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~~

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

For the Quarterly Period Ended ~~October~~July 31, ~~2017~~2023

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

☐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)~~ (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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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	☐ ~~(Do not check if a smaller reporting company)~~	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—~~108,248,471~~92,774,395 shares outstanding on ~~December~~September 5, ~~2017.~~2023.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION


Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of ~~October~~July 31, ~~2017,~~2023, January 31, ~~2017~~2023 and ~~October~~July 31, ~~2016~~2022	1

	Condensed Consolidated Statements of Income for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016~~2022	2

	Condensed Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016~~2022	3

	Condensed Consolidated ~~Statement~~Statements of Shareholders’ Equity for the ~~nine~~three and six months ended ~~October~~July 31, ~~2017~~2023 and 2022	4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016~~2022	56

	Notes to Condensed Consolidated Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1720

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2429

Item 4.	Controls and Procedures	2430

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	2531

Item 1A.	Risk Factors	2531

Item 2.5.	~~Unregistered Sales of Equity Securities and the Use of Proceeds~~Other Information	2531

Item 6.	Exhibits	2632

	Signatures	2733

PART I

FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements~~

Item 1. Financial Statements

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(unaudited)


	October 31,			January 31,			October 31,			July 31,			January 31,			July 31,
	2017			2017			2016			2023			2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	234,726		$	248,140		$	234,886		$	224,744		$	201,260		$	91,665
Marketable securities		93,228			111,067			24,644			250,832			181,378			160,020
Accounts receivable, net of allowance for doubtful accounts of $710, $588 and $568, respectively		78,348			54,505			68,896
Accounts receivable, net of allowance for doubtful accounts of $1,481, $1,496 and $1,201, respectively											79,118			70,339			97,374
Inventory		449,957			338,590			453,826			586,514			587,510			697,474
Prepaid expenses and other current assets		111,050			129,095			107,767			224,254			197,232			220,901
Total current assets		967,309			881,397			890,019			1,365,462			1,237,719			1,267,434
Property and equipment, net		829,106			867,786			872,309			1,222,343			1,187,735			1,150,247
Operating lease right-of-use assets											961,458			959,436			927,685
Marketable securities		41,254			44,288			5,605			122,356			102,844			152,528
Deferred income taxes and other assets		115,778			109,166			117,258			298,317			195,178			155,538
Total Assets	$	1,953,447		$	1,902,637		$	1,885,191		$	3,969,936		$	3,682,912		$	3,653,432
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	208,567		$	119,537		$	199,421		$	270,464		$	257,620		$	347,805
Current portion of operating lease liabilities											227,669			232,672			222,430
Accrued expenses, accrued compensation and other current liabilities		214,506			233,391			205,812			459,343			400,082			396,650
Total current liabilities		423,073			352,928			405,233			957,476			890,374			966,885
Long-term debt		—			—			—
Non-current portion of operating lease liabilities											882,841			884,696			868,686
Deferred rent and other liabilities		245,566			236,625			232,325			162,228			115,159			110,669
Total Liabilities		668,639			589,553			637,558			2,002,545			1,890,229			1,946,240
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, 108,248,471, 116,233,781 and 116,233,584 shares issued and outstanding, respectively		11			12			12
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued											—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 92,773,249, 92,180,709 and 92,173,342 shares issued and outstanding, respectively											9			9			9
Additional paid-in-capital		—			—			—			23,214			15,248			—
Retained earnings		1,309,541			1,347,141			1,285,268			1,982,970			1,826,061			1,757,368
Accumulated other comprehensive loss		(24,744	)		(34,069	)		(37,647	)		(38,802	)		(48,635	)		(50,185	)
Total Shareholders’ Equity		1,284,808			1,313,084			1,247,633			1,967,391			1,792,683			1,707,192
Total Liabilities and Shareholders’ Equity	$	1,953,447		$	1,902,637		$	1,885,191		$	3,969,936		$	3,682,912		$	3,653,432

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					Six Months Ended
	October 31,					October 31,				July 31,					July 31,
	2017			2016		2017		2016		2023		2022			2023		2022
Net sales	$	892,774		$	862,491	$	2,526,895	$	2,515,636	$	1,272,195	$	1,183,388		$	2,385,869	$	2,235,322
Cost of sales		595,028			562,594		1,692,026		1,611,337		816,614		808,836			1,559,057		1,537,469
Gross profit		297,746			299,897		834,869		904,299		455,581		374,552			826,812		697,853
Selling, general and administrative expenses		224,858			229,592		665,765		665,299		323,483		288,734			623,331		565,798
Income from operations		72,888			70,305		169,104		239,000		132,098		85,818			203,481		132,055
Other (expense) income, net		(882	)		854		1,173		348
Other income (loss), net											3,399		(2,262	)		4,418		(4,251	)
Income before income taxes		72,006			71,159		170,277		239,348		135,497		83,556			207,899		127,804
Income tax expense		26,914			23,804		63,332		85,516		31,405		24,083			50,990		36,798
Net income	$	45,092		$	47,355	$	106,945	$	153,832	$	104,092	$	59,473		$	156,909	$	91,006
Net income per common share:
Basic	$	0.41		$	0.41	$	0.95	$	1.31	$	1.12	$	0.64		$	1.69	$	0.97
Diluted	$	0.41		$	0.40	$	0.94	$	1.31	$	1.10	$	0.64		$	1.67	$	0.96
Weighted-average common shares outstanding:
Basic		109,667,224			116,829,912		113,113,597		117,087,696		92,741,888		93,041,310			92,610,499		94,240,412
Diluted		110,100,254			117,393,710		113,432,367		117,453,005		94,228,185		93,648,214			94,026,950		94,977,505

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

October 31,

October 31,

2017

2016

2017

2016

Net income

$
45,092

$
47,355

$
106,945

$
153,832

Other comprehensive (loss) income:

Foreign currency translation

(1,388
)

(10,665
)

9,342

(14,141
)
Change in unrealized losses on marketable
securities, net of tax

(13
)

(55
)

(17
)

(55
)
Total other comprehensive (loss) income

(1,401
)

(10,720
)

9,325

(14,196
)
Comprehensive income

$
43,691

$
36,635

$
116,270

$
139,636


	Three Months Ended					Six Months Ended
	July 31,					July 31,
	2023		2022			2023		2022
Net income	$	104,092	$	59,473		$	156,909	$	91,006
Other comprehensive income (loss):
Foreign currency translation		4,515		(6,243	)		7,692		(20,632	)
Change in unrealized gains (losses) on marketable securities, net of tax		21		654			2,141		(4,723	)
Total other comprehensive income (loss)		4,536		(5,589	)		9,833		(25,355	)
Comprehensive income	$	108,628	$	53,884		$	166,742	$	65,651

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~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, 2017

116,233,781

$
12

$
—

$
1,347,141

$
(34,069
)

$
1,313,084

Comprehensive income

—

—

—

106,945

9,325

116,270

Share-based compensation

—

—

13,831

—

—

13,831

Stock options and awards

200,000

—

—

—

—

—

Cumulative effect of change in
accounting pronouncement

—

—

1,607

(760
)

—

847

Share repurchases

(8,185,310
)

(1
)

(15,438
)

(143,785
)

—

(159,224
)
Balances as of October 31, 2017

108,248,471

$
11

$
—

$
1,309,541

$
(24,744
)

$
1,284,808


											Accumulated
	Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total
Balances as of April 30, 2023		92,677,835		$	9	$	15,133		$	1,878,878	$	(43,338	)	$	1,850,682
Comprehensive income		—			—		—			104,092		4,536			108,628
Share-based compensation		—			—		7,821			—		—			7,821
Share-based awards		105,731			—		594			—		—			594
Share repurchases		(10,317	)		—		(334	)		—		—			(334	)
Balances as of July 31, 2023		92,773,249		$	9	$	23,214		$	1,982,970	$	(38,802	)	$	1,967,391


												Accumulated
	Common Shares					Additional						Other
	Number of			Par		Paid-in			Retained			Comprehensive
	Shares			Value		Capital			Earnings			Loss			Total
Balances as of April 30, 2022		94,434,621		$	9	$	—		$	1,740,508		$	(44,596	)	$	1,695,921
Comprehensive income		—			—		—			59,473			(5,589	)		53,884
Share-based compensation		—			—		7,007			—			—			7,007
Share-based awards		54,532			—		376			—			—			376
Share repurchases		(2,315,811	)		—		(7,383	)		(42,613	)		—			(49,996	)
Balances as of July 31, 2022		92,173,342		$	9	$	—		$	1,757,368		$	(50,185	)	$	1,707,192

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~SHAREHOLDERS’ EQUITY

(amounts in ~~thousands)~~thousands, except share data)

(unaudited)

For the Nine Months Ended

October 31,

2017

2016

Cash flows from operating activities:

Net income

$
106,945

$
153,832

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation and amortization

96,966

101,181

Benefit for deferred income taxes

(4,771
)

(11,087
)
Share-based compensation expense

13,831

20,032

Loss on disposition of property and equipment, net

3,276

2,801

Changes in assets and liabilities:

Receivables

(23,567
)

6,261

Inventory

(109,258
)

(126,934
)
Prepaid expenses and other assets

2,815

(7,331
)
Payables, accrued expenses and other liabilities

83,411

90,592

Net cash provided by operating activities

169,648

229,347

Cash flows from investing activities:

Cash paid for property and equipment

(63,338
)

(112,069
)
Cash paid for marketable securities

(174,938
)

(152,340
)
Sales and maturities of marketable securities

209,937

218,400

Acquisition of business

—

(15,325
)
Net cash used in investing activities

(28,339
)

(61,334
)
Cash flows from financing activities:

Repayments of long-term debt

—

(150,000
)
Proceeds from the exercise of stock options

—

4,096

Share repurchases related to share repurchase program

(157,044
)

(45,787
)
Share repurchases related to taxes for share-based awards

(2,180
)

(2,049
)
Net cash used in financing activities

(159,224
)

(193,740
)
Effect of exchange rate changes on cash and cash equivalents

4,501

(4,663
)
Decrease in cash and cash equivalents

(13,414
)

(30,390
)
Cash and cash equivalents at beginning of period

248,140

265,276

Cash and cash equivalents at end of period

$
234,726

$
234,886

Supplemental cash flow information:

Cash paid during the year for:

Income taxes

$
61,119

$
85,179

Non-cash investing activities—Accrued capital expenditures

$
8,560

$
16,012


											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		—			—		—			156,909		9,833			166,742
Share-based compensation		—			—		15,556			—		—			15,556
Share-based awards		896,119			—		594			—		—			594
Share repurchases		(303,579	)		—		(8,184	)		—		—			(8,184	)
Balances as of July 31, 2023		92,773,249		$	9	$	23,214		$	1,982,970	$	(38,802	)	$	1,967,391


													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		—			—			—			91,006			(25,355	)		65,651
Share-based compensation		—			—			14,109			—			—			14,109
Share-based awards		724,215			—			376			—			—			376
Share repurchases		(4,981,917	)		(1	)		(14,485	)		(104,198	)		—			(118,684	)
Balances as of July 31, 2022		92,173,342		$	9		$	—		$	1,757,368		$	(50,185	)	$	1,707,192

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)


	Six Months Ended
	July 31,
	2023			2022
Cash flows from operating activities:
Net income	$	156,909		$	91,006
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		47,471			52,383
Non-cash lease expense		101,277			94,821
Provision for deferred income taxes		526			6,136
Share-based compensation expense		15,556			14,109
Amortization of tax credit investment		7,953			—
Loss on disposition of property and equipment, net		146			284
Changes in assets and liabilities:
Receivables		(8,160	)		(34,607	)
Inventory		3,299			(134,092	)
Prepaid expenses and other assets		(48,256	)		(36,593	)
Payables, accrued expenses and other liabilities		54,573			37,088
Operating lease liabilities		(120,047	)		(122,198	)
Net cash provided by (used in) operating activities		211,247			(31,663	)
Cash flows from investing activities:
Cash paid for property and equipment		(78,517	)		(105,652	)
Cash paid for marketable securities		(229,446	)		(22,973	)
Sales and maturities of marketable securities		149,921			164,314
Initial cash payment for tax credit investment		(20,000	)		—
Net cash (used in) provided by investing activities		(178,042	)		35,689
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		(8,184	)		(6,668	)
Tax credit investment liability payments		(1,724	)		—
Net cash used in financing activities		(9,314	)		(118,308	)
Effect of exchange rate changes on cash and cash equivalents		(407	)		(628	)
Increase (decrease) in cash and cash equivalents		23,484			(114,910	)
Cash and cash equivalents at beginning of period		201,260			206,575
Cash and cash equivalents at end of period	$	224,744		$	91,665
Supplemental cash flow information:
Cash paid during the year for income taxes	$	24,801		$	21,532
Non-cash investing activities—Accrued capital expenditures	$	16,011		$	21,960
Right-of-use assets obtained in exchange for operating lease liabilities	$	113,184		$	45,509
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, ~~2017,~~2023, filed with the United States Securities and Exchange Commission on April 3, ~~2017.~~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~~six months ended ~~October~~July 31, ~~2017~~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 ~~2018~~2024 will end on January 31, ~~2018.~~2024.

