Sheets. The liabilities for the present value of the estimated future capital contributions are recorded in "Accrued expenses, accrued compensation and other current liabilities" and "Deferred rent and other liabilities" in the Condensed Consolidated Balance Sheets. The following table summarizes the balances related to the investment at October 31, ~~2021 were as follows:~~2023:

Three Months Ended

Nine Months Ended

October 31,

October 31,

2022

2021

2022

2021

Operating lease costs

$
63,615

$
66,903

$
189,662

$
203,405

Variable lease costs

33,607

28,908

100,103

77,589

Total lease costs

$
97,222

$
95,811

$
289,765

$
280,994

~~Short-term lease costs and sublease income were not material during the three and nine months ended October 31, 2022 and October 31, 2021.~~

~~The following is a schedule by year of the maturities of operating lease liabilities with original terms in excess of one year, as of October 31, 2022:~~

Operating

Leases

Fiscal Year

2023 (excluding the nine months ended October 31, 2022)

$
76,404

2024

272,593

2025

238,771

2026

202,448

2027

148,319

Thereafter

440,004

Total undiscounted future minimum lease payments

1,378,539

Less imputed interest

(293,128
)
Total discounted future minimum lease payments

$
1,085,411


	October 31,
	2023
Deferred income taxes and other assets	$	70,190
Accrued expenses, accrued compensation and other current liabilities		7,738
Deferred rent and other liabilities		51,375

~~As of October 31, 2022, the Company had commitments of approximately $42,487~~ ~~not included in the amounts above related to~~ ~~nine~~ ~~executed but not yet commenced leases.~~

8.7. Share-Based Compensation

The Company maintains stock incentive plans pursuant to which it can grant restricted shares, unrestricted shares, incentive stock options, non-qualified stock options, restricted stock units (“~~RSU’s”~~RSUs”), performance stock units (“~~PSU’s”~~PSUs”) or stock appreciation ~~rights (“SAR’s”).~~rights. The fair value of ~~PSU’s~~PSUs and ~~RSU’s~~RSUs is equal to the stock price on the date of the grant. Share-based compensation expense included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income, for the three and nine months ended October 31, ~~2022~~2023 and ~~2021,~~2022, was as follows:


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	October 31,				October 31,				October 31,				October 31,
	2022		2021		2022		2021		2023		2022		2023		2022
Performance Stock Units	$	1,280	$	1,070	$	3,697	$	2,996	$	1,231	$	1,280	$	3,782	$	3,697
Restricted Stock Units		6,582		6,030		18,274		16,072		6,458		6,582		19,463		18,274
Total	$	7,862	$	7,100	$	21,971	$	19,068	$	7,689	$	7,862	$	23,245	$	21,971

Share-based awards granted and the weighted-average fair value of such awards for the nine months ended October 31, ~~2022~~2023 was as follows:


	Nine Months Ended				Nine Months Ended
	October 31, 2022				October 31, 2023
			Weighted-				Weighted-
	Awards		Average Fair		Awards		Average Fair
	Granted		Value		Granted		Value
Performance Stock Units		167,500	$	25.38		160,887	$	26.96
Restricted Stock Units		1,105,500	$	24.85		962,116	$	27.32
Total		1,273,000				1,123,003

During the nine months ended October 31, ~~2022,~~2023, ~~20,000~~25,000 stock options were exercised, ~~80,001~~131,248 ~~PSU’s~~PSUs vested and ~~625,881~~756,036 ~~RSU’s~~RSUs vested.

The total unrecognized compensation cost related to outstanding share-based awards and the weighted-average period in which the cost is expected to be recognized as of October 31, ~~2022~~2023 was as follows:


	October 31, 2022				October 31, 2023
	Unrecognized		Weighted-		Unrecognized		Weighted-
	Compensation		Average		Compensation		Average
	Cost		Years		Cost		Years
Performance Stock Units	$	7,225		2.0	$	6,500		1.9
Restricted Stock Units		37,700		2.0		35,618		2.0
Total	$	44,925			$	42,118

98. Shareholders’ Equity

Share repurchase activity under the Company’s share repurchase programs was as follows:

Three Months Ended

Nine Months Ended

October 31,

October 31,

2022

2021

2022

2021

Number of common shares repurchased and subsequently retired

—

500,000

4,736,405

500,000

Total cost

$
—

$
14,888

$
112,016

$
14,888

Average cost per share, including commissions

$
—

$
29.78

$
23.65

$
29.78


	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2023		2022		2023		2022
Number of common shares repurchased and subsequently retired		—		—		—		4,736,405
Total cost	$	—	$	—	$	—	$	112,016
Average cost per share, including commissions	$	—	$	—	$	—	$	23.65

On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20,000,000 common shares under a share repurchase program; all shares were repurchased and the authorization was completed by the end of June 2022. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of an additional 20,000,000 common shares under a share repurchase program. As of October 31, ~~2022,~~2023, 19,156,390 common shares were remaining under the program.

During the nine months ended October 31, 2023, the Company acquired and subsequently retired 308,649 common shares at a total cost of $8,353 from employees to meet payroll tax withholding requirements on vested share-based awards. During the nine months ended October 31, 2022, the Company acquired and subsequently retired 246,034 common shares at a total cost of $6,680 from employees to meet payroll tax withholding requirements on vested ~~awards. During the nine months ended October 31, 2021, the Company acquired and subsequently retired~~ ~~225,757~~ ~~common shares at a total cost of $7,684~~ ~~from employees to meet payroll tax withholding requirements on vested~~share-based awards.

109. Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

The following tables present the changes in “Accumulated other comprehensive loss,” by component, net of tax, for the three and nine months ended October 31, ~~2022~~2023 and ~~2021:~~2022:


	Three Months Ended October 31, 2022									Nine Months Ended October 31, 2022									Three Months Ended October 31, 2023									Nine Months Ended October 31, 2023
				Unrealized Gains									Unrealized Gains									Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on						Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-						Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total			Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(42,836	)	$	(7,349	)	$	(50,185	)	$	(22,204	)	$	(2,626	)	$	(24,830	)	$	(35,132	)	$	(3,670	)	$	(38,802	)	$	(42,824	)	$	(5,811	)	$	(48,635	)
Other comprehensive income (loss) before reclassifications		(13,451	)		700			(12,751	)		(34,083	)		(3,689	)		(37,772	)		(11,961	)		592			(11,369	)		(4,269	)		2,739			(1,530	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(1,131	)		(1,131	)		—			(1,465	)		(1,465	)		—			2			2			—			(4	)		(4	)
Net current-period other comprehensive income (loss)		(13,451	)		(431	)		(13,882	)		(34,083	)		(5,154	)		(39,237	)		(11,961	)		594			(11,367	)		(4,269	)		2,735			(1,534	)
Balance at end of period	$	(56,287	)	$	(7,780	)	$	(64,067	)	$	(56,287	)	$	(7,780	)	$	(64,067	)	$	(47,093	)	$	(3,076	)	$	(50,169	)	$	(47,093	)	$	(3,076	)	$	(50,169	)


