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

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

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

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—~~97,975,343~~97,786,381 shares outstanding on September 3, ~~2019.~~2020.

	July 31,			January 31,			July 31,			July 31,			January 31,			July 31,
	2019			2019			2018			2020			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	162,018		$	358,260		$	405,727		$	662,860		$	221,839		$	162,018
Marketable securities		171,398			279,232			198,166			501			211,453			171,398
Accounts receivable, net of allowance for doubtful accounts of $939, $1,499 and $1,613, respectively		95,131			80,461			90,646
Accounts receivable, net of allowance for doubtful accounts of $4,123, $880 and $939, respectively											60,441			88,288			95,131
Inventory		440,087			370,507			375,657			351,771			409,534			440,087
Prepaid expenses and other current assets		131,763			114,296			131,572			195,393			122,282			131,763
Total current assets		1,000,397			1,202,756			1,201,768			1,270,966			1,053,396			1,000,397
Property and equipment, net		867,434			796,029			807,084			889,126			890,032			867,434
Operating lease right-of-use assets		1,085,543			—			—			1,134,678			1,170,531			1,085,543
Marketable securities		78,857			57,292			45,514			9,216			97,096			78,857
Deferred income taxes and other assets		105,814			104,438			104,169			121,292			104,578			105,814
Total Assets	$	3,138,045		$	2,160,515		$	2,158,535		$	3,425,278		$	3,315,633		$	3,138,045
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	181,955		$	144,414		$	149,947		$	207,261		$	167,871		$	181,955
Current portion of operating lease liabilities		209,072			—			—			270,326			221,593			209,072
Accrued expenses, accrued compensation and other current liabilities		235,106			242,230			279,991			293,629			249,306			235,106
Total current liabilities		626,133			386,644			429,938			771,216			638,770			626,133
Non-current portion of operating lease liabilities		1,090,623			—			—			1,102,250			1,137,495			1,090,623
Long-term debt											120,000			—			—
Deferred rent and other liabilities		59,885			284,773			284,925			81,219			84,013			59,885
Total Liabilities		1,776,641			671,417			714,863			2,074,685			1,860,278			1,776,641
Commitments and contingencies (see Note 12)
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, NaN issued		—			—			—			—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 97,965,012, 105,642,283 and 108,951,308 shares issued and outstanding, respectively		10			11			11
Common shares; $.0001 par value, 200,000,000 shares authorized, 97,779,586, 97,976,815 and 97,965,012 shares issued and outstanding, respectively											10			10			10
Additional paid-in-capital		—			—			18,770			9,956			9,477			—
Retained earnings		1,398,681			1,516,190			1,451,492			1,369,830			1,473,872			1,398,681
Accumulated other comprehensive loss		(37,287	)		(27,103	)		(26,601	)		(29,203	)		(28,004	)		(37,287	)
Total Shareholders’ Equity		1,361,404			1,489,098			1,443,672			1,350,593			1,455,355			1,361,404
Total Liabilities and Shareholders’ Equity	$	3,138,045		$	2,160,515		$	2,158,535		$	3,425,278		$	3,315,633		$	3,138,045

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

	Three Months Ended				Six Months Ended				Three Months Ended					Six Months Ended
	July 31,				July 31,				July 31,					July 31,
	2019		2018		2019		2018		2020			2019		2020			2019
Net sales	$	962,329	$	992,454	$	1,826,742	$	1,848,142	$	803,266		$	962,329	$	1,391,749		$	1,826,742
Cost of sales		646,454		636,610		1,241,811		1,211,638
Cost of sales (excluding store impairment)										565,228			646,454		1,127,340			1,241,811
Store impairment										—			—		14,528			—
Gross profit		315,875		355,844		584,931		636,504		238,038			315,875		249,881			584,931
Selling, general and administrative expenses		237,814		238,992		466,850		465,756		168,619			237,814		379,197			466,850
Income from operations		78,061		116,852		118,081		170,748
Other income, net		3,498		1,746		6,178		1,826
Income before income taxes		81,559		118,598		124,259		172,574
Income tax expense		21,239		25,789		31,354		38,505
Net income	$	60,320	$	92,809	$	92,905	$	134,069
Net income per common share:
Income (loss) from operations										69,419			78,061		(129,316	)		118,081
Other (loss) income, net										(533	)		3,498		(371	)		6,178
Income (loss) before income taxes										68,886			81,559		(129,687	)		124,259
Income tax expense (benefit)										34,486			21,239		(25,645	)		31,354
Net income (loss)									$	34,400		$	60,320	$	(104,042	)	$	92,905
Net income (loss) per common share:
Basic	$	0.61	$	0.85	$	0.91	$	1.23	$	0.35		$	0.61	$	(1.06	)	$	0.91
Diluted	$	0.61	$	0.84	$	0.91	$	1.22	$	0.35		$	0.61	$	(1.06	)	$	0.91
Weighted-average common shares outstanding:
Basic		99,095,562		108,831,399		101,722,244		108,663,990		97,778,749			99,095,562		97,843,796			101,722,244
Diluted		99,602,465		110,433,840		102,427,040		110,091,586		98,104,918			99,602,465		97,843,796			102,427,040

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

Three Months Ended

Six Months Ended

July 31,

July 31,

2019

2018

2019

2018

Net income

$
60,320

$
92,809

$
92,905

$
134,069

Other comprehensive loss:

Foreign currency translation

(6,771
)

(7,881
)

(10,571
)

(15,850
)
Change in unrealized gains (losses) on marketable securities, net of tax

201

(7
)

387

(100
)
Total other comprehensive loss

(6,570
)

(7,888
)

(10,184
)

(15,950
)
Comprehensive income

$
53,750

$
84,921

$
82,721

$
118,119

	Three Months Ended						Six Months Ended
	July 31,						July 31,
	2020			2019			2020			2019
Net income (loss)	$	34,400		$	60,320		$	(104,042	)	$	92,905
Other comprehensive income (loss):
Foreign currency translation		11,765			(6,771	)		(852	)		(10,571	)
Change in unrealized (losses) gains on marketable securities, net of tax		(43	)		201			(347	)		387
Total other comprehensive income (loss)		11,722			(6,570	)		(1,199	)		(10,184	)
Comprehensive income (loss)	$	46,122		$	53,750		$	(105,241	)	$	82,721

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

												Accumulated																Accumulated
	Common Shares					Additional						Other						Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained			Comprehensive						Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings			Loss			Total			Shares			Value		Capital			Earnings		Loss			Total
Balances as of April 30, 2019		103,599,364		$	10	$	—		$	1,478,678		$	(30,717	)	$	1,447,971
Balances as of April 30, 2020																			97,777,322		$	10	$	3,593		$	1,335,430	$	(40,925	)	$	1,298,108
Comprehensive income		—			—		—			60,320			(6,570	)		53,750			—			—		—			34,400		11,722			46,122
Share-based compensation		—			—		5,908			—			—			5,908			—			—		6,385			—		—			6,385
Share-based awards		5,000			—		—			—			—			—			3,334			—		—			—		—			—
Share repurchases		(5,639,352	)		—		(5,908	)		(140,317	)		—			(146,225	)		(1,070	)		—		(22	)		—		—			(22	)
Balances as of July 31, 2019		97,965,012		$	10	$	—		$	1,398,681		$	(37,287	)	$	1,361,404
Balances as of July 31, 2020																			97,779,586		$	10	$	9,956		$	1,369,830	$	(29,203	)	$	1,350,593