2. Recent Accounting Pronouncements

~~Recently Adopted~~

~~In March 2016,~~The Company has considered all new accounting standards updates issued by the Financial Accounting Standards Board (“FASB”) ~~issued an accounting standards update that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures,~~ and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the new guidance on February 1, 2017 and recorded a cumulative effect reduction to beginning retained earnings of $(984) related to the Company’s election to record forfeitures as they occur and $224 related to the recognition of previously unrecognized excess tax benefits. In addition, the Company elected to retrospectively adopt the provision regarding the presentation of excess tax benefits (deficits) in the statement of cash flows, which resulted in an increase in net cash provided by operating activities and a decrease in net cash used in financing activities of $333 for the nine months ended October 31, 2016. The provision requiring the inclusion of excess tax benefits (deficits) as a component of the provision for income taxes in the consolidated results of operations has been applied prospectively. The Company recorded excess tax deficits of $3,072 during the nine months ended October 31, 2017.

~~Recently Issued~~

In October 2016, the FASB issued an accounting standards update that amends the existing guidance on the income tax effects of intra-entity asset transfers with the exception of transfers of inventory. The update requires the recognition of tax expense when an intra-entity asset transfer occurs as opposed to being deferred under the existing guidance. The Company will adopt the new guidance effective February 1, 2018 using the modified retrospective approach. The net cumulative effect of this change will be recognized as an increase to retained earnings as of January 31, 2018, which will not be material.

In June 2016, the FASB issued an accounting standards update that introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. This includes loan commitments, accounts receivable, trade receivables, and certain off-balance sheet credit exposures. The guidance also modifies the impairment model for available-for-sale debt securities. The update will be effective for the

Company on February 1, 2020 and early adoption is permitted. The Company is currently assessing the potential effects this update may have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued an accounting standards update that amends the existing accounting standards for lease accounting. This update requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of 12 months or less. The update will be effective for the Company on February 1, 2019 and early adoption is permitted. The update requires a modified retrospective transition approach, which includes a number of practical expedients. While the Company expects adoption to result in a significant increase in the assets and liabilities recorded on its balance sheet, the Company is currently assessing the overall impact on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue from contracts with customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Entities are required to apply the following steps when recognizing revenue under the update: (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The update allows for a “full retrospective” adoption, meaning the update is applied to all periods presented, or a “modified retrospective” adoption, meaning the update is applied only to the most current periods presented in the financial statements. In August 2015, the FASB issued an accounting standards update which approved a one-year deferral of the effective date that allows the Company to defer the effective date to February 1, 2018, but still permits the Company to adopt the update as of the original February 1, 2017 effective date. The Company has determined it will adopt this update on February 1, 2018 using the modified retrospective approach. The Company expects adoption to result in a change in the timing of recognizing breakage income related to its gift cards and in recognizing estimated sales returns on a gross basis on its balance sheet. The Company has concluded that ~~the effects of this update~~there are no recent accounting standard updates that will ~~not~~ have a material impact on its consolidated financial statements and related disclosures.

~~3. Acquisition~~2. Revenue from Contracts with Customers

~~On February 1, 2016,~~Contract receivables occur when the Company ~~acquired certain assets~~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 six month period ended July 31, 2023, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $70,339 and $79,118, respectively. For the six month period ended July 31, 2022, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $63,760 and $97,374, 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 six month period ended July 31, 2023, the opening and closing balances of contract liabilities were $82,867 and $73,065, respectively. For the six month period ended July 31, 2022, the opening and closing balances of contract liabilities were $78,717 and $70,369, respectively. Contract liabilities are included in “Accrued expenses, accrued compensation and other current liabilities” in the Condensed Consolidated Balance Sheets. During the six month period ended July 31, 2023, the Company recognized $27,085 of revenue that was included in the contract liability balance at the beginning of the ~~Vetri Family group~~period. During the six month period ended July 31, 2022, the Company recognized $27,009 of ~~restaurants, headquartered~~revenue that was included in ~~Philadelphia, PA, for a total aggregate purchase price~~the contract liability balance at the beginning of ~~approximately $18,937, of which $15,325 was paid in cash, $2,687 was satisfied through~~ the settlement of a note receivable and $925 was settled in fiscal 2018. No liabilities were assumed. Pro forma information related to this acquisition is not included because the impact on the Company’s Condensed Consolidated Statements of Income is not considered to be material.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~~July 31, ~~2017,~~2023, January 31, ~~2017~~2023 and ~~October~~July 31, ~~2016~~2022 were as follows:


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
As of July 31, 2023
Short-term Investments:
Corporate bonds	$	96,902	$	1	$	(1,239	)	$	95,664
Federal government agencies		47,287		—		(163	)		47,124
Municipal and pre-refunded municipal bonds		48,350		—		(670	)		47,680
Commercial paper		41,719		—		—			41,719
US Treasury securities		18,661		—		(16	)		18,645
		252,919		1		(2,088	)		250,832
Long-term Investments:
Corporate bonds		47,835		—		(1,745	)		46,090
Federal government agencies		44,914		—		(464	)		44,450
Municipal and pre-refunded municipal bonds		13,980		—		(469	)		13,511
US Treasury securities		2,969		—		(61	)		2,908
Mutual funds, held in rabbi trust		12,941		1,027		(70	)		13,898
Certificates of deposit		1,499		—		—			1,499
		124,138		1,027		(2,809	)		122,356
	$	377,057	$	1,028	$	(4,897	)	$	373,188
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		23,561		1		(10	)		23,552
		183,023		1		(1,646	)		181,378
Long-term Investments:
Corporate bonds		62,594		22		(3,319	)		59,297
Federal government agencies		9,021		13		(2	)		9,032
Municipal and pre-refunded municipal bonds		23,437		5		(1,154	)		22,288
Mutual funds, held in rabbi trust		13,402		—		(1,424	)		11,978
Certificates of deposit		249		—		—			249
		108,703		40		(5,899	)		102,844
	$	291,726	$	41	$	(7,545	)	$	284,222

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

(Losses)

Value

As of October 31, 2017

Short-term Investments:

Corporate bonds

$
67,275

$
2

$
(71
)

$
67,206

Municipal and pre-refunded municipal bonds

24,676

4

(14
)

24,666

Certificates of deposit

1,356

—

—

1,356

93,307

6

(85
)

93,228

Long-term Investments:

Corporate bonds

30,051

2

(87
)

29,966

Municipal and pre-refunded municipal bonds

1,362

—

(2
)

1,360

Mutual funds, held in rabbi trust

5,639

109

(2
)

5,746

Certificates of deposit

4,182

—

—

4,182

41,234

111

(91
)

41,254

$
134,541

$
117

$
(176
)

$
134,482

As of January 31, 2017

Short-term Investments:

Corporate bonds

$
59,403

$
7

$
(90
)

$
59,320

Municipal and pre-refunded municipal bonds

51,731

28

(12
)

51,747

111,134

35

(102
)

111,067

Long-term Investments:

Corporate bonds

19,102

9

(33
)

19,078

Municipal and pre-refunded municipal bonds

19,488

35

(9
)

19,514

Mutual funds, held in rabbi trust

4,583

91

(1
)

4,673

Certificates of deposit

1,023

—

—

1,023

44,196

135

(43
)

44,288

$
155,330

$
170

$
(145
)

$
155,355

As of October 31, 2016

Short-term Investments:

Corporate bonds

$
17,809

$
1

$
(19
)

$
17,791

Municipal and pre-refunded municipal bonds

6,859

—

(6
)

6,853

24,668

1

(25
)

24,644

Long-term Investments:

Corporate bonds

222

1

—

223

Municipal and pre-refunded municipal bonds

307

—

—

307

Mutual funds, held in rabbi trust

4,544

—

(97
)

4,447

Certificates of deposit

628

—

—

628

5,701

1

(97
)

5,605

$
30,369

$
2

$
(122
)

$
30,249


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
As of July 31, 2022
Short-term Investments:
Corporate bonds	$	76,652	$	—	$	(1,211	)	$	75,441
Municipal and pre-refunded municipal bonds		75,518		—		(595	)		74,923
US Treasury securities		9,749		—		(93	)		9,656
		161,919		—		(1,899	)		160,020
Long-term Investments:
Corporate bonds		96,086		—		(4,160	)		91,926
Federal government agencies		350		—		(12	)		338
Municipal and pre-refunded municipal bonds		47,437		—		(1,858	)		45,579
US Treasury securities		3,229		—		(129	)		3,100
Mutual funds, held in rabbi trust		12,361		—		(1,025	)		11,336
Certificates of deposit		249		—		—			249
		159,712		—		(7,184	)		152,528
	$	321,631	$	—	$	(9,083	)	$	312,548

Proceeds from the sales and maturities of available-for-sale securities were ~~$209,937~~$149,921 and ~~$218,400~~$164,314 for the ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016,~~2022, respectively. The Company included in “Other ~~(expense)~~ income (loss), net,” in the Condensed Consolidated Statements of Income, a net realized ~~losses~~loss of $2$7 and ~~$11~~$6 for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, respectively, and a net realized ~~losses~~loss of ~~$96~~$222 and ~~$74~~$334 for the three and ~~nine~~six months ended ~~October~~July 31, ~~2016,~~2022, respectively. Amortization of discounts and premiums, net, ~~resulted in a reduction of “Other (expense) income, net” of $538~~was $894 and ~~$2,066~~$1,172 for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, respectively, and ~~$550~~$1,225 and ~~$1,711~~$2,882 for the three and ~~nine~~six months ended ~~October~~July 31, ~~2016,~~2022, respectively. Amortization of discounts and premiums, net, is included in “Other 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 ~~(expense)~~ 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.