	Three Months Ended October 31, 2021									Nine Months Ended October 31, 2021									Three Months Ended October 31, 2022									Nine Months Ended October 31, 2022
				Unrealized Gains									Unrealized Gains									Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on						Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-						Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total			Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(12,922	)	$	(166	)	$	(13,088	)	$	(16,950	)	$	(170	)	$	(17,120	)	$	(42,836	)	$	(7,349	)	$	(50,185	)	$	(22,204	)	$	(2,626	)	$	(24,830	)
Other comprehensive income (loss) before reclassifications		(2,605	)		(1,038	)		(3,643	)		1,423			(1,038	)		385			(13,451	)		700			(12,751	)		(34,083	)		(3,689	)		(37,772	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			9			9			—			13			13			—			(1,131	)		(1,131	)		—			(1,465	)		(1,465	)
Net current-period other comprehensive income (loss)		(2,605	)		(1,029	)		(3,634	)		1,423			(1,025	)		398			(13,451	)		(431	)		(13,882	)		(34,083	)		(5,154	)		(39,237	)
Balance at end of period	$	(15,527	)	$	(1,195	)	$	(16,722	)	$	(15,527	)	$	(1,195	)	$	(16,722	)	$	(56,287	)	$	(7,780	)	$	(64,067	)	$	(56,287	)	$	(7,780	)	$	(64,067	)

All unrealized gains and losses on available-for-sale securities reclassified from accumulated other comprehensive loss were recorded in “Other ~~loss,~~income (loss), net” in the Condensed Consolidated Statements of Income.

~~11.~~10. Net Income per Common Share

The following is a reconciliation of the weighted-average common shares outstanding used for the computation of basic and diluted net income per common share:


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	October 31,				October 31,				October 31,				October 31,
	2022		2021		2022		2021		2023		2022		2023		2022
Basic weighted-average common shares outstanding		92,174,160		98,202,399		93,544,085		98,209,796		92,780,736		92,174,160		92,667,878		93,544,085
Effect of dilutive options, performance stock units and restricted stock units		861,906		1,213,439		778,698		1,237,755		1,667,640		861,906		1,500,180		778,698
Diluted weighted-average shares outstanding		93,036,066		99,415,838		94,322,783		99,447,551		94,448,376		93,036,066		94,168,058		94,322,783

For the three months ended October 31, ~~2022~~2023 and ~~2021,~~2022, awards to purchase ~~205,000~~40,000 common shares ~~ranging in~~at a price ~~from~~of $~~23.74~~ to $46.42 and ~~160,000~~205,000 common shares ranging in price from $~~38.09~~23.74 to $46.42, respectively, were excluded from the calculation of diluted net income per common share because the impact would be anti-dilutive.

For the nine months ended October 31, ~~2022~~2023 and ~~2021,~~2022, awards to purchase66,667 common shares ranging in price from $28.47 to $46.42 and 203,333 common shares ranging in price from $23.74 to $46.42 ~~and~~ ~~173,333~~ ~~common shares ranging in price from $35.85~~ ~~to $46.42~~, respectively, were excluded from the calculation of diluted net income per common share because the impact would be anti-dilutive.

Excluded from the calculation of diluted net income per common share as of October 31, ~~2022~~2023 and October 31, ~~2021,~~2022, were ~~167,500~~272,554 and ~~30,001~~167,500 performance-based equity awards, respectively, because they did not meet the required performance criteria.

~~12.~~11. Commitments and Contingencies

The Company is party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

~~13.~~12. 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~~includes the Anthropologie, ~~Bhldn,~~ Free People, FP Movement ~~Terrain,~~and 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~~includes 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~~includes the Nuuly brand, which offers customers a more sustainable way to explore ~~fashion. Nuuly Rent is~~fashion through 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.

1716

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.~~2023. 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						Three Months Ended						Nine Months Ended
	October 31,						October 31,						October 31,						October 31,
	2022			2021			2022			2021			2023			2022			2023			2022
Net sales
Retail operations	$	1,067,531		$	1,043,905		$	3,126,157		$	2,990,413		$	1,145,766		$	1,067,531		$	3,309,956		$	3,126,157
Wholesale operations		80,223			79,549			211,194			208,112			74,257			80,223			198,440			211,194
Nuuly operations		35,279			12,688			86,904			30,447			65,516			35,279			172,779			86,904
Intersegment elimination		(7,684	)		(4,718	)		(13,584	)		(12,408	)		(4,365	)		(7,684	)		(14,132	)		(13,584	)
Total net sales	$	1,175,349		$	1,131,424		$	3,410,671		$	3,216,564		$	1,281,174		$	1,175,349		$	3,667,043		$	3,410,671
Income from operations
Retail operations	$	64,427		$	126,615		$	216,260		$	377,489		$	111,731		$	64,427		$	338,995		$	216,260
Wholesale operations		12,782			10,098			30,021			33,377			14,525			12,782			27,910			30,021
Nuuly operations		(3,228	)		(4,900	)		(9,358	)		(11,800	)		280			(3,228	)		(2,430	)		(9,358	)
Intersegment elimination		547			850			1,137			1,195			54			547			(358	)		1,137
Total segment operating income		74,528			132,663			238,060			400,261			126,590			74,528			364,117			238,060
General corporate expenses		(17,210	)		(16,761	)		(48,687	)		(45,003	)		(17,612	)		(17,210	)		(51,658	)		(48,687	)
Total income from operations	$	57,318		$	115,902		$	189,373		$	355,258		$	108,978		$	57,318		$	312,459		$	189,373


	October 31,		January 31,		October 31,		October 31,		January 31,		October 31,
	2022		2022		2021		2023		2023		2022
Inventory
Retail operations	$	682,005	$	507,510	$	582,711	$	679,757	$	529,853	$	682,005
Wholesale operations		61,574		62,189		44,392		41,254		57,657		61,574
Total inventory	$	743,579	$	569,699	$	627,103	$	721,011	$	587,510	$	743,579
Rental product, net (1)
Nuuly operations	$	76,449	$	32,075	$	22,203	$	140,749	$	90,934	$	76,449
Total rental product, net	$	76,449	$	32,075	$	22,203	$	140,749	$	90,934	$	76,449

(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	$	1,182,197	$	1,138,487	$	1,133,561
Wholesale operations		1,073		1,458		1,593		1,694		990		1,073
Nuuly operations		40,446		30,333		30,412		88,761		48,258		40,446
Total property and equipment, net	$	1,175,080	$	1,145,085	$	1,088,287	$	1,272,652	$	1,187,735	$	1,175,080