											Accumulated																	Accumulated
	Common Shares					Additional					Other						Common Shares					Additional						Other
	Number of			Par		Paid-in			Retained		Comprehensive						Number of			Par		Paid-in			Retained			Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total			Shares			Value		Capital			Earnings			Loss			Total
Balances as of April 30, 2018		108,670,688		$	11	$	6,434		$	1,358,683	$	(18,713	)	$	1,346,415
Balances as of April 30, 2019																		103,599,364		$	10	$	—		$	1,478,678		$	(30,717	)	$	1,447,971
Comprehensive income		—			—		—			92,809		(7,888	)		84,921			—			—		—			60,320			(6,570	)		53,750
Share-based compensation		—			—		5,466			—		—			5,466			—			—		5,908			—			—			5,908
Share-based awards		300,328			—		7,747			—		—			7,747			5,000			—		—			—			—			—
Share repurchases		(19,708	)		—		(877	)		—		—			(877	)		(5,639,352	)		—		(5,908	)		(140,317	)		—			(146,225	)
Balances as of July 31, 2018		108,951,308		$	11	$	18,770		$	1,451,492	$	(26,601	)	$	1,443,672
Balances as of July 31, 2019																		97,965,012		$	10	$	—		$	1,398,681		$	(37,287	)	$	1,361,404

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

													Accumulated																	Accumulated
	Common Shares						Additional						Other						Common Shares					Additional						Other
	Number of			Par			Paid-in			Retained			Comprehensive						Number of			Par		Paid-in			Retained			Comprehensive
	Shares			Value			Capital			Earnings			Loss			Total			Shares			Value		Capital			Earnings			Loss			Total
Balances as of January 31, 2019		105,642,283		$	11		$	—		$	1,516,190		$	(27,103	)	$	1,489,098
Comprehensive income		—			—			—			92,905			(10,184	)		82,721
Balances as of January 31, 2020																				97,976,815		$	10	$	9,477		$	1,473,872		$	(28,004	)	$	1,455,355
Comprehensive (loss)																				—			—		—			(104,042	)		(1,199	)		(105,241	)
Share-based compensation		—			—			11,461			—			—			11,461			—			—		11,257			—			—			11,257
Share-based awards		568,989			—			974			—			—			974			440,508			—		—			—			—			—
Share repurchases		(8,246,260	)		(1	)		(12,435	)		(210,414	)		—			(222,850	)		(637,737	)		—		(10,778	)		—			—			(10,778	)
Balances as of July 31, 2019		97,965,012		$	10		$	—		$	1,398,681		$	(37,287	)	$	1,361,404
Balances as of July 31, 2020																				97,779,586		$	10	$	9,956		$	1,369,830		$	(29,203	)	$	1,350,593

											Accumulated																		Accumulated
	Common Shares					Additional					Other						Common Shares						Additional						Other
	Number of			Par		Paid-in			Retained		Comprehensive						Number of			Par			Paid-in			Retained			Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total			Shares			Value			Capital			Earnings			Loss			Total
Balances as of January 31, 2018		108,248,568		$	11	$	684		$	1,310,859	$	(10,651	)	$	1,300,903
Balances as of January 31, 2019																		105,642,283		$	11		$	—		$	1,516,190		$	(27,103	)	$	1,489,098
Comprehensive income		—			—		—			134,069		(15,950	)		118,119			—			—			—			92,905			(10,184	)		82,721
Share-based compensation		—			—		10,990			—		—			10,990			—			—			11,461			—			—			11,461
Share-based awards		860,758			—		13,020			—		—			13,020			568,989			—			974			—			—			974
Cumulative effect of change in accounting pronouncements		—			—		—			6,564		—			6,564
Share repurchases		(158,018	)		—		(5,924	)		—		—			(5,924	)		(8,246,260	)		(1	)		(12,435	)		(210,414	)		—			(222,850	)
Balances as of July 31, 2018		108,951,308		$	11	$	18,770		$	1,451,492	$	(26,601	)	$	1,443,672
Balances as of July 31, 2019																		97,965,012		$	10		$	—		$	1,398,681		$	(37,287	)	$	1,361,404

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

	For the Six Months Ended						Six Months Ended
	July 31,						July 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net income	$	92,905		$	134,069
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(104,042	)	$	92,905
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		55,395			60,158			53,388			55,395
Right-of-use asset amortization		94,173			—
Provision (benefit) for deferred income taxes		1,107			(9,506	)
Non-cash lease expense								97,655			94,173
(Benefit) provision for deferred income taxes								(17,074	)		1,107
Share-based compensation expense		11,461			10,990			11,257			11,461
Store impairment								14,528			—
Loss on disposition of property and equipment, net		593			2,452			679			593
Changes in assets and liabilities:
Receivables		(15,032	)		(14,196	)		27,912			(15,032	)
Inventory		(71,899	)		(26,807	)		58,002			(71,899	)
Prepaid expenses and other assets		(23,121	)		(10,086	)		(62,170	)		(23,121	)
Payables, accrued expenses and other liabilities		16,009			71,728			94,196			16,009
Operating lease liabilities		(100,338	)		—			(59,115	)		(100,338	)
Net cash provided by operating activities		61,253			218,802			115,216			61,253
Cash flows from investing activities:
Cash paid for property and equipment		(116,465	)		(55,642	)		(72,103	)		(116,465	)
Cash paid for marketable securities		(235,094	)		(168,823	)		(92,949	)		(235,094	)
Sales and maturities of marketable securities		320,411			130,029			383,056			320,411
Net cash used in investing activities		(31,148	)		(94,436	)
Net cash provided by (used in) investing activities								218,004			(31,148	)
Cash flows from financing activities:
Borrowings under long-term debt								220,000			—
Repayments of long-term debt								(100,000	)		—
Proceeds from the exercise of stock options		974			13,020			—			974
Share repurchases related to share repurchase program		(217,421	)		—			(7,036	)		(217,421	)
Share repurchases related to taxes for share-based awards		(5,429	)		(5,924	)		(3,742	)		(5,429	)
Net cash (used in) provided by financing activities		(221,876	)		7,096
Net cash provided by (used in) financing activities								109,222			(221,876	)
Effect of exchange rate changes on cash and cash equivalents		(4,471	)		(7,955	)		(1,421	)		(4,471	)
(Decrease) increase in cash and cash equivalents		(196,242	)		123,507			441,021			(196,242	)
Cash and cash equivalents at beginning of period		358,260			282,220			221,839			358,260
Cash and cash equivalents at end of period	$	162,018		$	405,727		$	662,860		$	162,018
Supplemental cash flow information:
Cash paid during the year for:
Income taxes	$	37,839		$	39,698		$	11,287		$	37,839
Non-cash investing activities—Accrued capital expenditures	$	22,325		$	15,002		$	2,710		$	22,325

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

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, ~~2019,~~2020, filed with the United States Securities and Exchange Commission on ~~April 1, 2019.~~March 31, 2020.

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 six months ended July 31, ~~2019~~2020 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 ~~2020~~2021 will end on January 31, ~~2020.~~2021.

2. Historically, the Company has calculated its provision for income taxes during its interim reporting periods by applying an estimate of the annual effective tax rate for the full year "ordinary" income or loss for the respective reporting period. For the six months ended July 31, 2020, the Company has computed its provision for income taxes under the discrete method which allows the Company to calculate its tax provision based upon the actual effective tax rate for the year-to-date. The discrete method was determined to be an appropriate method for estimating its tax provision for the six months ended July 31, 2020 as it provides a reliable estimate as opposed to changes in estimated "ordinary" income or loss which would have resulted in significant fluctuations when estimating the annual effective tax rate.

~~In February 2016,~~The Company has considered all new accounting standards updates issued by the Financial Accounting Standards Board (“FASB”) ~~issued an~~and has concluded that there are no recent accounting ~~standards update~~standard updates that amends the existing accounting standards for lease accounting. This update requires lessees to recognize a right-of-use asset and lease liability for both operating and finance leases. The Company adopted the new guidance on February 1, 2019 using a modified retrospective approach at the beginning of the period of adoption.The Company elected the “package of three” practical expedients and did not reassess expired or existing leases as of the effective date. The Company also elected the practical expedient to not separate non-lease components from lease components as it pertains to real estate leases. Adoption on February 1, 2019 resulted in the recognition of approximately $1.3 billion of lease liabilities based on the present value of the remaining minimum rental payments using discount rates as of the effective date. Corresponding right-of-use assets of approximately $1.1 billion were recognized, with the offsetting balance representing a reduction in the previously recognized deferred rent balance. Adoption did not result inwill have a material impact on its consolidated financial statements and related disclosures.