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

October 31, 2017

Level 1

Level 2

Level 3

Total

Assets:

Corporate bonds

$
97,172

$
—

$
—

$
97,172

Municipal and pre-refunded
municipal bonds

—

26,026

—

26,026

Mutual funds, held in rabbi trust

5,746

—

—

5,746

Certificates of deposit

—

5,538

—

5,538

$
102,918

$
31,564

$
—

$
134,482


	Marketable Securities Fair Value as of
	July 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	—	$	141,754	$	—	$	141,754
Federal government agencies		—		91,574		—		91,574
Municipal and pre-refunded municipal bonds		—		61,191		—		61,191
Commercial paper		—		41,719		—		41,719
US Treasury securities		—		21,553		—		21,553
Mutual funds, held in rabbi trust		13,898		—		—		13,898
Certificates of deposit		—		1,499		—		1,499
	$	13,898	$	359,290	$	—	$	373,188


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


	Marketable Securities Fair Value as of
	July 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	—	$	167,367	$	—	$	167,367
Federal government agencies				338		—		338
Municipal and pre-refunded municipal bonds		—		120,502		—		120,502
US Treasury securities		—		12,756		—		12,756
Mutual funds, held in rabbi trust		11,336		—		—		11,336
Certificates of deposit		—		249		—		249
	$	11,336	$	301,212	$	—	$	312,548

Marketable Securities Fair Value as of

January 31, 2017

Level 1

Level 2

Level 3

Total

Assets:

Corporate bonds

$
78,398

$
—

$
—

$
78,398

Municipal and pre-refunded
municipal bonds

—

71,261

—

71,261

Mutual funds, held in rabbi trust

4,673

—

—

4,673

Certificates of deposit

—

1,023

—

1,023

$
83,071

$
72,284

$
—

$
155,355

Marketable Securities Fair Value as of

October 31, 2016

Level 1

Level 2

Level 3

Total

Assets:

Corporate bonds

$
18,014

$
—

$
—

$
18,014

Municipal and pre-refunded
municipal bonds

—

7,160

—

7,160

Mutual funds, held in rabbi trust

4,447

—

—

4,447

Certificates of deposit

—

628

—

628

$
22,461

$
7,788

$
—

$
30,249

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~~July 31, ~~2017,~~2023, January 31, ~~2017~~2023 and ~~October~~July 31, ~~2016.~~2022.

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~~July 31, ~~2017~~2023, January 31, 2023 and ~~2016,~~July 31, 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. ~~The fair value of debt approximates its carrying value as it is all variable rate debt.~~

Non-financial assets

The Company’s non-financial assets, primarily consisting of property and equipment and ~~goodwill,~~lease-related right-of-use assets are tested for impairment ~~annually and~~ 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 ~~stores~~retail locations are reviewed for impairment at the ~~store~~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 ~~store~~retail location is located. ~~Goodwill has been assigned to reporting units~~Right-of-use assets are tested for ~~purposes of~~ impairment ~~testing. The~~in the same manner as property and equipment. For lease right-of-use assets, the Company ~~evaluates goodwill to determine if~~determines the ~~carrying value exceeds the~~estimated fair value of the ~~reporting unit. For~~assets by comparing the ~~three and nine months ended October 31, 2017 and 2016, impairment charges were zero.~~discounted contractual rent payments to estimated market rent using an acceptable valuation methodology.

5. Debt

~~6. Debt~~

On ~~July 1, 2015,~~February 10, 2023, the Company and certain of its ~~domestic~~ subsidiaries entered into ~~a five-year~~the fourth amendment (the “Fourth Amendment”) to the Company’s amended and restated credit agreement (the “Amended Credit Agreement”), amending the Company’s asset-based revolving ~~Credit Agreement (“Credit Agreement”)~~credit facility with ~~certain~~its lenders, including JPMorgan Chase Bank, N.A., as administrative agent, joint lead arranger and ~~J.P. Morgan Securities LLC and~~co-book managers along with Wells Fargo Bank, National Association ~~as joint lead arrangers and co-book managers.~~

(the "Amended Credit Facility"). The Fourth Amendment permits the Company to purchase an equity membership interest in a federal low-income housing tax credit entity. See Note 6, "Tax Credit ~~Agreement~~Investment," for further discussion of the investment.

The Amended Credit Facility provides ~~senior secured revolving credit~~ for loans and letters of credit up to ~~$400,000 (the “Credit Facility”)~~$350,000, subject to a borrowing base that is comprised of the Company’s eligible accounts receivable and ~~inventory. The Credit Facility~~inventory and includes a swing-line sub-facility, a multicurrency sub-facility and the option to expand the facility by up to ~~$150,000. The funds available~~$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 ~~LIBOR,~~SOFR, CDOR, SONIA or EURIBOR plus an applicable margin ranging from ~~1.125%~~1.125% to ~~1.625%~~1.375%, or (ii) an adjusted ABR plus an applicable margin ranging from ~~0.125%~~0.125% to ~~0.625%~~0.375%, each such ~~rate~~applicable margin depending on the level of availability under the Amended Credit ~~Facility and the Company’s adjusted leverage ratio. Interest is payable either monthly or quarterly depending~~Facility. Depending on the type of ~~borrowing.~~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 based on the Company’s adjusted leverage ratio.~~Facility.

All obligations under the Amended Credit Facility are unconditionally guaranteed by the Company and certain of its ~~domestic~~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 ~~borrowers~~Company and ~~guarantors.~~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~~July 31, ~~2017,~~2023, the Company had $0 in borrowings under the Amended Credit Facility. As of July 31, 2023, the Company was in compliance with ~~all~~the terms of the Amended Credit Agreement and ~~borrowings under~~expects to remain in compliance with all terms, including covenants, of the Amended Credit ~~Facility totaled $0.~~Agreement. Outstanding stand-by letters of credit, which reduce the funds available under the Amended Credit Facility, were ~~$10,565.~~$13,637. Interest expense for the

~~Additionally,~~11

Amended Credit Facility was $483 and $511 for the six months ended July 31, 2023 and 2022, respectively, which was included in “Other income (loss), net” in the Condensed Consolidated Statements of Income.

6. Tax Credit Investment

On February 10, 2023, the Company ~~has borrowing agreements~~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 ~~two separate financial institutions under which~~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 ~~may borrow~~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 elected to use the 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 ~~aggregate~~estimated 10-year tax credit period beginning in the first quarter of ~~$130,000~~fiscal 2024. During the six months ended July 31, 2023, interest expense related to the accretion of the liability was $3,531 and a net benefit of $3,426 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 ~~purposes~~present value of ~~trade letter of credit issuances.~~ 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 ~~availability of any future borrowings under~~following table summarizes the ~~trade letter of credit facilities is subject~~balances related to ~~acceptance by~~ the ~~respective financial institutions. As of October~~investment at July 31, ~~2017, the Company had outstanding trade letters of credit of $69,223, and available trade letters of credit of $60,777 under these facilities.~~2023:


	July 31,
	2023
Deferred income taxes and other assets	$	74,167
Accrued expenses, accrued compensation and other current liabilities		5,308
Deferred rent and other liabilities		55,088

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”). A lattice binomial pricing model was used to estimate the fair values of stock options and SAR’s.~~rights. The fair value of ~~each~~PSUs and RSUs is equal to the stock price on the date of the ~~PSU’s was determined using a Monte Carlo simulation.~~ grant. Share-based compensation expense included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income, for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016~~2022, was as follows:

Three Months Ended

Nine Months Ended

October 31,

October 31,

2017

2016

2017

2016

Stock Options

$
216

$
245

$
673

$
757

Stock Appreciation Rights

24

60

125

179

Performance Stock Units ⁽¹⁾

(3,107
)

5,595

5,702

15,550

Restricted Stock Units

2,742

1,380

7,331

3,546

Total

$
(125
)

$
7,280

$
13,831

$
20,032

(1) Includes the reversal of $6,509 of previously recognized compensation expense in the three and nine months ended October 31, 2017, related to 476,611 PSU’s that will not vest as the achievement of the related performance targets is not probable.


	Three Months Ended				Six Months Ended
	July 31,				July 31,
	2023		2022		2023		2022
Performance Stock Units	$	1,231	$	1,280	$	2,551	$	2,417
Restricted Stock Units		6,590		5,727		13,005		11,692
Total	$	7,821	$	7,007	$	15,556	$	14,109

Share-based awards granted and the weighted-average fair value of such awards for the ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 was as follows:


	Six Months Ended
	July 31, 2023
			Weighted-
	Awards		Average Fair
	Granted		Value
Performance Stock Units		160,887	$	26.96
Restricted Stock Units		945,887	$	27.23
Total		1,106,774

Nine Months Ended

October 31, 2017

Weighted-

Awards

Average Fair

Granted

Value

Stock Options

160,000

$
5.37

Stock Appreciation Rights

—

$
—

Performance Stock Units

390,000

$
23.38

Restricted Stock Units

609,000

$
25.88

Total

1,159,000

During the ~~nine~~six months ended ~~October~~July 31, ~~2017, 200,000 PSU’s vested. No~~2023, 25,000 stock options ~~or SAR’s~~ were exercised, 131,248 PSUs vested and ~~no RSU’s vested during the nine months ended October 31, 2017.~~739,871 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~~July 31, ~~2017~~2023 was as follows:


	July 31, 2023
	Unrecognized		Weighted-
	Compensation		Average
	Cost		Years
Performance Stock Units	$	7,731		2.1
Restricted Stock Units		42,119		2.1
Total	$	49,850

October 31, 2017

Unrecognized

Weighted-

Compensation

Average

Cost

Years

Stock Options

$
503

0.6

Stock Appreciation Rights

21

0.3

Performance Stock Units

17,424

1.9

Restricted Stock Units

16,998

2.2

Total

$
34,946

8. Shareholders’ Equity

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


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	October 31,				October 31,				July 31,				July 31,
	2017		2016		2017		2016		2023		2022		2023		2022
Number of common shares repurchased and subsequently retired		3,083,201		1,000,000		8,092,906		1,324,700		—		2,314,347		—		4,736,405
Total cost	$	66,533	$	35,083	$	157,044	$	45,787	$	—	$	49,964	$	—	$	112,016
Average cost per share, including commissions	$	21.58	$	35.08	$	19.41	$	34.56	$	—	$	21.59	$	—	$	23.65

On ~~February 23, 2015,~~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 ~~August 2017.~~June 2022. On ~~August 22, 2017,~~June 4, 2019, the Company’s Board of Directors authorized the repurchase of an additional 20,000,000 common shares under a ~~new~~ share repurchase ~~program,~~program. As of ~~which 17,902,153~~July 31, 2023, 19,156,390 common shares were remaining ~~as of October 31, 2017.~~

~~In addition to the shares repurchased~~ under the ~~share repurchase program, during~~program.

During the ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, the Company acquired and subsequently retired ~~92,404~~303,579 common shares at a total cost of ~~$2,180~~$8,184 from employees to meet ~~minimum statutory~~payroll tax withholding ~~requirements.~~requirements on vested share-based awards. During the ~~nine~~six months ended ~~October~~July 31, ~~2016,~~2022, the Company acquired and subsequently retired ~~55,683~~245,512 common shares at a total cost of ~~$2,049~~$6,668 from employees to meet ~~minimum statutory~~payroll tax withholding ~~requirements.~~requirements on vested share-based awards.