1817

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


	Three Months Ended								Three Months Ended
	October 31,								October 31,
	2022				2021				2023				2022
Net sales
Apparel	$	688,630	64	%	$	679,692	65	%	$	771,166	67	%	$	688,630	64	%
Home		192,384	18	%		192,312	18	%		173,062	15	%		192,384	18	%
Accessories		135,784	13	%		128,065	13	%		148,338	13	%		135,784	13	%
Other		50,733	5	%		43,836	4	%		53,200	5	%		50,733	5	%
Retail operations		1,067,531	100	%		1,043,905	100	%		1,145,766	100	%		1,067,531	100	%
Apparel		65,713	91	%		70,097	94	%		61,324	88	%		65,713	91	%
Accessories		6,603	9	%		4,476	6	%		8,331	12	%		6,603	9	%
Other		223	0	%		258	0	%		237	0	%		223	0	%
Wholesale operations		72,539	100	%		74,831	100	%
Wholesale operations (1)										69,892	100	%		72,539	100	%
Nuuly operations		35,279				12,688				65,516				35,279
Total net sales	$	1,175,349			$	1,131,424			$	1,281,174			$	1,175,349

	Nine Months Ended								Nine Months Ended
	October 31,								October 31,
	2022				2021				2023				2022
Net sales
Apparel	$	2,049,571	66	%	$	1,948,748	65	%	$	2,253,486	68	%	$	2,049,571	66	%
Home		548,292	17	%		553,996	19	%		492,689	15	%		548,292	17	%
Accessories		383,409	12	%		361,516	12	%		408,977	12	%		383,409	12	%
Other		144,885	5	%		126,153	4	%		154,804	5	%		144,885	5	%
Retail operations		3,126,157	100	%		2,990,413	100	%		3,309,956	100	%		3,126,157	100	%
Apparel		179,440	91	%		186,755	96	%		166,381	90	%		179,440	91	%
Accessories		17,577	9	%		8,299	4	%		16,350	9	%		17,577	9	%
Other		593	0	%		650	0	%		1,577	1	%		593	0	%
Wholesale operations		197,610	100	%		195,704	100	%
Wholesale operations (1)										184,308	100	%		197,610	100	%
Nuuly operations		86,904				30,447				172,779				86,904
Total net sales	$	3,410,671			$	3,216,564			$	3,667,043			$	3,410,671

(1)

Net of intersegment elimination.

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.~~handling.

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,		October 31,		January 31,		October 31,
	2022		2022		2021		2023		2023		2022
Property and equipment, net
Domestic operations	$	1,024,693	$	965,777	$	894,106	$	1,123,317	$	1,033,926	$	1,024,693
Foreign operations		150,387		179,308		194,181		149,335		153,809		150,387
Total property and equipment, net	$	1,175,080	$	1,145,085	$	1,088,287	$	1,272,652	$	1,187,735	$	1,175,080

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


	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2023		2022		2023		2022
Net Sales
Domestic operations	$	1,121,033	$	1,023,420	$	3,205,038	$	2,959,302
Foreign operations		160,141		151,929		462,005		451,369
Total net sales	$	1,281,174	$	1,175,349	$	3,667,043	$	3,410,671

2019

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain matters contained in this filing with the United States Securities and Exchange Commission (“SEC”) may contain forward-looking statements and are being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: ~~the impacts of public health crises such as the coronavirus (COVID-19) pandemic,~~ overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom’s withdrawal from membership in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war ~~(including~~including geopolitical ~~instability),~~instability and impacts of the conflict in the Middle East and the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises (such as the coronavirus (COVID-19)), labor shortages and increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs, border adjustment taxes or increases in duties or quotas), the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the SEC, including those set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2022,~~2023, filed on April ~~1, 2022.~~3, 2023. We disclaim any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.

Unless the context otherwise requires, all references to the “Company,” “we,” “us” or “our” refer to Urban Outfitters, Inc., together with its subsidiaries.

Overview

We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment ~~consists of~~includes our Anthropologie, ~~Bhldn,~~ Free People, FP Movement ~~Terrain,~~and Urban Outfitters ~~and Menus & Venues~~ brands. Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers and franchisee-owned stores. ~~The~~Our Wholesale segment ~~consists of~~includes our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment. ~~The~~Our Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Nuuly segment ~~consists of~~includes the Nuuly brand, which offers customers a more sustainable way to explore ~~fashion. Nuuly Rent is~~fashion through a monthly women’s apparel subscription rental service. ~~Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where users can buy and sell women’s, men’s and kids’ clothes, shoes and accessories.~~

Our fiscal year ends on January 31. All references to our fiscal years refer to the fiscal years ended on January 31 in those years. For example, our fiscal year ~~2023~~2024 will end on January 31, ~~2023,~~2024, and our fiscal year ~~2022~~2023 ended on January 31, ~~2022.~~2023.

As used in this document, unless otherwise defined, "Anthropologie" refers to our Anthropologie and Terrain brands and "Free People" refers to our Free People and FP Movement brands.

~~Current Trends~~

~~Impact of the Coronavirus Pandemic on Fiscal 2022~~

~~Impact of the Coronavirus Pandemic and Macroeconomic Uncertainties on Fiscal 2023 and Future Operations~~

Retail Segment

Our Retail segment omni-channel strategy enhances our 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. Our 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. We manage and analyze our performance based on a single Retail segment omni-channel rather than separate channels and believe that the Retail segment omni-channel results present the most meaningful and appropriate measure of our performance.

Our comparable Retail segment net sales data is equal to the sum of our comparable store and comparable digital channel net sales. A store is considered to be comparable if it has been open at least 12 full months, unless it was materially expanded or remodeled within that year or was not otherwise operating at its full capacity within that year due to store specific closures from events such as damage from fire, flood and natural weather events. ~~The Company did not remove stores that were closed or operating for an extended period of time at a reduced capacity due to the COVID-19 pandemic from the comparable stores net sales calculations.~~ A digital channel is considered to be comparable if it has been operational for at least 12 full months. Sales from stores and digital channels that do not fall within the definition of comparable store or digital channel are considered to be non-comparable. Franchise net sales and the effects of foreign currency translation are also considered non-comparable.

We monitor Retail segment metrics including customer traffic, conversion rates, average units per transaction at our stores and on our websites and mobile ~~applications and~~applications. We also monitor average unit selling price and transactions at our stores and average order value on our websites and mobile applications. We believe that changes in any of these metrics may be caused by a response to our brands’ fashion offerings, our marketing campaigns, circulation of our catalogs and an overall growth in brand recognition.

Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, social media and third-party digital platforms, websites and mobile applications and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. Urban Outfitters’ North American Retail segment net sales accounted for approximately ~~23.6%~~18.0% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to approximately ~~28.1%~~23.6% for the comparable period in fiscal ~~2022.~~2023. European Retail segment net sales accounted for ~~8.8%~~approximately 8.2% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to approximately ~~9.0%~~8.8% for the comparable period in fiscal ~~2022.~~2023.

The Anthropologie ~~Group consists of the Anthropologie, Bhldn and Terrain brands. Merchandise at the Anthropologie~~ brand ~~is tailored~~tailors its merchandise to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party ~~brand~~branded product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The ~~Bhldn~~ brand ~~emphasizes every element that contributes to~~also has a ~~wedding. The Bhldn brand offers a curated~~wedding collection consisting of ~~heirloom quality~~ wedding, ~~gowns,~~ bridesmaid ~~frocks,~~and party dresses, ~~assorted jewelry, head pieces, footwear, lingerie~~bridal accessories and ~~decorations.~~decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. ~~In addition to individual brand stores, the~~ Anthropologie Group operates expanded format stores that include multiple Anthropologie Group brands, which allows for the presentation of an expanded assortment of products in certain categories. Anthropologie Group stores are located in specialty centers, upscale street locations and enclosed malls. ~~The~~ Anthropologie ~~Group~~ operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers a catalog in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East. ~~The Anthropologie Group’s~~Anthropologie's North American Retail segment net sales accounted for approximately ~~38.8%~~40.9% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to approximately ~~36.6%~~38.8% for the comparable period in fiscal ~~2022.~~2023. European Retail segment net sales accounted for ~~1.8%~~approximately 1.5% of consolidated net sales for the nine months ended October 31, ~~2022, and~~2023, compared to approximately 1.8% for the comparable period in fiscal ~~2022.~~2023.

~~The Free People Group consists of the Free People and FP Movement brands.~~ The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, ~~FP Movement~~ activewear, shoes,

accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People ~~Group~~ stores are located in enclosed malls, upscale street locations and specialty centers. ~~The~~ Free People ~~Group~~ operates websites and mobile applications in North America and Europe that capture the spirit of ~~the brand~~its brands by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all of the Free People and FP Movement wholesale offerings. ~~The~~ Free People ~~Group~~ also offers catalogs that market select merchandise, most of which is also available in our Free People ~~and FP Movement~~ stores. ~~The~~ Free ~~People Group’s~~People's North American Retail segment net sales accounted for approximately ~~17.3%~~20.0% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to approximately ~~16.4%~~17.3% for the comparable period in fiscal ~~2022.~~2023. European Retail segment net sales accounted for ~~less than~~approximately 1.0% of consolidated net sales for the nine months ended October 31, ~~2022, and~~2023, compared to less than 1.0% for the comparable period in fiscal ~~2022.~~2023.

~~The Menus & Venues brand focuses on~~Net sales from the ~~dining and event experience that provides excellence in food, beverage and service. The Menus & Venues brand net sales~~Retail segment accounted for ~~less than 1.0%~~approximately 90.3% of consolidated net sales for the nine months ended October 31, ~~2022, and the comparable period in fiscal 2022.~~

~~Net sales from the Retail segment accounted for approximately 91.7% of consolidated net sales for the nine months ended October 31, 2022,~~2023, compared to ~~93.0%~~91.7% for the comparable period in fiscal ~~2022.~~2023.

Store data for the nine months ended October 31, ~~2022~~2023 was as follows:


	January 31,		Stores		Stores			October 31,		January 31,		Stores		Stores			October 31,
	2022		Opened		Closed			2022		2023		Opened		Closed			2023
Urban Outfitters
United States		184		3		(2	)		185		183		1		(3	)		181
Canada		18		—		—			18		18		1		—			19
Europe		59		2		—			61		62		3		(1	)		64
Urban Outfitters Global Total		261		5		(2	)		264		263		5		(4	)		264
Anthropologie Group
Anthropologie
United States		206		3		(1	)		208		207		5		(3	)		209
Canada		11		—		—			11		10		—		(1	)		9
Europe		21		1		—			22		21		—		—			21
Anthropologie Group Global Total		238		4		(1	)		241
Free People Group
Anthropologie Global Total											238		5		(4	)		239
Free People
United States (1)		162		9		(1	)		170		174		9		(1	)		182
Canada		5		—		—			5		3		—		—			3
Europe		6		4		—			10		11		1		—			12
Free People Group Global Total		173		13		(1	)		185
Free People Global Total											188		10		(1	)		197
Menus & Venues(2)
United States		10		1		—			11		11		1		(1	)		11
Menus & Venues Total		10		1		—			11		11		1		(1	)		11
Total Company-Owned Stores		682		23		(4	)		701		700		21		(10	)		711
Franchisee-Owned Stores ~~(2)~~(3)		3		3		—			6		8		1		—			9
Total URBN		685		26		(4	)		707		708		22		(10	)		720

(1)

~~Seven~~Six FP Movement stores were opened during the nine months ended October 31, ~~2022. Twenty-seven~~2023. 37 FP Movement stores were open as of October 31, ~~2022.~~2023.

(2)

Menus & Venues includes various casual restaurants and event venues.

(3)

Franchisee-owned stores are located in the Middle East.

Selling square footage by brand as of October 31, ~~2022~~2023 and ~~2021~~2022 was as follows:


	October 31,		October 31,					October 31,		October 31,
	2022		2021		Change			2023		2022		Change
Selling square footage (in thousands):
Urban Outfitters		2,282		2,270		0.5	%		2,272		2,282		-0.4	%
Anthropologie Group		1,830		1,838		-0.4	%
Free People Group (1)		386		362		6.6	%
Anthropologie									1,813		1,830		-0.9	%
Free People (1)									409		386		6.0	%
Total URBN (2)		4,498		4,470		0.6	%		4,494		4,498		-0.1	%

(1)

Selling square footage for FP Movement was 3547 and 1835 as of October 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

(2)

Menus & Venues locations and franchisee-owned stores are not included in selling square footage.

We plan for future store growth for ~~all three~~our brands to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements. We plan for future digital channel growth to come from expansion domestically and internationally.

Projected openings and closings for fiscal ~~2023~~2024 are as follows:


	January 31,		Projected		Projected			January 31,		January 31,		Projected		Projected			January 31,
	2022		Openings		Closings			2023		2023		Openings		Closings			2024
Urban Outfitters		261		7		(5	)		263		263		7		(9	)		261
Anthropologie Group		238		6		(5	)		239
Free People Group (1)		173		19		(5	)		187
Anthropologie											238		7		(8	)		237
Free People (1)											188		12		(4	)		196
Menus & Venues		10		1		—			11		11		1		(1	)		11
Total Company-Owned Stores		682		33		(15	)		700		700		27		(22	)		705
Franchisee-Owned Stores		3		5		—			8		8		1		—			9
Total URBN		685		38		(15	)		708		708		28		(22	)		714

(1)

Includes 11seven projected FP Movement ~~projected~~ store openings.