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide, causing public health officials to recommend precautions to mitigate the spread of the virus, including warning against congregating in heavily populated areas, such as malls and shopping centers. On March 14, 2020, the Company announced that it temporarily closed all stores globally; however, the Company continued to fulfill digital orders from its stores where permitted by local authorities. The Company’s distribution and fulfillment centers remained open to support the digital business and the Wholesale segment operations but have done so with additional safety procedures and enhanced cleaning to protect the health of employees. The Company closed its offices and showrooms globally with the exception of location dependent employees. All other corporate and showroom employees are working remotely. The coronavirus pandemic continues to materially impact the Company’s ~~Consolidated Statements~~operations in the United States and globally, and related government and private sector responsive actions have and will continue to affect its business operations. Because it is impossible to predict the effect and ultimate impact of ~~Income or Consolidated Statements of Cash Flows.~~the coronavirus pandemic, current

financial information may not be necessarily indicative of future operating results and the Company’s plans as described below may change.

In response to the coronavirus pandemic, the Company has taken many additional measures to protect its financial position and increase financial flexibility during this challenging time period. Those include:

As a result of the coronavirus pandemic, during the six months ended July 31, 2020, the Company recorded certain additional reserves and non-cash charges. The Company assessed the value of its inventory in the Retail and Wholesale segments and recorded an increase in inventory obsolescence reserves during the three months ended April 30, 2020. As a result of disciplined inventory control and better than planned product performance, during the three months ended July 31, 2020, the Company reduced its inventory obsolescence reserves. During the three months ended April 30, 2020, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment. During the three months ended July 31, 2020, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables. Finally, during the three months ended April 30, 2020, the Company determined that certain long-lived assets at the Company’s retail locations were unable to recover their carrying value primarily due to the impact of the mandated store closures and anticipated reduced store net sales during the remainder of fiscal 2021 as a result of the coronavirus pandemic. These assets were written down to their fair value resulting in impairment charges across 39 retail locations. There were 0 store impairment charges during the three months ended July 31, 2020. The following is a summary of net charges recorded during fiscal 2021:

three months ended July 31, 2020. The Company continued to pay all employees through at least April 1, 2020. On March 31, 2020, the Company announced it furloughed a substantial number of store, wholesale and home office employees beginning April 1, 2020. The furlough period continued through July 31, 2020, with some furloughs resulting in layoffs as of the same date. Impacted employees continued to receive enrolled benefits during the furlough period.

Beginning April 25, 2020, the Company started to reopen stores in select states and countries in accordance with local government guidelines. As of July 31, 2020, the Company reopened substantially allof its stores globally as states and countries permitted the reopening of retail operations. A summary of the number of stores open by brand and geography was as follows:

	April 30,		May 31,		June 30,		July 31,
	2020		2020		2020		2020
Urban Outfitters
North America		2		108		182		186
Europe		5		24		54		55
Urban Outfitters Global Total		7		132		236		241
Anthropologie Group
North America		5		122		209		209
Europe		—		5		21		21
Anthropologie Group Global Total		5		127		230		230
Free People
North America		2		72		135		135
Europe		—		2		4		4
Free People Global Total		2		74		139		139
Total		14		333		605		610

Contract receivables occur when the Company satisfies all of its performance obligations under a contract and recognizes revenue prior to billing or receiving consideration from a customer for which it has an unconditional right to payment. Contract receivables arise from credit card transactions and sales to the Company’s Wholesale segment customers and franchisees. For the six month period ended July 31, 2020, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $88,288 and $60,441, respectively. For the six month period ended July 31, 2019, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $80,461 and $95,131, respectively. ~~For~~During the ~~six month period~~three months ended July 31, ~~2018,~~2020, the ~~opening and closing balances of contract receivables, net of~~Company reduced the allowance for doubtful accounts ~~were $76,962 and $90,646, respectively.~~by $2,200 due to the collection of certain outstanding receivable balances, resulting in a net increase in the allowance for doubtful accounts of $3,600 million for the six months ended July 31, 2020. 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, 2020, the opening and closing balances of contract liabilities were $52,926 and $47,709, respectively. For the six month period ended July 31, 2019, the opening and closing balances of contract liabilities were $49,747 and $41,585, ~~respectively. For the six month period ended July 31, 2018, the opening and closing balances of contract liabilities were $56,637 and $32,013,~~ 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, 2020, the Company recognized $18,781 of revenue that was included in the contract liability balance at the beginning of the period. During the six month period ended July 31, 2019, the Company recognized $23,081 of revenue that was included in the contract liability balance at the beginning of the period.

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 July 31, ~~2019,~~2020, January 31, ~~2019~~2020 and July 31, ~~2018~~2019 were as follows:

	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
As of July 31, 2019
As of July 31, 2020
Short-term Investments:
Corporate bonds	$	125,943	$	190	$	(31	)	$	126,102	$	291	$	—	$	—		$	291
Municipal and pre-refunded municipal bonds		42,023		40		(9	)		42,054		210		—		—			210
Certificates of deposit		1,745		—		—			1,745
Federal government agencies		1,495		2		—			1,497
		171,206		232		(40	)		171,398		501		—		—			501
Long-term Investments:
Mutual funds, held in rabbi trust											8,767		365		—			9,132
Corporate bonds		49,385		174		(33	)		49,526		30		—		—			30
Municipal and pre-refunded municipal bonds		19,526		6		(50	)		19,482		53		1		—			54
Mutual funds, held in rabbi trust		7,826		56		(7	)		7,875
Certificates of deposit		1,847		—		—			1,847
Federal government agencies		126		1		—			127
		78,710		237		(90	)		78,857		8,850		366		—			9,216
	$	249,916	$	469	$	(130	)	$	250,255	$	9,351	$	366	$	—		$	9,717
As of January 31, 2019
As of January 31, 2020
Short-term Investments:
Corporate bonds	$	227,287	$	24	$	(214	)	$	227,097	$	166,790	$	318	$	(26	)	$	167,082
Municipal and pre-refunded municipal bonds		43,677		15		(18	)		43,674		38,617		20		(11	)		38,626
Certificates of deposit		1,050		—		—			1,050		2,593		—		—			2,593
Federal government agencies		1,458		—		—			1,458		1,152		3		—			1,155
Commercial paper		2,979		—		—			2,979		1,997		—		—			1,997
Treasury bills		2,975		—		(1	)		2,974
		279,426		39		(233	)		279,232		211,149		341		(37	)		211,453
Long-term Investments:
Mutual funds, held in rabbi trust											8,448		36		(55	)		8,429
Corporate bonds		34,265		34		(63	)		34,236		47,352		205		(40	)		47,517
Municipal and pre-refunded municipal bonds		7,554		7		(3	)		7,558		30,340		35		(17	)		30,358
Mutual funds, held in rabbi trust		6,301		450		—			6,751
Certificates of deposit		2,143		—		—			2,143		3,867		—		—			3,867
Federal government agencies		6,603		2		(1	)		6,604		6,926		1		(2	)		6,925
		56,866		493		(67	)		57,292		96,933		277		(114	)		97,096
	$	336,292	$	532	$	(300	)	$	336,524	$	308,082	$	618	$	(151	)	$	308,549

	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
As of July 31, 2018
As of July 31, 2019
Short-term Investments:
Corporate bonds	$	150,648	$	—	$	(261	)	$	150,387	$	125,943	$	190	$	(31	)	$	126,102
Municipal and pre-refunded municipal bonds		46,904		10		(43	)		46,871		42,023		40		(9	)		42,054
Certificates of deposit		908		—		—			908		1,745		—		—			1,745
Federal government agencies											1,495		2		—			1,497
		198,460		10		(304	)		198,166		171,206		232		(40	)		171,398
Long-term Investments:
Mutual funds, held in rabbi trust											7,826		56		(7	)		7,875
Corporate bonds		34,333		—		(213	)		34,120		49,385		174		(33	)		49,526
Municipal and pre-refunded municipal bonds		2,130		1		(7	)		2,124		19,526		6		(50	)		19,482
Mutual funds, held in rabbi trust		6,401		171		(1	)		6,571
Certificates of deposit		2,699		—		—			2,699		1,847		—		—			1,847
Federal government agencies											126		1		—			127
		45,563		172		(221	)		45,514		78,710		237		(90	)		78,857
	$	244,023	$	182	$	(525	)	$	243,680	$	249,916	$	469	$	(130	)	$	250,255