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

The following tables present the changes in “Accumulated other comprehensive ~~income (loss),~~loss,” by component, net of tax, for the three and ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 and ~~2016:~~2022:

Three Months Ended October 31, 2017

Nine Months Ended October 31, 2017

Unrealized Gains

Unrealized Gains

Foreign

and (Losses) on

Foreign

and (Losses) on

Currency

Available-for-

Currency

Available-for-

Translation

Sale Securities

Total

Translation

Sale Securities

Total

Balance at beginning of period

$
(23,282
)

$
(61
)

$
(23,343
)

$
(34,012
)

$
(57
)

$
(34,069
)
Other comprehensive income (loss)
   before reclassifications

(1,388
)

(11
)

(1,399
)

9,342

(6
)

9,336

Amounts reclassified from
�� accumulated other comprehensive
   income (loss)

—

(2
)

(2
)

—

(11
)

(11
)
Net current-period other
   comprehensive income (loss)

(1,388
)

(13
)

(1,401
)

9,342

(17
)

9,325

Balance at end of period

$
(24,670
)

$
(74
)

$
(24,744
)

$
(24,670
)

$
(74
)

$
(24,744
)


	Three Months Ended July 31, 2023									Six Months Ended July 31, 2023
				Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(39,647	)	$	(3,691	)	$	(43,338	)	$	(42,824	)	$	(5,811	)	$	(48,635	)
Other comprehensive income (loss) before reclassifications		4,515			28			4,543			7,692			2,147			9,839
Amounts reclassified from accumulated other comprehensive income (loss)		—			(7	)		(7	)		—			(6	)		(6	)
Net current-period other comprehensive income (loss)		4,515			21			4,536			7,692			2,141			9,833
Balance at end of period	$	(35,132	)	$	(3,670	)	$	(38,802	)	$	(35,132	)	$	(3,670	)	$	(38,802	)


	Three Months Ended July 31, 2022									Six Months Ended July 31, 2022
				Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(36,593	)	$	(8,003	)	$	(44,596	)	$	(22,204	)	$	(2,626	)	$	(24,830	)
Other comprehensive income (loss) before reclassifications		(6,243	)		876			(5,367	)		(20,632	)		(4,389	)		(25,021	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(222	)		(222	)		—			(334	)		(334	)
Net current-period other comprehensive income (loss)		(6,243	)		654			(5,589	)		(20,632	)		(4,723	)		(25,355	)
Balance at end of period	$	(42,836	)	$	(7,349	)	$	(50,185	)	$	(42,836	)	$	(7,349	)	$	(50,185	)

Three Months Ended October 31, 2016

Nine Months Ended October 31, 2016

Unrealized Gains

Unrealized Gains

Foreign

and (Losses) on

Foreign

and (Losses) on

Currency

Available-for-

Currency

Available-for-

Translation

Sale Securities

Total

Translation

Sale Securities

Total

Balance at beginning of period

$
(26,955
)

$
28

$
(26,927
)

$
(23,479
)

$
28

$
(23,451
)
Other comprehensive income (loss)
   before reclassifications

(10,665
)

41

(10,624
)

(14,141
)

19

(14,122
)
Amounts reclassified from
   accumulated other comprehensive
   income (loss)

—

(96
)

(96
)

—

(74
)

(74
)
Net current-period other
   comprehensive income (loss)

(10,665
)

(55
)

(10,720
)

(14,141
)

(55
)

(14,196
)
Balance at end of period

$
(37,620
)

$
(27
)

$
(37,647
)

$
(37,620
)

$
(27
)

$
(37,647
)

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

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				Six Months Ended
	October 31,				October 31,				July 31,				July 31,
	2017		2016		2017		2016		2023		2022		2023		2022
Basic weighted-average common shares outstanding		109,667,224	��	116,829,912		113,113,597		117,087,696		92,741,888		93,041,310		92,610,499		94,240,412
Effect of dilutive options, stock appreciation rights, performance stock units and restricted stock units		433,030		563,798		318,770		365,309
Effect of dilutive options, performance stock units and restricted stock units										1,486,297		606,904		1,416,451		737,093
Diluted weighted-average shares outstanding		110,100,254		117,393,710		113,432,367		117,453,005		94,228,185		93,648,214		94,026,950		94,977,505

For the three months ended ~~October~~July 31, ~~2017~~2023 and ~~2016,~~2022, awards to purchase ~~319,883~~40,000 common shares at a price of$46.42 and 205,000 common shares ranging in price from ~~$28.10~~$23.74 to ~~$46.02 and 556,375 common shares ranging in price from $35.41 to $46.02, 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, 2017 and 2016, awards to purchase 1,016,733 common shares ranging in price from $25.60 to $46.02 and 857,331 common shares ranging in price from $28.10 to $46.02,$46.42, respectively, were excluded from the calculation of diluted net income per common share because the impact would be anti-dilutive.

For the six months ended July 31, 2023 and 2022, awards to purchase 80,000 common shares ranging in price from $28.47 to $46.42 and 202,500 common shares ranging in price from $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.

Excluded from the calculation of diluted net income per common share as of ~~October~~July 31, ~~2017~~2023 and ~~2016~~July 31, 2022, were ~~2,610,295~~272,554 and ~~2,442,345~~167,500 performance-based equity awards, respectively, because they did not meet the required performance criteria.

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.

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 ~~two~~three reportable ~~segments— “Retail”~~segments – “Retail,” “Wholesale” and ~~“Wholesale.~~“Nuuly.”

The Company’s Retail segment ~~consists of~~includes the ~~“Anthropologie,” “Bhldn,” “Free~~Anthropologie, Free People,~~” “Terrain”~~ FP Movement, Terrain and ~~“Urban Outfitters” brands and the Food and Beverage division. The Anthropologie, Bhldn and Terrain brands make up the “Anthropologie Group.” As of October 31, 2017, there were 245~~ Urban Outfitters stores, 227 Anthropologie Group stores, 132 Free People stores and 12 restaurants under the Food and Beverage division. Each of Urban Outfitters, the Anthropologie Group and Free People, including their stores and direct-to-consumer channels, and the restaurants operated under the Company’s Food and Beverage division are considered an operating segment. Net sales from the Retail segment accounted for approximately 90.6% of total consolidated net sales for the three and nine months ended October 31, 2017. Net sales from the Retail segment accounted for approximately 91.0% and 91.5% of total consolidated net sales for the three and nine months ended October 31, 2016, respectively. The remaining net sales are derived from the Company’s Wholesale segment that consists of the Free People and Anthropologie Group wholesale divisions that primarily design, develop and market young women’s contemporary casual apparel, including intimates and activewear, shoes and home goods sold through approximately 1,900 department and specialty stores worldwide, third-party websites and the Retail segment. The Anthropologie Group wholesale division was established in the third quarter of fiscal 2018.

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 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 includes the Nuuly brand, which offers customers a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service.

The Company evaluates the performance of ~~the segments~~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 ~~each reporting segment~~the Retail and Wholesale segments are inventory and property and equipment.

~~Other~~ The principal identifiable assets are comprised primarily of general corporate assets, which principally consist of cash and cash equivalents, marketable securities, deferred taxes and prepaid expenses, which are typically not allocated to the Company’s segments. The Company accounts for intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases.

The Company’s omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers. The Company’s investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the ~~omni-channel~~Nuuly segment are rental product and not the separate store or direct-to-consumer channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of the Company’s fulfillment centers or from a different store location if an item is not available at the original store. The Company also allows customers to view in-store inventory from its websitesproperty and ~~mobile applications. Direct-to-consumer orders are primarily shipped to the Company’s customers~~

through its fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of a particular item. Direct-to-consumer orders may also be picked up at a store location. Customers may also return certain merchandise purchased through direct-to-consumer channels at store locations. As the Company’s customers continue to shop across multiple channels, the Company has adapted its approach towards meeting this demand. Due to the availability of like product in a variety of shopping channels, the Company sources these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow the Company to better serve its customers and help it to complete sales that otherwise may not have occurred due to out-of-stock positions. As a result of changing customer behavior and the substantial integration of the operations of the Company’s store and direct-to-consumer channels, the Company manages and analyzes its performance based on a single omni-channel rather than separate channels and believes that the omni-channel results present the most meaningful and appropriate measure of the Company’s performance. Over the next several years the Company plans to continue to shift investment to the direct-to-consumer channel to align with changing customer preferences, and focus on improving its speed-to-customer capabilities.equipment.

The accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2017. Both~~2023. All of the ~~Retail and Wholesale~~Company’s segments are highly diversified. No one customer constitutes more than 10% of the Company’s total consolidated net sales. A summary of the information about the Company’s operations by segment is as follows:


	Three Months Ended						Six Months Ended
	July 31,						July 31,
	2023			2022			2023			2022
Net sales
Retail operations	$	1,160,089		$	1,095,191		$	2,164,190		$	2,058,626
Wholesale operations		60,768			61,900			124,183			130,971
Nuuly operations		55,793			28,776			107,263			51,625
Intersegment elimination		(4,455	)		(2,479	)		(9,767	)		(5,900	)
Total net sales	$	1,272,195		$	1,183,388		$	2,385,869		$	2,235,322
Income from operations
Retail operations	$	144,034		$	96,292		$	227,264		$	151,833
Wholesale operations		6,726			7,534			13,385			17,239
Nuuly operations		(2,439	)		(2,379	)		(2,710	)		(6,130	)
Intersegment elimination		(66	)		177			(412	)		590
Total segment operating income		148,255			101,624			237,527			163,532
General corporate expenses		(16,157	)		(15,806	)		(34,046	)		(31,477	)
Total income from operations	$	132,098		$	85,818		$	203,481		$	132,055


	July 31,		January 31,		July 31,
	2023		2023		2022
Inventory
Retail operations	$	535,940	$	529,853	$	623,562
Wholesale operations		50,574		57,657		73,912
Total inventory	$	586,514	$	587,510	$	697,474
Rental product, net (1)
Nuuly operations	$	119,079	$	90,934	$	59,236
Total rental product, net	$	119,079	$	90,934	$	59,236

Three Months Ended

Nine Months Ended

October 31,

October 31,

2017

2016

2017

2016

Net sales

Retail operations

$
808,546

$
785,026

$
2,289,526

$
2,300,981

Wholesale operations

88,663

81,552

245,866

222,712

Intersegment elimination

(4,435
)

(4,087
)

(8,497
)

(8,057
)
Total net sales

$
892,774

$
862,491

$
2,526,895

$
2,515,636

Income from operations

Retail operations

$
61,667

$
67,981

$
150,575

$
234,022

Wholesale operations

20,866

17,006

57,373

44,213

Intersegment elimination

61

(317
)

91

(568
)
Total segment operating income

82,594

84,670

208,039

277,667

General corporate expenses

(9,706
)

(14,365
)

(38,935
)

(38,667
)
Total income from operations

$
72,888

$
70,305

$
169,104

$
239,000

(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	$	1,153,705	$	1,138,487	$	1,114,792
Wholesale operations		881		990		1,174
Nuuly operations		67,757		48,258		34,281
Total property and equipment, net	$	1,222,343	$	1,187,735	$	1,150,247

October 31,

January 31,

October 31,

2017

2017

2016

Inventory

Retail operations

$
403,631

$
301,519

$
415,923

Wholesale operations

46,326

37,071

37,903

Total inventory

$
449,957

$
338,590

$
453,826

Property and equipment, net

Retail operations

$
826,296

$
864,396

$
869,042

Wholesale operations

2,810

3,390

3,267

Total property and equipment, net

$
829,106

$
867,786

$
872,309

The following ~~table summarizes the~~tables summarize net sales and percentage of net sales from contracts with customers by merchandise category ~~for the Company:~~and by segment:


	Three Months Ended
	July 31,
	2023				2022
Net sales
Apparel	$	797,235	69	%	$	721,966	66	%
Home		169,403	14	%		193,098	18	%
Accessories		138,928	12	%		133,783	12	%
Other		54,523	5	%		46,344	4	%
Retail operations		1,160,089	100	%		1,095,191	100	%
Apparel		52,436	93	%		54,215	91	%
Accessories		2,698	5	%		5,011	9	%
Other		1,179	2	%		195	0	%
Wholesale operations (1)		56,313	100	%		59,421	100	%
Nuuly operations		55,793				28,776
Total net sales	$	1,272,195			$	1,183,388

	Six Months Ended
	July 31,
	2023				2022
Net sales
Apparel	$	1,482,320	68	%	$	1,360,941	66	%
Home		319,627	15	%		355,908	17	%
Accessories		260,639	12	%		247,625	12	%
Other		101,604	5	%		94,152	5	%
Retail operations		2,164,190	100	%		2,058,626	100	%
Apparel		105,057	92	%		113,727	91	%
Accessories		8,019	7	%		10,974	9	%
Other		1,340	1	%		370	0	%
Wholesale operations (1)		114,416	100	%		125,071	100	%
Nuuly operations		107,263				51,625
Total net sales	$	2,385,869			$	2,235,322

Three Months Ended

Nine Months Ended

October 31,

October 31,

2017

2016

2017

2016

Net sales

Apparel ⁽¹⁾

69
%

68
%

69
%

69
%
Home ⁽²⁾

14
%

14
%

14
%

14
%
Accessories ⁽³⁾

12
%

13
%

12
%

13
%
Other ⁽⁴⁾

5
%

5
%

5
%

4
%
Total net sales

100
%

100
%

100
%

100
%

(1)   Apparel includes intimates and activewear

(2)   Home includes home furnishings, electronics, gifts and decorative items

(3)   Accessories includes footwear, jewelry and handbags

(4)   Other includes beauty, shipping and handling revenues and the Food and Beverage division

(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.