Wholesale Segment

Our Wholesale segment ~~consists of~~includes the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our 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 brand~~and FP Movement brands and the BDG and “iets frans” ~~brand~~ apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately ~~5.8%~~5.0% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to ~~6.1%~~5.8% for the comparable period in fiscal ~~2022.~~2023.

Nuuly Segment

Our Nuuly segment ~~consists of~~includes the Nuuly brand, which ~~includes Nuuly Rent and Nuuly Thrift. 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 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 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. The Company earns a commission based on sales made in the marketplace. Our Nuuly segment net sales accounted for approximately ~~2.5%~~4.7% of consolidated net sales for the nine months ended October 31, ~~2022,~~2023, compared to ~~less than 1.0%~~approximately 2.5% for the comparable period in fiscal ~~2022.~~2023.

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States. These generally accepted accounting principles require management to

make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period.

~~Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors.~~ Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended January 31, ~~2022,~~2023, which are included in our Annual Report on Form 10-K filed with the SEC on April ~~1, 2022.~~3, 2023. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates. There have been no significant changes to our critical accounting policies during the nine months ended October 31, ~~2022.~~2023.

Results of Operations

As a Percentage of Net Sales

The table below sets forth, for the periods indicated, certain income statement data and the percentage of our net sales represented by such data. The table should be read in conjunction with the discussion that follows.

Three Months Ended October 31, 2023 (Fiscal 2024) Compared To

Three Months Ended October 31, 2022 (Fiscal 2023) ~~Compared To~~

~~Three Months Ended October 31, 2021 (Fiscal 2022)~~


(amounts in millions)	Three Months Ended													Three Months Ended
	October 31,													October 31,
	2022							2021						2023					2022
Net sales	$	1,175.3			100.0		%	$	1,131.4			100.0	%	$	1,281.2		100.0	%	$	1,175.3			100.0	%
Cost of sales (excluding store impairment)		817.3		69.5					740.7			65.5			825.4	64.4				817.3			69.5
Store impairment		1.0		0.1					—			—			1.4	0.1				1.0			0.1
Gross profit		357.0			30.4				390.7			34.5			454.4		35.5			357.0			30.4
Selling, general and administrative expenses		299.7		25.5					274.8			24.3			345.4		27.0			299.7			25.5
Income from operations		57.3			4.9				115.9			10.2			109.0		8.5			57.3			4.9
Other loss, net		(5.0	)		(0.5	)			(0.5	)	(0.0)
Other income (loss), net															0.7		0.1			(5.0	)	(0.5)
Income before income taxes		52.3			4.4				115.4			10.2			109.7		8.6			52.3			4.4
Income tax expense		15.1		1.2					26.5			2.3			26.7	2.1				15.1			1.2
Net income	$	37.2			3.2		%	$	88.9			7.9	%	$	83.0		6.5	%	$	37.2			3.2	%

Net sales for the third quarter of fiscal ~~2023~~2024 were ~~$1.18~~$1.28 billion, compared to ~~$1.13~~$1.18 billion in the third quarter of fiscal ~~2022.~~2023. The ~~$43.9~~$105.8 million increase was attributable to a ~~$23.6~~$78.2 million, or ~~2.3%~~7.3%, increase in Retail segment net sales and an increase in Nuuly segment net sales of ~~$22.6~~$30.2 million, or ~~178.1%~~85.7%, partially offset by a ~~$2.3~~$2.6 million, or ~~3.1%~~3.6%, decrease in Wholesale segment net sales. ~~Retail segment net sales for the third quarter of fiscal 2023 accounted for 90.8% of total net sales compared to 92.3% of total net sales in the third quarter of fiscal 2022.~~

The increase in our Retail segment net sales during the third quarter of fiscal ~~2023~~2024 was due to an increase of ~~$36.0~~$58.8 million, or ~~3.6%~~5.6%, in Retail segment comparable net sales, ~~partially offset by a decrease~~and an increase of ~~$12.4~~$19.4 million in non-comparable net sales. Retail segment comparable net sales increased ~~13.1%~~22.5% at ~~the Anthropologie Group and 8.1% at the~~ Free People ~~Group~~and 13.2% at Anthropologie and decreased ~~9.1%~~14.2% at Urban Outfitters. Retail segment comparable net sales increased in ~~both~~ North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by ~~mid-single-digit~~high single-digit positive growth in digital channel sales and ~~low~~mid single-digit positive growth in retail store sales. The digital channel comparable net sales increase was driven by increases in sessions and average order value, while conversion rate and units per transaction decreased. Comparable store net sales increased as higher store traffic and average unit retail price were partially offset by decreases in units per transaction, transactions and conversion rate. The increase in non-comparable net sales during the third quarter of fiscal 2024 was primarily due to the impact of the 17 net new Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.

The increase in Nuuly segment net sales was primarily driven by a 68% increase in our number of subscribers compared to the prior year's comparable quarter. The decrease in Wholesale segment net sales in the third quarter of fiscal 2024, as compared to the third quarter of fiscal 2023, was primarily due to a $2.3 million, or 3.5%, decrease in Free People wholesale sales. The Free People wholesale sales decrease was primarily due to a decrease in sales to department stores and closeout account partners.

Gross profit percentage for the third quarter of fiscal 2024 increased to 35.5% of net sales from 30.4% of net sales in the third quarter of fiscal 2023. Gross profit increased to $454.4 million in the third quarter of fiscal 2024 from $357.0 million in the third quarter of fiscal 2023. The increase in gross profit rate was primarily due to higher initial merchandise markups and lower merchandise markdowns in the Retail segment at Anthropologie, Free People and Urban Outfitters. The improvement in initial merchandise markups was primarily driven by lower inbound transportation costs. The increase in gross profit dollars was due to the improved gross profit rate and higher net sales.

Total inventory at October 31, 2023, as compared to October 31, 2022, decreased by $22.6 million, or 3.0%, to $721.0 million. Total Retail segment inventory was flat, while Retail segment comparable inventory increased 1.2%. Wholesale segment inventory decreased by 33.0% due to improved inventory control and a reduction in wholesale sales.

Selling, general and administrative expenses increased by $45.7 million, or 15.2%, in the third quarter of fiscal 2024, compared to the third quarter of fiscal 2023. Selling, general and administrative expenses as a percentage of net sales increased in the third quarter of fiscal 2024 to 27.0% of net sales, compared to 25.5% of net sales for the third quarter of fiscal 2023. The deleverage in selling, general and administrative expenses as a rate to sales was primarily related to increased marketing and creative expenses to support increased sales and customer growth and higher incentive-based compensation costs due to improved Company performance. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing and creative expenses to support increased sales and customer growth, increased store payroll expenses to support retail store comparable net sales growth and the net growth in retail store count and higher incentive-based compensation costs due to improved Company performance.