Proceeds from the sales and maturities of available-for-sale securities were ~~$320,411~~$383,056 and ~~$130,029~~$320,411 for the six months ended July 31, 2020 and 2019, respectively. Net liquidations of the Company’s marketable securities portfolio in the six months ended July 31, 2020 were primarily to preserve financial flexibility and ~~2018, respectively.~~maintain liquidity in response to the coronavirus pandemic. The Company included in “Other (loss) income, net,” in the Condensed Consolidated Statements of ~~Income,~~Operations, a net realized gain of $34 and a net realized loss of $420 for the three and six months ended July 31, 2020, respectively, and net realized gainsof $19 and $26 for the three and six months ended July 31, 2019, ~~respectively, and net realized losses of $0 and $13 for the three and six months ended July 31, 2018,~~ respectively. Amortization of discounts and premiums, net, resulted in a reduction of “Other (loss) income, net” of $208 and $617 for the three and six months ended July 31, 2020, respectively, and $152 and $271 for the three and six months ended July 31, 2019, ~~respectively, and $517 and $1,151 for the three and six months ended July 31, 2018,~~ respectively. Mutual funds represent assets held in an irrevocable rabbi trust for the Company’s Non-qualified Deferred Compensation Plan (“NQDC”). These assets are a source of funds to match the funding obligations to participants in the NQDC but are subject to the Company’s general creditors. The Company elected the fair value option for financial assets for the mutual funds held in the rabbi trust resulting in all unrealized gains and losses being recorded in “Other (loss) income, net” in the Condensed Consolidated Statements of ~~Income.~~Operations.

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:

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

	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	July 31, 2019								July 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Mutual funds, held in rabbi trust									$	9,132	$	—	$	—	$	9,132
Corporate bonds	$	175,628	$	—	$	—	$	175,628		321		—		—		321
Municipal and pre-refunded municipal bonds		—		61,536		—		61,536		264		—		—		264
Mutual funds, held in rabbi trust		7,875		—		—		7,875
Certificates of deposit		—		3,592		—		3,592
Federal government agencies		1,624		—		—		1,624
	$	185,127	$	65,128	$	—	$	250,255	$	9,717	$	—	$	—	$	9,717

	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	January 31, 2019								January 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Mutual funds, held in rabbi trust									$	8,429	$	—	$	—	$	8,429
Corporate bonds	$	261,333	$	—	$	—	$	261,333		214,599		—		—		214,599
Municipal and pre-refunded municipal bonds		—		51,232		—		51,232		—		68,984		—		68,984
Mutual funds, held in rabbi trust		6,751		—		—		6,751
Federal government agencies										8,080		—		—		8,080
Certificates of deposit		—		3,193		—		3,193		—		6,460		—		6,460
Federal government agencies		8,062		—		—		8,062
Commercial paper		—		2,979		—		2,979		—		1,997		—		1,997
Treasury bills		2,974		—		—		2,974
	$	279,120	$	57,404	$	—	$	336,524	$	231,108	$	77,441	$	—	$	308,549

	Marketable Securities Fair Value as of								Marketable Securities Fair Value as of
	July 31, 2018								July 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Mutual funds, held in rabbi trust									$	7,875	$	—	$	—	$	7,875
Corporate bonds	$	184,507	$	—	$	—	$	184,507		175,628		—		—		175,628
Municipal and pre-refunded municipal bonds		—		48,995		—		48,995		—		61,536		—		61,536
Mutual funds, held in rabbi trust		6,571		—		—		6,571
Federal government agencies										1,624		—		—		1,624
Certificates of deposit		—		3,607		—		3,607		—		3,592		—		3,592
	$	191,078	$	52,602	$	—	$	243,680	$	185,127	$	65,128	$	—	$	250,255

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 July 31, ~~2019,~~2020, January 31, ~~2019~~2020 and July 31, ~~2018.~~2019.

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 July 31, ~~2019,~~2020, January 31, ~~2019~~2020 and July 31, ~~2018,~~2019, 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.

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

The fair value of property and equipment was determined using a discounted cash-flow model that utilized Level 3 inputs. The Company’s retail locations are reviewed for impairment at the retail location level, which is the lowest level at which individual cash flows can be identified. In calculating future cash flows, the Company makes estimates regarding future operating results based on its experience and knowledge of market factors in which the retail location is located. Right-of-use assets are tested for impairment in the same manner as property and equipment. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company evaluates goodwill to determine if the carrying value exceeds the fair value of the reporting unit. ~~For~~During the three months ended April 30, 2020, the Company determined that certain long-lived assets at the Company’s retail locations were unable to recover their carrying value primarily due to the impact of the mandated store closures and anticipated reduced store net sales during the remainder of fiscal 2021 as a result of the coronavirus pandemic. These assets were written down to their fair value resulting in impairment charges of $14,528 across 39 retail locations, with a carrying value after impairment of $96,523 related to the right-of-use assets. During the three months ended July 31, 2020, impairment charges were 0. During the three and six months ended July 31, 2019, ~~and 2018,~~ impairment charges were 0.

On June 29, 2018, the Company and its domestic subsidiaries entered into an amended and restated credit agreement (the “Amended Credit Agreement”) that amended the Company’s asset-based revolving credit facility with certain lenders, including JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as joint lead arrangers and co-book managers.

The Amended Credit Agreement extended the maturity date of the senior secured revolving credit facility to June 2023 (the “Amended Credit Facility”). The Amended Credit Facility provides for loans and letters of credit up to $350,000, subject to a borrowing base that is comprised of the Company’s eligible accounts receivable and inventory. The Amended Credit Facility 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 under the Amended Credit Facility may be used for working capital and other general corporate purposes.

The Amended Credit Facility provides for interest on borrowings, at the Company’s option, at either (i) adjusted LIBOR, CDOR or EURIBOR plus an applicable margin ranging from 1.125% to 1.375%, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125% to 0.375%, each such applicable margin depending on the level of availability under the Amended Credit Facility. Currently, there has not been a replacement reference rate identified for LIBOR in the Amended Credit Facility.Depending on the type of borrowing, interest on the Amended Credit Agreement is payable monthly, quarterly or at the end of the interest period. A commitment fee of 0.20% is payable quarterly on the unused portion of the Amended Credit Facility.

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

As of July 31, ~~2019,~~2020, the Company had $120,000 in borrowings under the Amended Credit Facility, which the Company borrowed during the six months ended July 31, 2020 in order to preserve financial flexibility and maintain liquidity and flexibility in response to the coronavirus pandemic. The Company intends to use the proceeds in the future for working capital, capital expenditure, general corporate or other purposes. As of the month ended May 31, 2020, the availability under the Amended Credit Agreement reduced to a level that triggered the Fixed Charge Coverage Ratio covenant to be measured. Due to the net loss of the Company in fiscal 2021, the Fixed Charge Coverage Ratio was not met and the Company obtained a waiver effective through September 15, 2020 to cure the technical default. As of July 31, 2020, the Company was in compliance with ~~all~~the terms of the Amended Credit Agreement. The Company expects to maintain the necessary availability under the Amended Credit Agreement to not trigger the Fixed Charge Coverage Ratio covenant going forward and remain in compliance with all terms, including other covenants, of the Amended Credit Agreement. Because the Fixed Charge Coverage Ratio was not met as described above, resulting in the technical default, the Company has determined the classification of the $220,000 of borrowings under the Amended Credit Facility ~~totaled $0.~~as of April 30, 2020 should have been classified as a current liability on its April 30, 2020 Condensed Consolidated Balance Sheet. While the Company has concluded the reclassification is not material, the Company plans to correct the April 30, 2020 classification for comparative purposes when it files its Form 10-Q for the fiscal period ending April 30, 2021. Outstanding stand-by letters of credit, which reduce the funds available under the Amended Credit Facility, were ~~$13,704.~~$13,399. Interest expense for the six months ended July 31, 2020, was $1,976, which was included in “Other (loss) income, net,” in the Condensed Consolidated Statements of Operations.