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,		July 31,		January 31,		July 31,
	2017		2017		2016		2023		2023		2022
Property and equipment, net
Domestic operations	$	735,731	$	766,419	$	767,916	$	1,064,868	$	1,033,926	$	990,457
Foreign operations		93,375		101,367		104,393		157,475		153,809		159,790
Total property and equipment, net	$	829,106	$	867,786	$	872,309	$	1,222,343	$	1,187,735	$	1,150,247


	Three Months Ended				Six Months Ended
	July 31,				July 31,
	2023		2022		2023		2022
Net Sales
Domestic operations	$	1,104,399	$	1,022,318	$	2,084,005	$	1,935,882
Foreign operations		167,796		161,070		301,864		299,440
Total net sales	$	1,272,195	$	1,183,388	$	2,385,869	$	2,235,322

Three Months Ended

Nine Months Ended

October 31,

October 31,

2017

2016

2017

2016

Net Sales

Domestic operations

$
779,790

$
760,074

$
2,222,589

$
2,211,925

Foreign operations

112,984

102,417

304,306

303,711

Total net sales

$
892,774

$
862,491

$
2,526,895

$
2,515,636

~~Item 2.~~

~~Management’s Discussion and Analysis of~~ ~~Financial Condition and Results of Operations~~

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: 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, ~~overall~~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 ~~and market~~ conditions and ~~worldwide political events and the resultant impact on consumer spending patterns,~~legal or regulatory changes, any effects of war including geopolitical instability and impacts of 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 ~~severe~~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~~(including the enactment of tariffs, border adjustment taxes or increases in duties or ~~quotas,~~quotas), the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, ~~risks associated with internet sales, response to new store concepts, our ability to integrate acquisitions,~~ 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, ~~2017,~~2023, filed on April 3, ~~2017.~~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 ~~two~~under three reportable ~~segments: a leading lifestyle specialty~~segments – Retail, ~~segment~~Wholesale and ~~a Wholesale segment.~~Nuuly. Our Retail segment ~~consists of~~includes our Anthropologie, ~~Bhldn,~~ Free People, FP Movement, Terrain and Urban Outfitters ~~brands and our Food and Beverage division.~~brands. Our Retail segment consumer products and services are sold directly to our customers through our ~~stores,~~retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact ~~centers. Our~~centers and franchisee-owned stores. The Wholesale segment ~~consists of the~~includes our Free People, FP Movement and ~~Anthropologie Group wholesale divisions~~Urban Outfitters brands that ~~primarily design, develop and market young women’s contemporary casual apparel, including intimates and activewear, shoes and home goods sold~~sell through ~~approximately 1,900~~ department and specialty stores worldwide, ~~third-party websites~~digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Nuuly segment includes the Nuuly brand, which offers customers a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service.

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 ~~2018~~2024 will end on January 31, ~~2018.~~2024, and our fiscal year 2023 ended on January 31, 2023.

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 ~~stores,~~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 ~~direct-to-consumer~~digital channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of our fulfillment centers or from a different store location if an item is not available at the original store. We also allow customers to view in-store inventory from our websites and mobile applications. Direct-to-consumer orders are primarily shipped to our customers through our fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of particular items. Direct-to-consumer orders may also be picked up at a store location. Customers may also return certain merchandise purchased through direct-to-consumer channels at store locations. As our customers continue to shop across multiple channels, we have adapted our approach towards meeting this demand. Due to the availability of like product in a

variety of shopping channels, we source these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow us to better serve our customers and help us complete sales that otherwise may not have occurred due to out-of-stock positions. As a result of changing customer behavior and the substantial integration of the operations of our store and direct-to-consumer 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. Over the next several years we plan to continue to shift investment to the direct-to-consumer channel to align with changing customer preferences, and focus on improving our speed-to-customer capabilities.

Our comparable Retail segment net sales data is equal to the sum of our comparable store and comparable ~~direct-to-consumer~~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.~~year due to store specific closures from events such as damage from fire, flood and natural weather events. A ~~direct-to-consumer~~digital channel is considered to be comparable if it has been operational for at least 12 full months. ~~There is no overlap between comparable store net sales and comparable direct-to-consumer net sales.~~ Sales from stores and ~~direct-to-consumer~~digital channels that do not fall within the definition of comparable store or digital channel are considered to be non-comparable. ~~The~~Franchise net sales and the effects of foreign currency translation are also considered non-comparable.

We monitor Retail segment metrics including customer traffic, ~~average unit selling price, transactions and~~conversion rates, average units per transaction at our stores and ~~customer sessions,~~on our websites and mobile applications. We also monitor average unit selling price and transactions at our stores and average order value ~~and conversion rates~~ 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 ~~and digital marketing~~ campaigns, circulation of our catalogs and an overall growth in brand recognition.

AsUrban 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 ~~October 31, 2017, we operated 245~~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 ~~of which 181 were located~~are in ~~the United States, 18 were located~~street locations in ~~Canada~~large metropolitan areas and ~~46 were located in Europe. For the nine months ended October 31, 2017, we opened four new Urban Outfitters stores, one located in the United States~~select university communities, specialty centers and ~~three located in Europe, and we closed one store located in the United States. Total store selling square footage increased 0.5% over the prior year period~~enclosed malls that accommodate our customers’ propensity not only to ~~2.2 million square feet.~~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. Urban Outfitters offers a catalog~~stores and sells merchandise through franchisee-owned stores in Europe offering select merchandise, most of which is also available in our Urban Outfitters stores. Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, websites and mobile applications. Urban Outfitters’ product offering 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 product designed internally and designed in collaboration with third-party brands.the Middle East. Urban Outfitters’ North American ~~and~~Retail segment net sales accounted for approximately 18.6% of consolidated net sales for the six months ended July 31, 2023, compared to approximately 24.4% for the comparable period in fiscal 2023. European Retail segment net sales accounted for approximately ~~30.7% and 7.4%~~8.4% of consolidated net sales ~~respectively,~~ for the ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, compared to ~~32.4% and 7.4%, respectively,~~approximately 9.0% for the comparable period in fiscal ~~2017.~~2023.

The Anthropologie Group ~~consists of~~includes the Anthropologie ~~Bhldn~~ and Terrain brands. AsMerchandise at the Anthropologie brand is tailored to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party brand product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of ~~October 31, 2017, we operated 227~~gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and 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. Anthropologie Group stores ~~of which 203 were~~are located in ~~the United States, 13 were located in Canada~~specialty centers, upscale street locations and 11 were located in Europe. For the nine months ended October 31, 2017, we opened three new Anthropologie Group stores, and we closed one store, all located in the United States. Total store selling square footage increased 2.6% over the prior year period to 1.7 million square feet driven mainly by the opening of expanded format stores.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. The Anthropologie brand~~stores, offers registry services through its website and mobile application and in all of its stores throughout the United States, allowing our customers to create gift registries for any occasion. In addition, the brand offers catalogsa catalog in North America ~~and Europe~~ that ~~market~~markets select merchandise, most of which is also available in Anthropologie brand ~~stores. Merchandise at~~stores and sells merchandise through franchisee-owned stores in the Anthropologie brand is tailored to sophisticated and contemporary women aged 28 to 45. Product assortment includes women’s casual apparel and accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty. The Bhldn brand emphasizes every element that contributes to a wedding. The Bhldn brand offers a curated collection of heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie and decorations. 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. We plan to open additional Anthropologie Group stores, some of which may be expanded format stores that include multiple Anthropologie Group brands and that allow us to present an expanded assortment of products in certain categories such as petites, jewelry and accessories, footwear, intimates, beauty and home furnishings.Middle East. The Anthropologie Group’s North American ~~and~~Retail segment net sales accounted for approximately 40.6% of consolidated net sales for the six months ended July 31, 2023, compared to approximately 38.4% for the comparable period in fiscal 2023. European Retail segment net sales accounted for approximately ~~39.0% and 1.6%~~1.5% of consolidated net sales ~~respectively,~~ for the ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, compared to ~~39.2% and 1.4%, respectively,~~approximately 1.8% for the comparable period in fiscal ~~2017.~~2023.

~~As of October 31, 2017, we operated 132~~21

The Free People stores, of which 126 were located in the United States and six were located in Canada. For the nine months ended October 31, 2017, we opened eight new Free People stores, and we closed three stores, all located in the United States. Total store selling square footage increased 17.4% over the prior year period to 287,000. The increase in selling square footage compared to the prior year period was a result of operating eight net new stores, including expanded format stores, that were not in operation during the prior 12 month period. Free People operates websites and mobile applications in North America, Europe and Asia that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all ofGroup includes the Free People ~~wholesale offerings.~~and FP Movement brands. The Free People ~~also offers a catalog that markets select merchandise, most of which is also available in our Free People stores. 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, activewear, ~~intimates,~~ shoes, accessories, home products, gifts and beauty and wellness. ~~We plan to open additional~~The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People Group stores ~~over~~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 ~~next several years, some~~spirit of 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 ~~will be expanded format stores that allow us to present an expanded assortment of intimates, shoes, party dresses~~is also available in our Free People and ~~activewear.~~FP Movement stores. The Free ~~People’s~~People Group’s North American Retail segment net sales accounted for approximately ~~11.2%~~20.0% of consolidated net sales for the ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, compared to approximately ~~10.4%~~17.1% for the comparable period in fiscal ~~2017.~~

As of October 31, 2017, we operated 12 restaurants under our Food and Beverage division, all of which were located in the United States. For the nine months ended October 31, 2017, we opened one new restaurant, and we closed one restaurant. The Food and Beverage division focuses on a dining experience that provides excellence in food, beverage and service. The Food and Beverage division2023. European Retail segment net sales accounted for ~~less than~~approximately 1.0% of consolidated net sales for the ~~nine~~six months ended ~~October~~July 31, ~~2017 and~~2023, compared to less than 1.0% for the comparable period in fiscal ~~2017.~~2023.

Net sales from the Retail segment accounted for approximately 90.7% of consolidated net sales for the six months ended July 31, 2023, compared to 92.1% for the comparable period in fiscal 2023.

Store data for the six months ended July 31, 2023 was as follows:


	January 31,		Stores		Stores			July 31,
	2023		Opened		Closed			2023
Urban Outfitters
United States		183		—		(2	)		181
Canada		18		1		—			19
Europe		62		3		(1	)		64
Urban Outfitters Global Total		263		4		(3	)		264
Anthropologie Group
United States		207		2		(3	)		206
Canada		10		—		—			10
Europe		21		—		—			21
Anthropologie Group Global Total		238		2		(3	)		237
Free People Group
United States (1)		174		8		(1	)		181
Canada		3		—		—			3
Europe		11		1		—			12
Free People Group Global Total		188		9		(1	)		196
Menus & Venues (2)
United States		11		1		(1	)		11
Menus & Venues Total		11		1		(1	)		11
Total Company-Owned Stores		700		16		(8	)		708
Franchisee-Owned Stores (3)		8		1		—			9
Total URBN		708		17		(8	)		717

(1)

Five FP Movement stores were opened during the six months ended July 31, 2023. 36 FP Movement stores were open as of July 31, 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 July 31, 2023 and 2022 was as follows:


	July 31,		July 31,
	2023		2022		Change
Selling square footage (in thousands):
Urban Outfitters		2,275		2,263		0.5	%
Anthropologie Group		1,806		1,821		-0.8	%
Free People Group (1)		407		384		6.0	%
Total URBN (2)		4,488		4,468		0.4	%

(1)

Selling square footage for FP Movement was 47 and 33 as of July 31, 2023 and 2022, respectively.