Income from operations was 8.5% of net sales, or $109.0 million, for the third quarter of fiscal 2024 compared to 4.9% of net sales, or $57.3 million, for the third quarter of fiscal 2023. The increase in operating income was primarily driven by the increase in gross profit. The increase in operating income rate was primarily due to the higher gross profit rate.

Our effective tax rate for the third quarter of fiscal 2024 was 24.3% compared to 28.8% in the third quarter of fiscal 2023. The change in effective tax rate for the three months ended October 31, 2023 was attributable to the ratio of foreign taxable earnings to global taxable earnings and the favorable impact of general business credits in the current year.

Nine Months Ended October 31, 2023 (Fiscal 2024) Compared To

Nine Months Ended October 31, 2022 (Fiscal 2023)


(amounts in millions)	Nine Months Ended
	October 31,
	2023					2022
Net sales	$	3,667.0		100.0	%	$	3,410.7			100.0		%
Cost of sales (excluding store impairment)		2,384.4		65.1			2,354.8			69.1
Store impairment		1.4		0.0			1.0		0.0
Gross profit		1,281.2		34.9			1,054.9			30.9
Selling, general and administrative expenses		968.7		26.4			865.5			25.3
Income from operations		312.5		8.5			189.4			5.6
Other income (loss), net		5.1		0.2			(9.3	)		(0.3	)
Income before income taxes		317.6		8.7			180.1			5.3
Income tax expense		77.7	2.2				51.9			1.5
Net income	$	239.9		6.5	%	$	128.2			3.8		%

Net sales for the nine months ended October 31, 2023 were $3.67 billion, compared to $3.41 billion in the comparable period of fiscal 2023. The $256.4 million increase was attributable to a $183.8 million, or 5.9%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $85.9 million, or 98.8%, partially offset by a $13.3 million, or 6.7%, decrease in Wholesale segment net sales.

The increase in our Retail segment net sales during the first nine months of fiscal 2024 was due to an increase of $151.8 million, or 5.0%, in Retail segment comparable net sales and an increase of $32.0 million in non-comparable net sales. Retail segment comparable net sales increased 22.5% at Free People and 12.4% at Anthropologie and decreased 13.9% at Urban Outfitters. Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by mid single-digit positive growth in both digital channel sales and retail store sales. The digital channel net sales increase was driven by increases in sessions and average order value, while conversion rate and units per transaction decreased. Comparable store net sales increased as a result of higher store traffic ~~transactions~~ and average unit retail price, which were partially offset by ~~a decrease~~decreases in units per transaction, conversion rate and ~~units per transaction.~~transactions. The ~~decrease~~increase in non-comparable net sales during the ~~third quarter~~first nine months of fiscal ~~2023~~2024 was primarily due to the ~~negative~~ impact of ~~foreign currency translation of approximately 200 basis points, partially offset by~~ the 5129 net new Company-owned stores and restaurants opened ~~and 16 Company-owned stores and restaurants closed~~ since the prior comparable ~~period.~~period and the positive impact of foreign currency translation.

The increase in Nuuly segment net sales was primarily driven by a 68% increase in our number of subscribers compared to the prior year's comparable period. The decrease in Wholesale segment net sales in the ~~third quarter~~first nine months of fiscal ~~2023,~~2024, as compared to the ~~third quarter~~first nine months of fiscal ~~2022,~~2023, was ~~primarily~~ due to a ~~$2.6~~$14.8 million, or ~~3.8%~~8.1%, decrease in ~~sales for the~~ Free People ~~Group,~~wholesale sales, partially offset by ana $1.5 million increase in Urban Outfitters wholesale sales. The Free People ~~Group~~ wholesale sales decrease was primarily due to a decrease in sales to department stores, partially offset by an increase in sales to specialty accounts. The increase in Nuuly segment net sales was due to a 185% increase in our subscribers during the third quarter of fiscal 2023 as compared to the third quarter of fiscal 2022.

Gross profit percentage for the third quarter of fiscal 2023 decreased to 30.4% of net sales, from 34.5% of net sales in the third quarter of fiscal 2022. Gross profit decreased to $357.0 million in the third quarter of fiscal 2023 from $390.7 million in the third quarter of fiscal 2022. The decrease in gross profit rate and dollars was primarily due to higher markdowns at all three brands as compared to record low markdown rates in the comparable prior year quarter, with the Urban Outfitters brand experiencing the largest year-over-year decline primarily due to elevated inventory levels and macroeconomic trends.

Total inventory at October 31, 2022, as compared to October 31, 2021, increased by $116.5 million, or 18.6%, to $743.6 million. Retail segment inventory increased by 17.0% driven by higher costs, earlier than planned receipts due to improved timing of supply chain deliveries and excess inventory of slower selling product in certain categories. Wholesale segment inventory increased by 38.7% due to softness in department store sales.

Selling, general and administrative expenses increased by $24.9 million, or 9.1%, in the third quarter of fiscal 2023, compared to the third quarter of fiscal 2022. Selling, general and administrative expenses as a percentage of net sales increased in the third quarter of fiscal 2023 to 25.5% of net sales, compared to 24.3% of net sales for the third quarter of fiscal 2022. The increase in rate as a percentage of net sales and increase in selling, general and administrative dollars was primarily related to increased store payroll expenses incurred due to increased store associate hours to support increased customer traffic and higher average wages in order to attract and retain employees, as well as marketing expenses to support increased sales and customer growth.

Income from operations was 4.9% of net sales, or $57.3 million, for the third quarter of fiscal 2023 compared to 10.2% of net sales, or $115.9 million, for the third quarter of fiscal 2022. The decrease in dollars and rate was primarily due to lower gross profit.

Our effective tax rate for the third quarter of fiscal 2023 was 28.8% compared to 23.0% in the third quarter of fiscal 2022. The change in effective tax rate for the three months ended October 31, 2022, was attributable to the ratio of foreign taxable earnings to global taxable earnings, tax rate law changes and the prior year favorable impact of equity activity.