Additionally, the Company has borrowing agreements with 2 separate financial institutions under which the Company may borrow ~~an aggregate of $130,000~~ for the purposes of trade letter of credit issuances. The availability

of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions. As of July 31, ~~2019,~~2020, the Company had outstanding trade letters of credit of ~~$83,875~~$53,389 and available trade letters of credit of ~~$46,125~~$41,611 under these facilities.

On June 8, 2020, the Company’s aggregate borrowing limit for purposes of trade letter of credit issuances was reduced from $130,000 to $95,000 and was reduced again on August 1, 2020 to $70,000. The reductions were made to align the amount of available trade letters of credit with the Company’s usage. The Company does not expect the reduction of available trade letters of credit to have an impact on its liquidity.

The Company has operating leases for stores, distribution and fulfillment centers, corporate offices and equipment. The Company subleases certain properties to third parties. The Company has elected not to record a lease liability and right-of-use asset for leases with original terms of 12 months or less. The Company has elected the practical expedient to not separate non-lease components from lease components as it pertains to real estate leases.

Store leases have remaining lease terms that range from less than one year up to 15 years, some of which contain options to extend the lease for one or two 5-year periods. Payments related to a renewal period are included in the lease liability and right-of-use asset only when the Company is reasonably certain that it will exercise the option to renew the lease for an extended period of time. Certain leases may contain variable lease payments such as rent based on a percentage of net sales. Variable lease payments may be subject to a breakpoint threshold of fixed rent. Variable lease payments, other than those that depend on an index or a rate, are not included in the measurement of the lease liability. The lease liability is calculated at the present value of certain future payments, discounted using the Company’s incremental borrowing rate, which approximates the rate of interest the Company would pay to borrow an amount equal to the lease payments on a fully collateralized basis over a similar term. Significant judgment is used in determining the incremental borrowing rate.

Total operating lease costs were $69,183 and $137,193 during the three and six months ended July 31, 2020, respectively, and $67,827 and $134,075 during the three and six months ended July 31, 2019, respectively. Total variable lease costs were ~~$16,770~~$23,154 and ~~$34,709~~$51,594 during the three and six months ended July 31, 2020, respectively, and $31,554 and $64,431 during the three and six months ended July 31, 2019, respectively. Short-term lease costs and sublease income were not material during the three and six months ended July 31, 2020 and July 31, 2019.

The following is a schedule by year of the maturities of operating lease liabilities with original terms in excess of one year, as of July 31, ~~2019:~~2020:

	Operating			Operating
	Leases		��	Leases
Fiscal Year
2020 (excluding the six months ended July 31, 2019)	$	147,926
2021		275,325
2021 (excluding the six months ended July 31, 2020)				$	203,340
2022		241,618			282,277
2023		214,691			248,641
2024		181,685			218,713
2025					182,810
Thereafter		673,472			622,924
Total undiscounted future minimum lease payments		1,734,717			1,758,705
Less imputed interest		(435,022	)		(386,129	)
Total discounted future minimum lease payments	$	1,299,695		$	1,372,576

As of July 31, ~~2019,~~2020, the Company had commitments of approximately ~~$32,736~~$17,367 not included in the amounts above related to 8 executed but not yet commenced store leases.

~~The following is a schedule by year of~~In response to the ~~future~~coronavirus pandemic and mandated store closures, the Company withheld certain minimum lease payments ~~for~~due to landlords. The amount withheld at July 31, 2020 was included in “Current portion of operating ~~leases with original terms~~lease liabilities” in ~~excess of one year, as of January 31, 2019:~~the Condensed Consolidated Balance Sheets.

The Company ~~through~~has been in discussion with its ~~wholly-owned subsidiary, Anthropologie, Inc., is party~~landlords to obtain rent concessions. To the extent the rent concessions do not result in a ~~ground~~substantial increase in total payments in the existing lease, (the “Lease”) with Waterloo Devon, L.P. (the “Landlord”). Wade L. McDevitt was a minority owner of the Landlord and its general partner and is the brother-in-law of Scott Belair, one of the Company’s former directors. Pursuant to the Lease, the Company ~~rented approximately six acres located~~will account for such rent concessions as negative variable rent. To the extent the rent concessions do result in ~~Devon, Pennsylvania to develop~~ a ~~lifestyle center, which includes an expanded format Anthropologie store, a Terrain store, several restaurant concepts under~~substantial increase in total payments in the Food and Beverage division and a boutique event space. The Lease, which commenced on June 14, 2017, has an initial term of 40 years with 2 options to extend, each for an additional ten-year term. The initial rental rate is $1,087 per year, and rent increases 10% every five years during the initial term. The aggregate amount of rental payments payable under the initial term of the Lease is approximately $62,135. Real estate taxes, insurance, construction costs and other third-party expenses will also be paid by the Company. Ifexisting lease, the Company ~~exercises its option to extend the Lease, rental payments during~~will account for such ~~extension term will be 90% of the market rental rate. An independent committee of the Board of Directors retained~~rent concessions as a national commercial real estate services firm to provide an appraisal of the initial market rental value of a portion of the property, which confirmed that the proposed initial rental rate per acre was consistent with market rates. The Lease and appraisal were reviewed by a committee of disinterested members of the Company’s Board of Directors and the Lease was approved by such committee and by the Company’s Board of Directors.lease modification.

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”), performance stock units (“PSU’s”) or stock appreciation rights (“SAR’s”). A Black-Scholes model was used to estimate the fair value of stock options. The fair value of PSU’s and RSU’s is equal to the stock price on the date of the grant. The fair value of the PSU’s awarded during fiscal 2020 equaled the stock price on the date of the grant. The fair value of the PSU’s awarded during fiscal 2019 was determined using a Monte Carlo simulation. A different methodology was used to value fiscal 2020 grants due to the removal of market-based conditions in the grant provisions. Share-based compensation expense included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of ~~Income,~~Operations, for the three and six months ended July 31, ~~2019~~2020 and ~~2018~~2019, was as follows:

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	July 31,				July 31,				July 31,				July 31,
	2019		2018		2019		2018		2020		2019		2020		2019
Stock Options	$	453	$	429	$	1,038	$	646	$	129	$	453	$	471	$	1,038
Stock Appreciation Rights		—		—		—		4
Performance Stock Units		1,134		1,549		2,211		3,570
Performance Stock Units⁽¹⁾										894		1,134		1,044		2,211
Restricted Stock Units		4,321		3,488		8,212		6,770		5,362		4,321		9,742		8,212
Total	$	5,908	$	5,466	$	11,461	$	10,990	$	6,385	$	5,908	$	11,257	$	11,461

Share-based awards granted and the weighted-average fair value of such awards for the six months ended July 31, ~~2019~~2020 was as follows:

	Six Months Ended				Six Months Ended
	July 31, 2019				July 31, 2020
			Weighted-				Weighted-
	Awards		Average Fair		Awards		Average Fair
	Granted		Value		Granted		Value
Stock Options		160,000	$	8.67		—	$	—
Stock Appreciation Rights		—	$	—
Performance Stock Units		140,000	$	30.19		154,000	$	25.84
Restricted Stock Units		855,000	$	30.02		898,100	$	25.29
Total		1,155,000				1,052,100

During the six months ended July 31, ~~2019, 40,000 stock options were exercised, 139,999~~2020, 113,331 PSU’s vested and ~~388,990~~327,177 RSU’s 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 July 31, ~~2019~~2020 was as follows:

	July 31, 2019				July 31, 2020
	Unrecognized		Weighted-		Unrecognized		Weighted-
	Compensation		Average		Compensation		Average
	Cost		Years		Cost		Years
Stock Options	$	1,171		0.8	$	—		—
Stock Appreciation Rights		—		—
Performance Stock Units		6,794		2.1		5,922		2.2
Restricted Stock Units		33,436		2.3		34,706		2.1
Total	$	41,401			$	40,628

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

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	July 31,				July 31,				July 31,				July 31,
	2019		2018		2019		2018		2020		2019		2020		2019
Number of common shares repurchased and subsequently retired		5,637,369		—		8,068,196		—		—		5,637,369		482,003		8,068,196
Total cost	$	146,180	$	—	$	217,422	$	—	$	—	$	146,180	$	7,036	$	217,421
Average cost per share, including commissions	$	25.93	$	—	$	26.95	$	—	$	—	$	25.93	$	14.60	$	26.95

The shares repurchased during the six months ended July 31, 2020 were prior to the known spread of the coronavirus pandemic in the United States, which forced the Company to close its stores for an extended period of time. On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20,000,000 common shares under a share repurchase program. On 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. AsWhile, as of July 31, ~~2019, 26,333,957~~2020, 25,851,954 common shares were remaining under the programs, the Company has temporarily suspended all share repurchase activity under the programs.

During the six months ended July 31, 2020, the Company acquired and subsequently retired 155,734 common shares at a total cost of $3,742 from employees to meet minimum statutory tax withholding requirements. During the six months ended July 31, 2019, the Company acquired and subsequently retired 178,064 common shares at a total cost of $5,429 from employees to meet minimum statutory tax withholding requirements. During the six months ended July 31, 2018, the Company acquired and subsequently retired 158,018 common shares at a total cost of $5,924 from employees to meet minimum statutory tax withholding requirements.

The following tables present the changes in “Accumulated other comprehensive loss,” by component, net of tax, for the three and six months ended July 31, ~~2019~~2020 and ~~2018:~~2019:

	Three Months Ended July 31, 2020									Six Months Ended July 31, 2020
				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	$	(40,945	)	$	20		$	(40,925	)	$	(28,328	)	$	324		$	(28,004	)
Other comprehensive income (loss) before reclassifications		11,765			(77	)		11,688			(852	)		73			(779	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			34			34			—			(420	)		(420	)
Net current-period other comprehensive income (loss)		11,765			(43	)		11,722			(852	)		(347	)		(1,199	)
Balance at end of period	$	(29,180	)	$	(23	)	$	(29,203	)	$	(29,180	)	$	(23	)	$	(29,203	)

	Three Months Ended July 31, 2019								Six Months Ended July 31, 2019
				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	$	(30,725	)	$	8	$	(30,717	)	$	(26,925	)	$	(178	)	$	(27,103	)
Other comprehensive income (loss) before reclassifications		(6,771	)		182		(6,589	)		(10,571	)		361			(10,210	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			19		19			—			26			26
Net current-period other comprehensive income (loss)		(6,771	)		201		(6,570	)		(10,571	)		387			(10,184	)
Balance at end of period	$	(37,496	)	$	209	$	(37,287	)	$	(37,496	)	$	209		$	(37,287	)

Three Months Ended July 31, 2018

Six Months Ended July 31, 2018

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

$
(18,309
)

$
(404
)

$
(18,713
)

$
(10,340
)

$
(311
)

$
(10,651
)
Other comprehensive income (loss)
   before reclassifications

(7,881
)

(7
)

(7,888
)

(15,850
)

(87
)

(15,937
)
Amounts reclassified from
   accumulated other comprehensive
   income (loss)

—

—

—

—

(13
)

(13
)
Net current-period other
   comprehensive income (loss)

(7,881
)

(7
)

(7,888
)

(15,850
)

(100
)

(15,950
)
Balance at end of period

$
(26,190
)

$
(411
)

$
(26,601
)

$
(26,190
)

$
(411
)

$
(26,601
)

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

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

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	July 31,				July 31,				July 31,				July 31,
	2019		2018		2019		2018		2020		2019		2020		2019
Basic weighted-average common shares outstanding		99,095,562		108,831,399		101,722,244		108,663,990		97,778,749		99,095,562		97,843,796		101,722,244
Effect of dilutive options, stock appreciation rights, performance stock units and restricted stock units		506,903		1,602,441		704,796		1,427,596
Effect of dilutive options, performance stock units and restricted stock units										326,169		506,903		—		704,796
Diluted weighted-average shares outstanding		99,602,465		110,433,840		102,427,040		110,091,586		98,104,918		99,602,465		97,843,796		102,427,040

For the three months ended July 31, ~~2019~~2020 and ~~2018,~~2019, awards to purchase 560,000 common shares ranging in price from $18.81 to $46.42 and 420,000 common shares ranging in price from $28.47 ~~to $46.42 and 240,000 common shares ranging in price from $46.02~~ to $46.42, respectively, were excluded from the calculation of diluted net income per common share because the impact would be anti-dilutive.~~For~~

As a result of the net loss for the six months ended July 31, ~~2019~~2020, all share-based awards have been excluded from the calculation of diluted loss per share and ~~2018,~~therefore there was no difference in the weighted average number of common shares for basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive. For six months ended July 31, 2019, awards to purchase 400,000 common shares ranging in price from $28.47 to $46.42 ~~and 253,750 common shares ranging in price from $37.02 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 July 31, 2020 and 2019, were 706,794 and ~~2018 were~~ 780,264 ~~and 1,451,382~~ performance-based equity awards, respectively, because they did not meet the required performance criteria.

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.

The Company offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands. The Company operates 3 reportable segments – “Retail,” “Wholesale” and “Subscription.”

The Company’s Retail segment consists of the ~~“Anthropologie,” “Bhldn,” “Free~~Anthropologie, Bhldn, Free People,~~” “Terrain”~~ Terrain, Urban Outfitters and ~~“Urban Outfitters” brands and the Food and Beverage division.~~Menus & Venues brands. The Company has aggregated its brands into the Retail segment based upon their shared management, customer base and economic characteristics. Reporting in this format provides management with the financial information necessary to evaluate the success of the segments and the overall business. The Company’s Retail segment omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available Company-owned Retail segment shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers.

The Company’s Wholesale segment consists of the Free People, Anthropologie and Urban Outfitters brands. The Wholesale segment sells through department and specialty stores worldwide, digital businesses and the Retail segment. The ~~Urban Outfitters~~Company plans for the Anthropologie brand to exit the wholesale ~~division was established in~~business by the end of the third quarter of fiscal ~~2019.~~2021.

The Subscription segment ~~consisting~~consists of the ~~“Nuuly”~~Nuuly brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019. ~~Expenses~~Prior year expenses related to the Subscription segment that were classified as “Retail operations” and “General corporate expenses” ~~in the prior fiscal year~~ have been reclassified to the Subscription segment as a result of the establishment of the Subscription segment in the first quarter of fiscal 2020. Property and equipment related to the Subscription segment have also been reclassified from the Retail segment.

The Company evaluates the performance of each segment based on the net sales and pre-tax income from operations (excluding intercompany charges) of the segment. The Company accounts for intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases. Corporate expenses include expenses incurred and directed by the corporate office that are not allocated to segments. The principal identifiable assets for ~~each reporting~~the Retail and Wholesale segments are inventory and property and equipment. The principal identifiable assets for the Subscription segment are ~~inventory~~rental product and property and equipment.

The accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019. Both~~2020. All of the ~~Retail and Wholesale~~Company’s segments are highly diversified. NaN 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							Three Months Ended						Six Months Ended
	July 31,						July 31,							July 31,						July 31,
	2019			2018			2019			2018				2020			2019			2020			2019
Net sales
Retail operations	$	878,693		$	902,027		$	1,661,256		$	1,677,591			$	757,471		$	878,693		$	1,318,703		$	1,661,256
Wholesale operations		86,153			93,293			170,518			176,234				49,877			86,153			75,589			170,518
Subscription operations															4,672			—			10,942			—
Intersegment elimination		(2,517	)		(2,866	)		(5,032	)		(5,683	)			(8,754	)		(2,517	)		(13,485	)		(5,032	)
Total net sales	$	962,329		$	992,454		$	1,826,742		$	1,848,142			$	803,266		$	962,329		$	1,391,749		$	1,826,742
Income from operations
Income (loss) from operations
Retail operations	$	78,997		$	106,423		$	113,691		$	158,295			$	58,405		$	78,997		$	(77,096	)	$	113,691
Wholesale operations		15,354			19,815			32,115			34,620				14,161			15,354			(31,467	)		32,115
Subscription operations		(3,536	)		(550	)		(5,637	)		(550	)			(4,611	)		(3,536	)		(10,575	)		(5,637	)
Intersegment elimination		312			48			249			82				(84	)		312			(494	)		249
Total segment operating income		91,127			125,736			140,418			192,447
General corporate expenses		(13,066	)		(8,884	)		(22,337	)		(21,699	)
Total income from operations	$	78,061		$	116,852		$	118,081		$	170,748
Total segment operating income (loss)															67,871			91,127			(119,632	)		140,418
General corporate expenses ⁽¹⁾															1,548			(13,066	)		(9,684	)		(22,337	)
Total income (loss) from operations														$	69,419		$	78,061		$	(129,316	)	$	118,081

(1) General corporate expenses during the three and six months ended July 31, 2020 benefitted from the recognition of coronavirus related government relief packages in the three months ended July 31, 2020.													(1) General corporate expenses during the three and six months ended July 31, 2020 benefitted from the recognition of coronavirus related government relief packages in the three months ended July 31, 2020.

	July 31,		January 31,		July 31,			July 31,		January 31,		July 31,
	2019		2019		2018			2020		2020		2019
Inventory
Retail operations	$	376,050	$	328,783	$	328,551		$	321,885	$	347,837	$	376,050
Wholesale operations		64,037		41,724		47,106			29,886		61,697		64,037
Total inventory	$	440,087	$	370,507	$	375,657		$	351,771	$	409,534	$	440,087
Property and equipment, net
Retail operations	$	841,013	$	791,648	$	804,625
Wholesale operations		2,637		2,389		2,459
Rental product, net ⁽¹⁾
Subscription operations		23,784		1,992		—		$	15,764	$	16,447	$	2,913
Total property and equipment, net	$	867,434	$	796,029	$	807,084
Total rental product, net								$	15,764	$	16,447	$	2,913

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

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

		Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
		July 31,						July 31,							July 31,						July 31,
		2019			2018			2019			2018				2020			2019			2020			2019
Net sales
Apparel ⁽¹⁾		$	642,914		$	690,447		$	1,231,640		$	1,290,135			$	507,930		$	642,914		$	878,277		$	1,231,640
Home ⁽²⁾			144,962			135,262			269,510			249,610				156,621			144,962			266,420			269,510
Accessories ⁽³⁾			116,613			118,335			216,881			217,110				89,751			116,613			159,944			216,881
Other ⁽⁴⁾			57,840			48,410			108,711			91,287				48,964			57,840			87,108			108,711
Total net sales		$	962,329		$	992,454		$	1,826,742		$	1,848,142			$	803,266		$	962,329		$	1,391,749		$	1,826,742

As a percentage of net sales
Apparel ⁽¹⁾			67	%		70	%		67	%		70	%			63	%		67	%		63	%		67	%
Home ⁽²⁾			15	%		13	%		15	%		13	%			19	%		15	%		19	%		15	%
Accessories ⁽³⁾			12	%		12	%		12	%		12	%			12	%		12	%		12	%		12	%
Other ⁽⁴⁾			6	%		5	%		6	%		5	%			6	%		6	%		6	%		6	%
Total net sales			100	%		100	%		100	%		100	%			100	%		100	%		100	%		100	%


(1) Apparel includes intimates and activewear	(1) Apparel includes intimates and activewear													(1) Apparel includes intimates and activewear
(2) Home includes home furnishings, electronics, gifts and decorative items	(2) Home includes home furnishings, electronics, gifts and decorative items													(2) Home includes home furnishings, electronics, gifts and decorative items
(3) Accessories includes footwear, jewelry and handbags	(3) Accessories includes footwear, jewelry and handbags													(3) Accessories includes footwear, jewelry and handbags
(4) Other includes beauty, shipping and handling revenues and the Food and Beverage division
(4) Other includes beauty, shipping and handling, the Menus & Venues brand and the Subscription segment														(4) Other includes beauty, shipping and handling, the Menus & Venues brand and the Subscription segment

Apparel, Home, and Accessories are sold through both the Retail and Wholesale segments. Revenue recognized from the Other category is primarily attributable to the Retail segment.

The Company has foreign operations primarily in Europe and Canada. Revenues and long-lived assets, based upon the Company’s domestic and foreign operations, are as follows:

	July 31,		January 31,		July 31,		July 31,		January 31,		July 31,
	2019		2019		2018		2020		2020		2019
Property and equipment, net
Domestic operations	$	774,378	$	723,400	$	730,024	$	722,934	$	763,411	$	774,378
Foreign operations		93,056		72,629		77,060		166,192		126,621		93,056
Total property and equipment, net	$	867,434	$	796,029	$	807,084	$	889,126	$	890,032	$	867,434

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	July 31,				July 31,				July 31,				July 31,
	2019		2018		2019		2018		2020		2019		2020		2019
Net Sales
Domestic operations	$	840,316	$	865,517	$	1,603,405	$	1,612,668	$	709,697	$	840,316	$	1,233,253	$	1,603,405
Foreign operations		122,013		126,937		223,337		235,474		93,569		122,013		158,496		223,337
Total net sales	$	962,329	$	992,454	$	1,826,742	$	1,848,142	$	803,266	$	962,329	$	1,391,749	$	1,826,742

Certain matters contained in this filing with the United States Securities and Exchange Commission (“SEC”) may contain forward-looking statements and are being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: the impacts of public health crises such as the coronavirus (COVID-19) pandemic, 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 economic and market conditions and worldwide political events and the resultant impact on consumer spending patterns, the effects of the implementation of the United Kingdom's ~~referendum to withdraw~~withdrawal from membership ~~from~~in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war, terrorism and civil unrest, natural disasters, or severe or unseasonable weather conditions or public health crises, increases in labor costs, increases in raw material costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, the departure of one or more key senior executives, import risks, changes to U.S. and foreign trade policies, including the enactment of tariffs, border adjustment taxes or increases in duties or quotas, the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, risks associated with digital sales, our ability to maintain and expand our digital sales channels, response to new store concepts, our ability to integrate acquisitions, any material disruptions or security breaches with respect to our technology systems, failure of our manufacturers and third-party vendors to comply with our social compliance program, changes in our effective income tax rate (including the ~~impact of~~uncertainties associated with the U.S. Tax Cuts and Jobs ~~Act,~~Act), 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, ~~2019,~~2020, filed on ~~April 1, 2019.~~March 31, 2020. 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.

We operate under three reportable segments – Retail, Wholesale and Subscription. Our Retail segment consists of our Anthropologie, Bhldn, Free People, Terrain, ~~and~~ Urban Outfitters ~~brands~~ and ~~our Food and Beverage division.~~Menus & Venues brands. Our Retail segment consumer products and services are sold directly to our customers through our stores, websites, mobile applications, catalogs and customer contact centers and franchised or third-party operated stores and digital businesses. The Wholesale segment consists of our Free People, Anthropologie and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and home goods. Our Subscription segment consists of the Nuuly brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019.