(2)

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

We plan to open approximately 19 new stores during fiscal 2018, including five Urban Outfitters stores, four Anthropologie Group stores, nine Free People stores and one restaurant. We plan to close approximately eight stores during fiscal 2018, including two Urban Outfitters stores, one Anthropologie Group store, four Free People stores and one restaurant. Within the United States and Canada,for future new store growth will be driven by the Free People brand, as both Urban Outfitters and Anthropologie brands are at or close to our currently planned total store count. Our net store growth strategy for the Anthropologie Group will focus on relocation or the conversion of existing stores into expanded format stores. In the future, we plan for new store growth for ~~the Urban Outfitters, Anthropologie and Free People~~all three brands to come from ~~modest~~ expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise ~~and~~or joint venture agreements. We plan for future digital channel growth to come from expansion domestically and internationally.

Projected openings and closings for fiscal 2024 are as follows:


	January 31,		Projected		Projected			January 31,
	2023		Openings		Closings			2024
Urban Outfitters		263		8		(11	)		260
Anthropologie Group		238		7		(5	)		240
Free People Group (1)		188		12		(4	)		196
Menus & Venues		11		1		(1	)		11
Total Company-Owned Stores		700		28		(21	)		707
Franchisee-Owned Stores		8		1		—			9
Total URBN		708		29		(21	)		716

(1)

Includes six FP Movement projected store openings.

Wholesale Segment

Our Wholesale segment ~~consists of~~includes the Free People, FP Movement and ~~Anthropologie Group wholesale divisions~~Urban Outfitters brands that ~~design, develop and market young women’s contemporary casual apparel, including intimates and activewear, shoes and home goods sold~~sell through ~~approximately 1,900~~ department and specialty stores worldwide, third-party ~~websites~~digital businesses and our Retail segment. The ~~Anthropologie Group wholesale division was established in~~Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the ~~third quarter of fiscal 2018.~~Free People and FP Movement brands and the BDG and “iets frans” apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately ~~9.4%~~4.8% of consolidated net sales for the ~~nine~~six months ended ~~October~~July 31, ~~2017,~~2023, compared to ~~8.5%~~5.6% for the comparable period in fiscal ~~2017.~~2023.

Nuuly Segment

Our Nuuly segment includes the Nuuly brand. 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. Our Nuuly segment net sales accounted for approximately 4.5% of consolidated net sales for the six months ended July 31, 2023, compared to approximately 2.3% for the comparable period in fiscal 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, ~~2017,~~2023, which are included in our Annual Report on Form 10-K filed with the SEC on April 3, ~~2017.~~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. We adopted the new accounting standard related to share-based compensation on February 1, 2017, which changed our accounting policy for forfeitures (See Note 2, “Recent Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q). Other than the adoption of the new accounting standard, thereThere have been no significant changes to our critical accounting policies during the ~~nine~~six months ended ~~October~~July 31, ~~2017.~~2023.

Results of Operations

As a Percentage of Net Sales

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

Three Month Ended

Nine Months Ended

October 31,

October 31,

2017

2016

2017

2016

Net sales

100.0
%

100.0
%

100.0
%

100.0
%
Cost of sales

66.6

65.2

67.0

64.1

Gross profit

33.4

34.8

33.0

35.9

Selling, general and administrative expenses

25.2

26.6

26.3

26.4

Income from operations

8.2

8.2

6.7

9.5

Other (expense) income, net

(0.1)

0.1

0.0

0.0

Income before income taxes

8.1

8.3

6.7

9.5

Income tax expense

3.0

2.8

2.5

3.4

Net income

5.1
%

5.5
%

4.2
%

6.1
%

Three Months Ended ~~October~~July 31, ~~2017~~2023 (Fiscal 2024) Compared To

Three Months Ended ~~October~~July 31, ~~2016~~2022 (Fiscal 2023)


(amounts in millions)	Three Months Ended
	July 31,
	2023					2022
Net sales	$	1,272.2		100.0	%	$	1,183.4			100.0	%
Cost of sales		816.6	64.2				808.8			68.3
Gross profit		455.6		35.8			374.6			31.7
Selling, general and administrative expenses		323.5	25.4				288.8			24.4
Income from operations		132.1		10.4			85.8			7.3
Other income (loss), net		3.4		0.3			(2.2	)	(0.2)
Income before income taxes		135.5		10.7			83.6			7.1
Income tax expense		31.4	2.5				24.1			2.1
Net income	$	104.1		8.2	%	$	59.5			5.0	%

Net sales infor the ~~third~~second quarter of fiscal ~~2018~~2024 were ~~$892.8 million,~~$1.27 billion, compared to ~~$862.5 million~~$1.18 billion in the ~~third~~second quarter of fiscal ~~2017.~~2023. The ~~$30.3~~$88.8 million increase was attributable to a ~~$23.5~~$64.9 million, or ~~3.0%~~5.9%, increase in Retail segment net sales and ~~a $6.8~~an increase in Nuuly segment net sales of $27.0 million, or ~~8.7%~~93.9%, ~~increase~~partially offset by a $3.1 million, or 5.2%, decrease in ~~our~~ Wholesale segment net sales. ~~Retail segment net sales for the third quarter of fiscal 2018 accounted for 90.6% of total net sales compared to 91.0% of total net sales in the third quarter of fiscal 2017.~~

The increase in our Retail segment net sales during the ~~third~~second quarter of fiscal ~~2018~~2024 was due to an increase of ~~$9.4~~$51.9 million, or ~~1.2%~~4.9%, in Retail segment comparable net sales, ~~which includes our direct-to-consumer channel,~~ and an increase of ~~$14.1~~$13.0 million in non-comparable ~~net sales, including new store~~ net sales. Retail segment comparable net sales increased ~~4.1%~~26.9% at the Free People ~~1.7%~~Group and 10.6% at the Anthropologie Group and ~~0.1%~~decreased 14.1% at Urban Outfitters. ~~Excluding the estimated impact of the North American hurricanes in the quarter, comparable~~ Retail segment comparable net sales increased ~~1.9%,~~in North America and ~~by brand, comparable Retail segment net sales increased 4.8% at Free People, 2.4% at the Anthropologie Group and 0.8% at Urban Outfitters.~~were flat in Europe. The overall increase in Retail segment comparable net sales was driven by ~~continued~~mid-single-digit positive growth in ~~the direct-to-consumer~~both retail store sales and digital channel sales. Comparable store net sales increased as higher store traffic and average unit retail price were partially offset by ~~negative retail store sales.~~decreases in units per transaction, conversion rate and transactions. The ~~direct-to-consumer~~digital channel comparable net sales increase was driven by increases in sessions and ~~conversion rate, which more than offset a small decrease in~~ average order ~~value. Negative comparable store net sales resulted from declines in transactions, average unit selling price~~value, while conversion rate and units per ~~transaction. Store traffic for the quarter increased, with strong growth in our European market.~~

transaction decreased. The increase in non-comparable net sales ~~attributable to non-comparable sales~~during the second quarter of fiscal 2024 was primarily due to the ~~result of operating 35~~44 new Company-owned stores and

restaurants opened and 20 Company-owned stores and restaurants ~~during~~closed since the ~~third quarter~~prior comparable period and the positive impact of fiscal 2018 that were not in operation for the full comparable quarter in fiscal 2017. Thus far during the fourth quarter of fiscal 2018, comparable Retail segment net sales are mid single-digit positive.foreign currency translation.

The ~~increase~~decrease in Wholesale segment net sales in the ~~third~~second quarter of fiscal ~~2018,~~2024, as compared to the ~~third~~second quarter of fiscal ~~2017,~~2023, was due to ~~domestic and international growth at~~a $3.6 million, or 6.5%, decrease in sales for the Free People Group, partially offset by a $0.5 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, specialty stores and third-party websites. Wholesale~~stores. The increase in Nuuly segment net sales ~~growth~~ was driven by an 85% increase in ~~units and average unit selling price.~~our subscribers compared to the end of the prior year's comparable quarter.

Gross profit percentage for the ~~third~~second quarter of fiscal ~~2018 decreased~~2024 increased to ~~33.4%~~35.8% of net sales from ~~34.8%~~31.7% of net sales in the ~~comparable~~second quarter inof fiscal ~~2017.~~2023. Gross profit ~~decreased~~increased to ~~$297.7~~$455.6 million in the ~~third~~second quarter of fiscal ~~2018~~2024 from ~~$299.9~~$374.6 million in the ~~comparable~~second quarter inof fiscal ~~2017.~~2023. The ~~decline~~increase in gross profit ~~percentage~~rate was primarily due to higher initial merchandise markups and lower merchandise markdowns at all three Retail segment brands. Higher initial merchandise markups were primarily driven by ~~deleverage~~lower inbound transportation costs as a result of the improved global supply chain environment, which was negatively impacted by COVID-19 in ~~delivery and logistics expense~~the prior year period. The increase in gross profit dollars was due to ~~increased penetration of~~ the ~~direct-to-consumer channel,~~improved gross profit rate and higher ~~international sales and increased sales of furniture.~~ net sales.

Total inventory at ~~October~~July 31, ~~2017~~2023, as compared to July 31, 2022, decreased by ~~$3.8~~$111.0 million, or ~~0.9%~~15.9%, to ~~$450.0 million from $453.8 million at October 31, 2016. Comparable~~$586.5 million. Retail segment inventory decreased ~~1.4% at cost, which was partially offset~~ by 14.1% primarily due to improved inventory control supported by a more reliable supply chain. Wholesale segment inventory decreased by 31.6% due to ~~stock non-comparable stores.~~improved inventory control and a reduction in wholesale sales.

Selling, general and administrative expenses increased by $34.7 million, or 12.0%, in the second quarter of fiscal 2024, compared to the second quarter of fiscal 2023. Selling, general and administrative expenses as a percentage of net sales ~~decreased during~~increased in the ~~third~~second quarter of fiscal ~~2018~~2024 to ~~25.2%~~25.4% of net sales, compared to ~~26.6%~~24.4% of net sales for the ~~third~~second quarter of fiscal ~~2017. Selling,~~2023. The deleverage in selling, general and administrative expenses ~~decreased by $4.7 million, or 2.1%,~~as a rate to ~~$224.9 million, in the third quarter of fiscal 2018, from $229.6 million in the third quarter of fiscal 2017. The leverage and decrease in expenses were~~sales was primarily related to higher incentive-based compensation costs due to ~~savings associated with our store organization project~~improved Company performance and ~~lower share-based~~increased marketing and creative expenses to support increased sales and customer growth. The dollar growth in selling, general and administrative expenses was primarily related to higher compensation ~~expense, partially offset by~~costs, including higher incentive-based compensation costs due to improved Company performance, as well as increased ~~investments in digital~~ marketing ~~expenditures~~and creative expenses to ~~drive sales.~~support increased sales and customer growth.

Income from operations ~~remained flat at 8.2%~~was 10.4% of net sales, or ~~$72.9~~$132.1 million, for the ~~third~~second quarter of fiscal ~~2018~~2024 compared to ~~8.2%,~~7.3% of net sales, or ~~$70.3~~$85.8 million, for the ~~third~~second quarter of fiscal ~~2017.~~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~~second quarter of fiscal ~~2018~~2024 was ~~37.4% of income before income taxes~~23.2% compared to ~~33.5% of income before income taxes~~28.8% in the ~~third~~second quarter of fiscal ~~2017.~~2023. The ~~increase~~change in ~~the~~ effective tax rate for the three months ended July 31, 2023 was ~~primarily due~~attributable to the ratio of ~~certain~~ foreign taxable ~~profits and losses~~earnings to global taxable ~~profits~~earnings and the ~~adoption~~favorable impact of general business credits in the new accounting standard related to share-based compensation (See Note 2, “Recent Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statement included in this Quarterly Report on Form 10-Q).current year.