~~Nine Months Ended October 31, 2022 (Fiscal 2023) Compared To~~

~~Nine Months Ended October 31, 2021 (Fiscal 2022)~~

(amounts in millions)
Nine Months Ended

October 31,

2022

2021
Net sales
$
3,410.7

100.0

%

$
3,216.6

100.0

%
Cost of sales (excluding store impairment)

2,354.8

69.1

2,089.9

65.0

Store impairment

1.0

0.0

—

—

Gross profit

1,054.9

30.9

1,126.7

35.0

Selling, general and administrative expenses

865.5

25.3

771.4

24.0

Income from operations

189.4

5.6

355.3

11.0

Other loss, net

(9.3
)

(0.3
)

(2.5
)

(0.0)

Income before income taxes

180.1

5.3

352.8

11.0

Income tax expense

51.9

1.5

83.1

2.6

Net income
$
128.2

3.8

%

$
269.7

8.4

%

Net sales for the nine months ended October 31, 2022 were $3.41 billion, compared to $3.22 billion in the comparable period of fiscal 2022. The $194.1 million increase was attributable to a $135.7 million, or 4.5%, increase in Retail segment net sales, an increase in Nuuly segment net sales of $56.5 million, or 185.4%, and a $1.9 million, or 1.0%, increase in Wholesale segment net sales. Retail segment net sales for the nine months ended October 31, 2022 accounted for 91.7% of total net sales compared to 93.0% of total net sales in the nine months ended October 31, 2021.

The increase in our Retail segment net sales during the first nine months of fiscal 2023 was due to an increase of $136.6 million, or 4.8%, in Retail segment comparable net sales, partially offset by a decrease of $0.9 million in

non-comparable net sales. Retail segment comparable net sales increased 12.5% at the Anthropologie Group and 9.9% at the Free People Group and decreased 6.0% at Urban Outfitters. Retail segment comparable net sales increased in both North America and Europe. The relative proportion of Retail segment sales attributable to store and digital channels changed due in large part to the temporary global store closures and occupancy restrictions in the first nine months of the prior year due to the COVID-19 pandemic. With those restrictions lifted in the current year, Retail segment comparable sales increased due to double-digit growth in retail store sales driven by higher traffic and transactions as well as an increase in average unit selling price, partially offset by a decrease in units per transaction and a decrease in conversion rate. Digital channel net sales were flat as an increase in average order value was offset by decreases in sessions, units per transaction and conversion rate. The decrease in non-comparable net sales during the first nine months of fiscal 2023 was primarily due to the negative impact of foreign currency translation of approximately 140 basis points, partially offset by the 79 new Company-owned stores and restaurants opened and 22 Company-owned stores and restaurants closed since the prior comparable period.

The increase in Wholesale segment net sales in the first nine months of fiscal 2023, as compared to the first nine months of fiscal 2022, was primarily due to a $4.1 million, or 2.3%, increase in sales for the Free People Group, which was primarily driven by an increase in sales to specialty accounts, partially offset by a decline in Urban Outfitters wholesale sales. The increase in Nuuly segment net sales was due to a 200% increase in our subscribers during the first nine months of fiscal 2023 as compared to the first nine months of fiscal 2022.stores.

Gross profit percentage for the first nine months of fiscal ~~2023 decreased~~2024 increased to ~~30.9%~~34.9% of net sales from ~~35.0%~~30.9% of net sales in the comparable period inof fiscal ~~2022.~~2023. Gross profit ~~decreased~~increased to ~~$1,054.9 million for~~$1.28 billion in the first nine months of fiscal ~~2023~~2024 from ~~$1,126.7 million~~$1.05 billion in the comparable period inof fiscal ~~2022.~~2023. The ~~decrease~~increase in gross profit rate ~~and dollars~~ was primarily due to higher ~~markdowns at all three brands as compared to record low markdown rates in the comparable prior year period, as well as lower~~ initial merchandise markups and lower merchandise markdowns in the Retail segment at Anthropologie, Free People and Urban Outfitters. The improvement in initial merchandise markups was primarily driven ~~largely~~ by ~~higher~~lower inbound transportation ~~expenses.~~costs. The increase in gross profit dollars was due to the improved gross profit rate and higher net sales.

Selling, general and administrative expenses increased by ~~$94.1~~$103.2 million, or ~~12.2%~~11.9%, ~~to $865.5 million~~ in the first nine months of fiscal ~~2023,~~2024, compared to the comparable period inof fiscal ~~2022.~~2023. Selling, general and administrative expenses as a percentage of net sales increased in the first nine months of fiscal ~~2023~~2024 to ~~25.3%~~26.4% of net sales, compared to ~~24.0%~~25.3% of net sales for the comparable period inof fiscal ~~2022.~~2023. The ~~increase in rate as a percentage of net sales and increase~~deleverage in selling, general and administrative ~~dollars~~expenses as a rate to sales was primarily related to increased marketing and creative expenses to support increased sales and customer growth and higher incentive-based compensation costs due to improved Company performance. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing and creative expenses to support increased sales and customer growth, increased store payroll expenses to support retail store comparable net sales growth and the net growth in ~~the nine months ended October 31, 2022, along with increased~~retail store ~~associate hours to support increased customer traffic~~count and higher ~~average wages in order~~incentive-based compensation costs due to ~~attract and retain employees. Additionally, marketing expenses increased to support sales and customer growth.~~improved Company performance.

Income from operations was 8.5% of net sales, or $312.5 million, for the first nine months of fiscal 2024 compared to 5.6% of net sales, or $189.4 million, for the first nine months of fiscal ~~2023 compared to 11.0%, or $355.3 million, for the first nine months of fiscal 2022.~~2023. The ~~decrease~~increase in ~~dollars~~operating income was primarily ~~due to~~driven by the increase in ~~selling, general and administrative expenses and~~ gross ~~margin impact noted above.~~profit. The ~~decrease~~increase in operating income rate was primarily due to ~~lower~~the higher gross profit ~~rate and deleverage in selling, general and administrative expenses during the first nine months of fiscal 2023.~~rate.

Our effective tax rate for the first nine months of fiscal ~~2023~~2024 was ~~28.8%~~24.5% compared to ~~23.6%~~28.8% in the first nine months of fiscal ~~2022.~~2023. The ~~increase~~change in effective tax rate for the nine months ended October 31, ~~2022~~2023 was attributable to the ratio of foreign taxable earnings to global taxable earnings ~~tax rate law changes~~ and the ~~prior year~~ favorable impact of ~~equity activity.~~general business credits in the current year.

2826

Liquidity and Capital Resources

The following tables set forth certain balance sheet and cash flow data for the periods indicated. These tables should be read in the conjunction with the discussion that follows:


(amounts in millions)
	October 31,		January 31,		October 31,		October 31,		January 31,		October 31,
	2022		2022		2021		2023		2023		2022
Cash, cash equivalents and marketable securities	$	389.0	$	669.6	$	694.5	$	588.4	$	485.5	$	389.0
Working capital		336.6		304.3		320.3		440.1		347.3		336.6

Nine Months Ended

October 31,

2022

2021

Net cash (used in) provided by operating activities

$
(6.2
)

$
222.3

Net cash provided by (used in) investing activities

65.3

(363.4
)
Net cash used in financing activities

(118.3
)

(19.8
)


	Nine Months Ended
	October 31,
	2023			2022
Net cash provided by (used in) operating activities	$	280.2		$	(6.2	)
Net cash (used in) provided by investing activities		(263.7	)		65.3
Net cash used in financing activities		(10.8	)		(118.3	)

The increase in working capital as of October 31, ~~2022,~~2023, as compared to January 31, ~~2022~~2023, was primarily due to the seasonal increase in inventory and an increase in cash, cash equivalents and marketable securities, partially offset by the timing of disbursements. The increase in working capital as of October 31, ~~2021,~~2023, as compared to October 31, 2022, was primarily due to the increase in ~~inventory~~cash, cash equivalents and ~~the timing of disbursements,~~marketable securities, partially offset by the ~~net decrease in cash, cash equivalents and current marketable securities.~~timing of disbursements.

During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating activities ~~and additionally, in the first nine months of fiscal 2023,~~and/or through the ~~sale~~sales and maturities of marketable securities. Our primary uses of cash have been to fund business operations, purchase inventory and rental product, expand and improve our fulfillment centers, open new stores and repurchase our common shares.

Cash Flows from Operating Activities

Our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. ~~Cash~~The change in cash provided by operating activities in the first nine months of fiscal 2024 compared to cash used in operating activities in the first nine months of fiscal 2023 ~~compared to cash provided by operating activities in the first nine months of 2022~~ was primarily due to ~~lower~~higher net income, the timing of disbursements and ~~an investment in additional Nuuly rental product to support the growth~~lower inventory purchases in the ~~business.~~first nine months of fiscal 2024.

Cash Flows from Investing Activities

Cash used in investing activities in the first nine months of fiscal 2024 primarily related to purchases of marketable securities, property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash provided by investing activities in the first nine months of fiscal 2023 primarily related to the sales and maturities of marketable securities, partially offset by ~~the~~ purchases of property and equipment and marketable securities. Cash used in investing activities in the first nine months of fiscal 2022 primarily related to purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities. Cash paid for property and equipment in the first nine months of fiscal 2024 and 2023 ~~and 2022~~ was ~~$143.4~~$151.0 million and ~~$159.0~~$143.4 million, respectively, which was primarily used to expand our fulfillment center network and store base in both periods.

Cash Flows from Financing Activities

Cash used in financing activities in the first nine months of fiscal 2024 primarily related to repurchases of our common shares from employees to meet payroll tax withholding requirements on vested share-based awards. Cash used in financing activities in the first nine months of fiscal 2023 ~~and 2022~~ primarily related to repurchases of our common shares under our share repurchase programs and from employees to meet payroll tax withholding requirements on vested share-based awards.

2927

Credit Facilities

See Note 6,5, “Debt,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s debt.

Capital and Operating Expenditures

During fiscal ~~2023,~~2024, we plan to ~~substantially complete construction on a new omni-channel fulfillment center in Kansas City, Kansas (which we expect to be fully operational in fiscal 2024),~~ open approximately 3327 new Company-owned retail locations, expand or relocate certain existing retail locations, increase capacity at our Bristol, Pennsylvania Nuuly fulfillment center and invest in a new Nuuly fulfillment center in Raymore, Missouri in response to ~~the~~ growth in the number of Nuuly subscribers, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales, upgrade our systems, improve and expand our digital capabilities and invest in omni-channel marketing when ~~appropriate and~~appropriate. We may also repurchase common shares. Additionally, we completed construction on our new omni-channel fulfillment center in Kansas City, Kansas in fiscal 2024. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our ~~sales. During fiscal 2023, we~~sales growth and plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal ~~2023~~2024 to be approximately ~~$225~~$235 million, primarily to support new and expanded fulfillment and distribution centers and new store openings. All fiscal ~~2023~~2024 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash ~~equivalents and sales and maturities of marketable securities.~~equivalents. We believe that our new store investments generally have the potential to generate positive cash flow within a year. We may also enter into one or more acquisitions or transactions related to the expansion of our brand offerings, including additional franchise and joint venture agreements. We believe that our existing cash and cash equivalents, availability under our current credit facilities and future cash flows provided by operations will be sufficient to fund these initiatives.

Share Repurchases

See Note 9,8, “Shareholders’ Equity,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s share repurchases.

Other Matters

See Note 1, “Basis of Presentation,” Recent Accounting Pronouncements, of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our quantitative or qualitative disclosures found in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2022.~~2023.

3028

Item 4. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in our Securities Exchange Act of 1934 reports is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of these disclosure controls and procedures. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that our disclosure controls and procedures were effective.

There have been no changes in our internal controls over financial reporting during the three months ended October 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

3129

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

We are party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A.Risk Factors

There have been no material changes in our risk factors since January 31, ~~2022.~~2023. Please refer to our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2022,~~2023, filed with the SEC on April ~~1, 2022,~~3, 2023, for our risk factors.

32Item 5. Other Information

On October 12, 2023, Harry S. Cherken, Jr., a director of the Company, adopted a Rule 10b5-1 trading arrangement for the sale of up to 20,000 common shares of the Company from January 12, 2024 through March 1, 2024 that was intended to satisfy the affirmative defense of Rule 10b5-1(c). On October 31, 2023, Mr. Cherkenterminated that arrangement and his Rule 10b5-1 trading arrangement adopted on July 7, 2023 with respect to the sale of up to 80,000 common shares of the Company through March 1, 2024.

Item 6. Exhibits


Exhibit Number		Description

3.1		Amended and Restated Articles of Incorporation are incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.2		Amendment No. 1 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.3		Amendment No. 2 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (file no 000-22754) filed on May 31, 2013.

3.4		Amended and Restated By-laws are incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (file no 000-22754) filed on March 30, 2020.

31.1*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer.

32.1**		Section 1350 Certification of the Principal Executive Officer.

32.2**		Section 1350 Certification of the Principal Financial Officer.

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

Attached as Exhibits 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended October 31, ~~2022,~~2023, filed with the Securities and Exchange Commission on December ~~12, 2022,~~11, 2023, formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Shareholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

3331

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		URBAN OUTFITTERS, INC.

Date: December ~~12, 2022~~11, 2023	By:		/s/ RICHARD A. HAYNE
			Richard A. Hayne
			Chief Executive Officer


		URBAN OUTFITTERS, INC.

Date: December ~~12, 2022~~11, 2023	By:		/s/ MELANIE MAREIN-EFRON
			Melanie Marein-Efron
			Chief Financial Officer

3432


	Operating
	Leases
Fiscal Year
2023 (excluding the nine months ended October 31, 2022)	$	76,404
2024		272,593
2025		238,771
2026		202,448
2027		148,319
Thereafter		440,004
Total undiscounted future minimum lease payments		1,378,539
Less imputed interest		(293,128	)
Total discounted future minimum lease payments	$	1,085,411