~~Nine~~25

Six Months Ended ~~October~~July 31, ~~2017~~2023 (Fiscal 2024) Compared To ~~Nine~~

Six Months Ended ~~October~~July 31, ~~2016~~2022 (Fiscal 2023)


(amounts in millions)	Six Months Ended
	July 31,
	2023					2022
Net sales	$	2,385.9		100.0	%	$	2,235.3		100.0		%
Cost of sales		1,559.1		65.3			1,537.4		68.8
Gross profit		826.8		34.7			697.9		31.2
Selling, general and administrative expenses		623.3		26.2			565.8		25.3
Income from operations		203.5		8.5			132.1		5.9
Other income (loss), net		4.4		0.2			(4.3	)	(0.2	)
Income before income taxes		207.9		8.7			127.8		5.7
Income tax expense		51.0	2.1				36.8		1.6
Net income	$	156.9		6.6	%	$	91.0		4.1		%

Net sales for the ~~nine~~six months ended ~~October~~July 31, ~~2017~~2023 were ~~$2.53~~$2.39 billion, compared to ~~$2.52~~$2.24 billion in the comparable period of fiscal ~~2017.~~2023. The ~~$11.3~~$150.5 million increase was attributable to a ~~$22.7~~$105.6 million, or ~~10.6%~~5.1%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $55.6 million, or 107.8%, partially offset by a $10.7 million, or 8.5%, decrease in Wholesale segment net ~~sales, partially offset by an $11.4 million, or 0.5%, decrease in our Retail segment net~~ sales. ~~Retail segment net sales for the nine months ended October 31, 2017 accounted for 90.6% of total net sales compared to 91.5% of total net sales in the nine months ended October 31, 2016.~~

The ~~decline~~increase in our Retail segment net sales during the first ~~nine~~six months of fiscal ~~2018~~2024 was due to ~~a decrease~~an increase of ~~$43.0~~$94.3 million, or ~~2.0%~~4.7%, in Retail segment comparable net sales ~~which includes our direct-to-consumer channel, partially offset by~~and an increase of ~~$31.6~~$11.3 million in non-comparable ~~net sales, including new store~~ net sales. Retail segment comparable net sales increased ~~3.4%~~22.5% at the Free People ~~but decreased 1.7%~~Group and 11.9% at the Anthropologie Group and ~~3.6%~~decreased 13.7% at Urban Outfitters. Retail segment comparable net sales increased in North America and were flat in Europe. The ~~decrease~~overall increase in Retail segment comparable net sales was driven by ~~negative comparable store net sales, which were partially offset by continued~~mid-single-digit positive growth in ~~the direct-to-consumer channel. Negative comparable~~both digital channel sales and retail store net sales resulted from decreased transactions and average unit selling price, while units per transaction were flat. Store traffic was also flat, with declines in North America offsetting growth in Europe.sales. The ~~direct-to-consumer~~digital channel net sales increase was driven by ~~an increase~~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 and average unit retail price, which ~~more than~~were partially offset ~~a decrease~~by decreases in ~~average order value.~~units per transaction, conversion rate and transactions. The increase in non-comparable net sales ~~attributable to non-comparable sales~~during the first half of fiscal 2024 was primarily due to the ~~result~~positive net impact of ~~operating 48~~the 49 new Company-owned stores and restaurants ~~during~~opened and 23 Company-owned stores and restaurants closed since the ~~first nine months of fiscal 2018 that were not in operation for the full~~prior comparable period, partially offset by the negative impact of ~~fiscal 2017.~~foreign currency translation.

The ~~increase~~decrease in Wholesale segment net sales ~~during~~in the first ~~nine~~six months of fiscal ~~2018,~~2024, as compared to the first ~~nine~~six months of fiscal ~~2017,~~2023, was due to ~~domestic and international growth at department stores, specialty stores and third-party websites. Wholesale~~a $12.5 million, or 10.7%, decrease in sales ~~growth was driven by an increase in units that was~~for the Free People Group, partially offset by a $1.8 million increase in Urban Outfitters wholesale sales. The Free People Group wholesale sales decrease was primarily due to a decrease in ~~average unit selling price.~~sales to department stores and specialty stores. The increase in Nuuly segment net sales was due to an 85% increase in our subscribers compared to the end of the prior year's comparable period.

Gross profit percentage for the first ~~nine~~six months of fiscal ~~2018 decreased~~2024 increased to ~~33.0%~~34.7% of net sales from ~~35.9%~~31.2% of net sales in the comparable period inof fiscal ~~2017.~~2023. Gross profit ~~decreased~~increased to ~~$834.9~~$826.8 million ~~for~~in the first ~~nine~~six months of fiscal ~~2018~~2024 from ~~$904.3~~$697.9 million in the comparable period inof fiscal ~~2017.~~2023. The ~~decline~~increase in gross profit ~~percentage~~rate was ~~driven by deleverage in delivery and logistics expenses~~ primarily due to ~~the penetration~~higher initial merchandise markups at all three Retail segment brands primarily driven by lower inbound transportation costs as a result of the ~~direct-to-consumer channel, higher international sales~~improved global supply chain environment, which was negatively impacted by COVID-19 in the prior year period. Additionally, the gross profit rate benefited from lower merchandise markdowns at the Anthropologie Group and ~~increased sales of furniture~~Free People Group brands. The increase in gross profit dollars was due to the improved gross profit rate and higher ~~markdowns due to underperforming women’s apparel and accessories product at Anthropologie and Urban Outfitters.~~net sales.

Selling, general and administrative expenses increased by ~~$0.5~~$57.5 million, or ~~0.1%~~10.2%, ~~to $665.8 million,~~ in the first ~~nine~~six months of fiscal ~~2018, from $665.3 million in~~2024, compared to the ~~first nine months~~comparable period of fiscal ~~2017.~~2023. Selling, general and administrative expenses as a percentage of net sales ~~decreased during~~increased in the first ~~nine~~six months of fiscal ~~2018~~2024 to ~~26.3%~~26.2% of net sales, compared to ~~26.4%~~25.3% of net sales for the comparable period of fiscal 2023. The deleverage in selling, general and administrative expenses as a rate to sales was primarily related to higher incentive-based compensation costs due to improved Company performance and increased marketing and creative expenses to support increased sales and customer growth. The dollar growth in selling, general and administrative expenses was primarily related to higher compensation costs, including higher incentive-based compensation costs due to improved Company performance, as well as increased marketing and creative expenses to support increased sales and customer growth.

Income from operations was 8.5% of net sales, or $203.5 million, for the first ~~nine~~six months of fiscal ~~2017.~~2024 compared to 5.9% of net sales, or $132.1 million, for the first six months of fiscal 2023. The ~~leverage is~~increase in operating income was primarily driven by the increase in gross profit. The increase in operating income rate was primarily due to the ~~net savings associated with our store organization project and lower share-based compensation expense, partially offset by increased investments in digital marketing expenditures to drive sales.~~higher gross profit rate.

~~Income from operations decreased to 6.7% of net sales, or $169.1 million, for the first nine months of fiscal 2018 compared to 9.5%, or $239.0 million, for the first nine months of fiscal 2017.~~

Our effective tax rate for the first ~~nine~~six months of fiscal ~~2018~~2024 was ~~37.2% of income before income taxes~~24.5% compared to ~~35.7% of income before income taxes~~28.8% in the first ~~nine~~six months of fiscal ~~2017.~~2023. The ~~increase~~change in ~~the~~ effective tax rate for the six months ended July 31, 2023 was ~~primarily due~~attributable to the ratio of ~~certain~~ foreign taxable ~~profits and losses~~earnings to global taxable ~~profits~~earnings and the ~~adoption~~favorable impact of general business credits in the new accounting standard related to share-based compensation (See Note 2, “Recent Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statement included in this Quarterly Report on Form 10-Q).current year.

Liquidity and Capital Resources

~~Cash,~~The following tables set forth certain balance sheet and cash equivalents and marketable securities were $369.2 million as of October 31, 2017, as compared to $403.5 million as of January 31, 2017 and $265.1 million as of October 31, 2016. Our working capital was $544.2 million at October 31, 2017 compared to $528.5 million at January 31, 2017 and $484.8 million at October 31, 2016. flow data for the periods indicated. These tables should be read in the conjunction with the discussion that follows:


(amounts in millions)
	July 31,		January 31,		July 31,
	2023		2023		2022
Cash, cash equivalents and marketable securities	$	597.9	$	485.5	$	404.2
Working capital		408.0		347.3		300.5


	Six Months Ended
	July 31,
	2023			2022
Net cash provided by (used in) operating activities	$	211.2		$	(31.7	)
Net cash (used in) provided by investing activities		(178.0	)		35.7
Net cash used in financing activities		(9.3	)		(118.3	)

The increase in working capital as of ~~October~~July 31, ~~2017~~2023, as compared to January 31, 2017 was primarily due to the increase in accounts receivable and inventory attributable to the seasonality of the business. The increase in working capital as of October 31, 2017 compared to October 31, 20162023, was primarily due to the increase in cash, cash equivalents and marketable securities, partially offset by the timing of disbursements. The increase in working capital as of July 31, 2023, as compared to July 31, 2022, was primarily due to ~~utilization of excess~~the increase in cash, cash equivalents and marketable securities, ~~to pay down long-term debt balances during fiscal 2017.~~partially offset by the decrease in inventory.

During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating ~~activities.~~activities and/or through the 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, repay our long-term debt, open new stores, purchase inventory and expand our fulfillment facilities. We have also continued to invest in our omni-channel capabilities and technology.~~shares.

Cash Flows from Operating Activities

Cash provided by operating activities during the first nine months of fiscal 2018 decreased by $59.7 million to $169.6 million from $229.3 million in the first nine months of fiscal 2017. For both periods, ourOur major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The ~~period over period decrease~~change in cash ~~flows from operations~~provided by operating activities in the first six months of fiscal 2024 compared to cash used in operating activities in the first six months of fiscal 2023 was primarily due to lower inventory purchases and higher net ~~income.~~income in the first six months of fiscal 2024.

Cash Flows from Investing Activities

~~Cash used in investing activities during the first nine months of fiscal 2018 decreased by $33.0 million to $28.3 million from $61.3 million in the first nine months of fiscal 2017.~~ Cash used in investing activities in ~~both periods~~the first six months of fiscal 2024 primarily related to purchases of marketable securities, ~~and~~ property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash ~~used in~~provided by investing activities in the first ~~nine~~six months of fiscal ~~2017 also included $15.3 million used~~2023 primarily related to ~~acquire~~ the ~~Vetri Family group~~sales and maturities of ~~restaurants.~~marketable securities, partially offset by purchases of property and equipment and marketable securities. Cash paid for property and equipment in the first ~~nine~~six months of fiscal ~~2018~~2024 and ~~2017~~2023 was ~~$63.3~~$78.5 million and ~~$112.1~~$105.7 million, respectively, which was primarily used to expand our fulfillment center network and store base in ~~fiscal 2018 and to expand our store base and fulfillment facilities in fiscal 2017.~~both periods.

Cash Flows from Financing Activities

~~Cash used in financing activities during the first nine months of fiscal 2018 decreased by $34.5 million to $159.2 million from $193.7 million in the first nine months of fiscal 2017.~~ Cash used in financing activities in the first ~~nine~~six months of fiscal ~~2018~~2024 primarily related to ~~$157.0 million of~~ repurchases of our common shares ~~under share repurchase programs.~~from employees to meet payroll tax withholding requirements on vested share-based awards. Cash used in financing activities in the first ~~nine~~six months of fiscal ~~2017~~2023 primarily related to ~~$150.0 million in debt repayments and $45.8 million of~~ repurchases of our common shares under aour share repurchase ~~program.~~programs and from employees to meet payroll tax withholding requirements on vested share-based awards.

Credit Facilities

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

Capital and Operating Expenditures

During fiscal ~~2018,~~2024, we plan to ~~construct and~~ open approximately 1928 new ~~stores, including one restaurant,~~Company-owned retail locations, expand or relocate certain existing ~~stores, repurchase common shares, upgrade~~retail locations, increase capacity at our ~~systems, improve our capabilities~~Bristol, Pennsylvania Nuuly fulfillment center and invest in a new Nuuly fulfillment center in Raymore, Missouri in response to growth in the ~~digital channel,~~number of Nuuly subscribers, invest in ~~omni-channel marketing~~new products, markets and brands, purchase inventory and rental product for our ~~Retail and Wholesale~~operating segments at levels appropriate to maintain our planned sales, ~~growth.~~upgrade our systems, improve and expand our digital capabilities and invest in omni-channel marketing when 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 a significant ~~contributor~~contributors to our ~~Retail segment~~ sales ~~growth. During fiscal 2018, we~~growth and plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal ~~2018~~2024 to be approximately ~~$90~~$230 million, ~~all of which~~primarily to support new and expanded fulfillment and distribution centers and new store openings. All fiscal 2024 capital expenditures are expected to be financed by cash ~~flows provided by~~flow from operating ~~activities.~~activities and existing cash and cash 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 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.

~~Off-Balance Sheet Arrangements~~

As of and for the nine months ended October 31, 2017, except for operating leases entered into in the normal course of business, we were not party to any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

Other Matters

See Note ~~2, “Recent~~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 ~~recently issued~~recent accounting pronouncements.

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

~~We are exposed~~Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to ~~the following types of market risks—fluctuations~~our quantitative or qualitative disclosures found in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the purchase price of merchandise, as well as other goods and services, the value of foreign currencies in relation to the U.S. dollar, and changes in interest rates. Due to our inventory turnover rate and our historical ability to pass through the impact of any generalized changes in our cost of goods to our customers through pricing adjustments, commodity and other product risks are not expected to be material. We purchase the majority of our merchandise in U.S. dollars, including a majority of the goods for our stores located in Canada and a portion of the goods for our stores located in Europe.

Our exposure to market risk for changes in foreign currencies is due to our financial statements being presented in U.S. dollars and our international subsidiaries transacting in currencies other than U.S. dollars. Fluctuations in exchange rates in effect during or at the end of the reporting period may affect the value of the reported amounts of revenues, expenses, assets and liabilities. As we expand our international operations, the potential impact of currency fluctuations increases.

Our exposure to market risk for changes in interest rates relates to our cash, cash equivalents and marketable securities and our Credit Facility. As of October 31, 2017, our cash, cash equivalents and marketable securities consisted primarily of cashCompany’s Annual Report on hand and in banks, money market accounts, municipal and pre-refunded municipal bonds rated “BBB” or better, corporate bonds rated “BBB” or better, certificates of deposit and mutual funds. Due to the short average maturity and conservative nature of our investment portfolio, we believe a 100 basis point change in interest rates would not have a material effect on the Condensed Consolidated Financial Statements. As the interest rates on a material portion of our cash, cash equivalents and marketable securities are variable, a change in interest rates earned on the cash, cash equivalents and marketable securities would impact interest income along with cash flows, but would not impact the fair market value of the related underlying instruments.

We are exposed to market risks relating to changes in interest rates on outstanding borrowings under our Credit Facility because these borrowings bear interest at variable rates. A 100 basis point change in our applicable interest rate would not have a material impact to interest expenseForm 10-K for the ~~nine months~~fiscal year ended ~~October~~January 31, ~~2017.~~2023.

~~Item 4.~~

~~Controls and Procedures~~

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 ~~quarter~~three months ended ~~October~~July 31, ~~2017~~2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

~~PART~~ II

PART II

OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

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~~

Item 1A. Risk Factors

There have been no material changes in our risk factors since January 31, ~~2017.~~2023. Please refer to our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2017,~~2023, filed with the SEC on April 3, ~~2017,~~2023, for our risk factors.

Item 5. Other Information

On July 7, 2023, Harry S. Cherken, Jr., a director of the Company, adopted a Rule 10b5-1 trading arrangement through March 1, 2024 that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 80,000 shares of the Company's common stock.

Item 6. Exhibits

~~Item 2.~~Exhibit

Number

~~Unregistered Sales of Equity Securities and the Use of Proceeds~~

~~Issuer Purchase of Equity Securities~~

~~A summary of the repurchase activity under the Company’s share repurchase program for the quarter ended October 31, 2017 is as follows:~~

Period

Total Number
of Shares Purchased ⁽¹⁾

Average Price
Paid per share

Total Number
of Shares Purchased
as Part of
Publicly
Announced
Plans
or Programs

Maximum
Number of
Shares that
May Yet
Be Purchased
Under the
Plans or
Programs ⁽²⁾⁽³⁾

August 1, 2017 through August 31, 2017

1,500,000

$
20.56

1,500,000

19,485,354

September 1, 2017 through September 30, 2017

583,201

$
21.58

583,201

18,902,153

October 1, 2017 through October 31, 2017

1,000,000

$
23.10

1,000,000

17,902,153

Total Fiscal 2018 Third Quarter

3,083,201

3,083,201

17,902,153

In addition to the shares repurchased under the share repurchase program, for the quarter ended October 31, 2017, the Company acquired and subsequently retired 48,981 common shares from employees to meet minimum statutory tax withholding requirements. These shares do not reduce the number of shares that may yet be purchased under our publicly announced share repurchase programs.

²	~~On February 23, 2015, the Company’s Board of Directors authorized the repurchase of 20,000,000 shares under a share repurchase program.~~

³	~~On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20,000,000 shares under a new share repurchase program.~~

~~Item 6.~~

E~~xhibits~~

~~Exhibit~~Description ~~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 ~~3.4~~3.1 of the Company’s ~~Quarterly~~Current Report on Form ~~10-Q~~8-K (file no 000-22754) filed on ~~December 12, 2016.~~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~~

* 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~~six months ended ~~October~~July 31, ~~2017,~~2023, filed with the Securities and Exchange Commission on ~~December~~September 11, ~~2017,~~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 ~~Statement~~Statements of Shareholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

~~SIGNATURES~~

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~~September 11, ~~2017~~2023	By:		/s/ RICHARD A. HAYNE
			Richard A. Hayne
			Chief Executive Officer


		URBAN OUTFITTERS, INC.

Date: ~~December~~September 11, ~~2017~~2023	By:		/s/ F~~RANCIS~~ ~~J. CONFORTI~~MELANIE MAREIN-EFRON
			~~Francis J. Conforti~~Melanie Marein-Efron
			Chief Financial Officer

	For the Nine Months Ended
	October 31,
	2017			2016
Cash flows from operating activities:
Net income	$	106,945		$	153,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		96,966			101,181
Benefit for deferred income taxes		(4,771	)		(11,087	)
Share-based compensation expense		13,831			20,032
Loss on disposition of property and equipment, net		3,276			2,801
Changes in assets and liabilities:
Receivables		(23,567	)		6,261
Inventory		(109,258	)		(126,934	)
Prepaid expenses and other assets		2,815			(7,331	)
Payables, accrued expenses and other liabilities		83,411			90,592
Net cash provided by operating activities		169,648			229,347
Cash flows from investing activities:
Cash paid for property and equipment		(63,338	)		(112,069	)
Cash paid for marketable securities		(174,938	)		(152,340	)
Sales and maturities of marketable securities		209,937			218,400
Acquisition of business		—			(15,325	)
Net cash used in investing activities		(28,339	)		(61,334	)
Cash flows from financing activities:
Repayments of long-term debt		—			(150,000	)
Proceeds from the exercise of stock options		—			4,096
Share repurchases related to share repurchase program		(157,044	)		(45,787	)
Share repurchases related to taxes for share-based awards		(2,180	)		(2,049	)
Net cash used in financing activities		(159,224	)		(193,740	)
Effect of exchange rate changes on cash and cash equivalents		4,501			(4,663	)
Decrease in cash and cash equivalents		(13,414	)		(30,390	)
Cash and cash equivalents at beginning of period		248,140			265,276
Cash and cash equivalents at end of period	$	234,726		$	234,886
Supplemental cash flow information:
Cash paid during the year for:
Income taxes	$	61,119		$	85,179
Non-cash investing activities—Accrued capital expenditures	$	8,560		$	16,012

	Marketable Securities Fair Value as of
	October 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	97,172	$	—	$	—	$	97,172
Municipal and pre-refunded municipal bonds		—		26,026		—		26,026
Mutual funds, held in rabbi trust		5,746		—		—		5,746
Certificates of deposit		—		5,538		—		5,538
	$	102,918	$	31,564	$	—	$	134,482

	Marketable Securities Fair Value as of
	January 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	78,398	$	—	$	—	$	78,398
Municipal and pre-refunded municipal bonds		—		71,261		—		71,261
Mutual funds, held in rabbi trust		4,673		—		—		4,673
Certificates of deposit		—		1,023		—		1,023
	$	83,071	$	72,284	$	—	$	155,355

	Marketable Securities Fair Value as of
	October 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	18,014	$	—	$	—	$	18,014
Municipal and pre-refunded municipal bonds		—		7,160		—		7,160
Mutual funds, held in rabbi trust		4,447		—		—		4,447
Certificates of deposit		—		628		—		628
	$	22,461	$	7,788	$	—	$	30,249

	Three Months Ended October 31, 2017									Nine Months Ended October 31, 2017
				Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(23,282	)	$	(61	)	$	(23,343	)	$	(34,012	)	$	(57	)	$	(34,069	)
Other comprehensive income (loss) before reclassifications		(1,388	)		(11	)		(1,399	)		9,342			(6	)		9,336
Amounts reclassified from �� accumulated other comprehensive income (loss)		—			(2	)		(2	)		—			(11	)		(11	)
Net current-period other comprehensive income (loss)		(1,388	)		(13	)		(1,401	)		9,342			(17	)		9,325
Balance at end of period	$	(24,670	)	$	(74	)	$	(24,744	)	$	(24,670	)	$	(74	)	$	(24,744	)

	Three Months Ended October 31, 2016									Nine Months Ended October 31, 2016
				Unrealized Gains									Unrealized Gains
	Foreign			and (Losses) on						Foreign			and (Losses) on
	Currency			Available-for-						Currency			Available-for-
	Translation			Sale Securities			Total			Translation			Sale Securities			Total
Balance at beginning of period	$	(26,955	)	$	28		$	(26,927	)	$	(23,479	)	$	28		$	(23,451	)
Other comprehensive income (loss) before reclassifications		(10,665	)		41			(10,624	)		(14,141	)		19			(14,122	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(96	)		(96	)		—			(74	)		(74	)
Net current-period other comprehensive income (loss)		(10,665	)		(55	)		(10,720	)		(14,141	)		(55	)		(14,196	)
Balance at end of period	$	(37,620	)	$	(27	)	$	(37,647	)	$	(37,620	)	$	(27	)	$	(37,647	)

	Three Month Ended						Nine Months Ended
	October 31,						October 31,
	2017			2016			2017			2016
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		66.6			65.2			67.0			64.1
Gross profit		33.4			34.8			33.0			35.9
Selling, general and administrative expenses		25.2			26.6			26.3			26.4
Income from operations		8.2			8.2			6.7			9.5
Other (expense) income, net	(0.1)				0.1			0.0			0.0
Income before income taxes		8.1			8.3			6.7			9.5
Income tax expense		3.0			2.8			2.5			3.4
Net income		5.1	%		5.5	%		4.2	%		6.1	%

Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾⁽³⁾
August 1, 2017 through August 31, 2017		1,500,000	$	20.56		1,500,000		19,485,354
September 1, 2017 through September 30, 2017		583,201	$	21.58		583,201		18,902,153
October 1, 2017 through October 31, 2017		1,000,000	$	23.10		1,000,000		17,902,153
Total Fiscal 2018 Third Quarter		3,083,201				3,083,201		17,902,153