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 ~~2020~~2021 will end on January 31, 2021.

enhanced cleaning to protect the health of employees. The Company closed its offices and showrooms globally with the exception of location dependent employees. All other corporate and showroom employees are working remotely. The coronavirus pandemic continues to materially impact the Company’s operations in the United States and globally, and related government and private sector responsive actions have and will continue to affect its business operations. Because it is impossible to predict the effect and ultimate impact of the coronavirus pandemic, current financial information may not be necessarily indicative of future operating results and the Company’s plans as described below may change.

As a result of the coronavirus pandemic, during the six months ended July 31, 2020, the Company recorded certain additional reserves and non-cash charges. The Company assessed the value of its inventory in the Retail and Wholesale segments and recorded an increase in inventory obsolescence reserves during the three months ended April 30, 2020. As a result of disciplined inventory control and better than planned product performance, during the three months ended July 31, 2020, the Company reduced its inventory obsolescence reserves. During the three months ended April 30, 2020, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment. During the three months ended July 31, 2020, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables. Finally, during the three months ended April 30, 2020, the Company determined that certain long-lived assets at the Company’s retail locations were unable to recover their carrying value primarily due to the impact of the mandated store closures and anticipated reduced store net sales during the remainder of fiscal 2021 as a result of the coronavirus pandemic. These assets were written down to their fair value resulting in impairment charges across 39 retail locations. There were no store impairment charges during the three months ended July 31, 2020.

As a result of the global coronavirus pandemic, governments in the United States, United Kingdom (“U.K.”), Canada and various other jurisdictions have implemented programs to encourage companies to retain and pay employees that are unable to work or are limited in the work that they can perform in light of closures or a significant decline in sales. The Company qualified for certain of these programs, which partially offset related expenses and recorded the cumulative benefit in selling, general and administrative expenses during the three months ended July 31, 2020. The Company continued to pay all employees through at least April 1, 2020. On March 31, 2020, the Company announced it furloughed a substantial number of store, wholesale and home office employees beginning April 1, 2020. The furlough period continued through July 31, 2020, with some furloughs resulting in layoffs as of the same date. Impacted employees continued to receive enrolled benefits during the furlough period.

Beginning April 25, 2020, the Company started to reopen stores in select states and countries. When the Company reopened these stores, it did so in accordance with local government guidelines. As of July 31, 2020, the Company had reopened substantially all of its stores globally as states and countries permitted the reopening of retail operations. A summary of the number of stores open by brand and geography was as follows:

	April 30,		May 31,		June 30,		July 31,
	2020		2020		2020		2020
Urban Outfitters
North America		2		108		182		186
Europe		5		24		54		55
Urban Outfitters Global Total		7		132		236		241
Anthropologie Group
North America		5		122		209		209
Europe		—		5		21		21
Anthropologie Group Global Total		5		127		230		230
Free People
North America		2		72		135		135
Europe		—		2		4		4
Free People Global Total		2		74		139		139
Total		14		333		605		610

As we have reopened stores, we have followed newly established health protocols, provided personal protective equipment to our employees, and implemented social distancing working practices. Additionally, we are implementing occupancy limits, reducing operating hours, and instituting new cleaning regimens, including enhanced cleaning of high-touch surfaces throughout the day and making hand sanitizer available to our customers and employees. As a result, the Company is planning on incurring incremental costs going forward for personal protective equipment and additional payroll and supply costs associated with social distancing protocols and cleaning regimens we are putting in place in our stores, distribution and fulfillment centers, and offices. As of July 31, 2020, the Company has not changed its remote work arrangements for its corporate employees.

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, websites, mobile applications, catalogs and customer contact centers. Our investments in areas such as marketing campaigns and technology advancements are designed to generate demand

for the Retail segment omni-channel and not the separate store or digital channels. We manage and analyze our performance based on a single Retail segment omni-channel rather than separate channels and believe that the Retail segment omni-channel results present the most meaningful and appropriate measure of our performance.

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

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

Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, websites and mobile applications ~~through~~and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally and designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores, ~~offers a catalog in Europe offering select merchandise, most of which is also available in its stores,~~ sells merchandise through franchisee-owned stores in Israel and the United Arab Emirates, and partners with third-party digital businesses to offer a limited selection of merchandise, which is available globally. Urban Outfitters’ North American and European Retail segment net sales accounted for approximately ~~29.0%~~31.9% and ~~7.7%~~7.8% of consolidated net sales, respectively, for the six months ended July 31, ~~2019,~~2020, compared to ~~29.8%~~29.0% and ~~8.2%~~7.7%, respectively, for the comparable period in fiscal ~~2019.~~2020. Asian Retail segment net sales accounted for less than 1.0% of consolidated net sales for the six months ended July 31, 2020 and the comparable period in fiscal 2020.

The Anthropologie Group consists of the Anthropologie, Bhldn and Terrain brands. Merchandise at the Anthropologie brand is tailored to sophisticated and contemporary women aged 28 to 45. The product assortment includes women’s casual apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The Bhldn brand emphasizes every element that contributes to 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. In addition to individual brand stores, ~~we operate~~the Anthropologie Group operates expanded format stores that include multiple Anthropologie Group brands, which allows ~~us to present~~for the presentation of an expanded assortment of products in certain categories. Anthropologie Group stores are located in specialty centers, upscale street locations and enclosed malls. The Anthropologie Group operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers catalogs in North America and Europe that market select merchandise, most of which is also available in Anthropologie brand stores, sells merchandise through a franchisee-owned ~~stores~~store in Israel, and partners with third-party digital businesses to offer a limited selection of merchandise, which is available globally. The Anthropologie Group’s North American and European Retail segment net sales accounted for approximately ~~39.2%~~36.3% and 1.6% of consolidated net sales, respectively, for the six months ended July 31, ~~2019,~~2020, compared to ~~38.6%~~39.2% and ~~1.7%~~1.6%, respectively, for the comparable period in fiscal ~~2019.~~2020. Asian Retail segment net sales accounted for less than 1.0% of consolidated net sales for the six months ended July 31, 2020 and the comparable period in fiscal 2020.

Free People focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, FP Movement activewear, shoes, accessories, home products, gifts and beauty and wellness. Free People stores are located in enclosed malls, upscale street locations and specialty centers. We plan to open standalone FP Movement stores in fiscal 2021 and expect to open additional stores thereafter to further capitalize on the growth opportunity and unique position that FP Movement has in the fitness and wellness space. 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 of the Free People wholesale offerings. Free People also offers a catalog that markets select merchandise, most of which is also available in our Free People stores, ~~sells~~

~~merchandise through franchisee-owned stores in Israel,~~ and partners with third-party digital businesses to offer a limited selection of merchandise, which is available globally. ~~We plan to open additional Free People stores in Europe that will allow us to expand the presence of the brand internationally.~~ Free People’s North American Retail segment net sales accounted for approximately ~~12.6%~~15.5% of consolidated net sales for the six months ended July 31, ~~2019,~~2020, compared to approximately ~~11.9%~~12.6% for the comparable period in fiscal ~~2019. Free People opened its first~~2020. European ~~retail stores~~and Asian Retail segment net sales each accounted for less than 1.0% of consolidated net sales for the six months ended July 31, 2020 and the comparable period in ~~the fourth quarter of~~ fiscal ~~2019. European Retail segment~~2020.

The Menus & Venues brand focuses on a dining experience that provides excellence in food, beverage and service. The Menus & Venues brand net sales accounted for less than 1.0% of consolidated net sales for the six months ended July 31, ~~2019.~~2020 and the comparable period in fiscal 2020.

~~The Food and Beverage division focuses on a dining experience that provides excellence in food, beverage and service. The Food and Beverage division net~~Net sales from the Retail segment accounted for ~~less than 1.0%~~approximately 94.8% of consolidated net sales for the six months ended July 31, ~~2019 and~~2020, compared to 90.9% for the comparable period in fiscal ~~2019.~~2020.

	January 31,		Stores		Stores			July 31,		January 31,		Stores		Stores			July 31,
	2019		Opened		Closed			2019		2020		Opened		Closed			2020
Urban Outfitters
United States		178		—		—			178		177		2		(3	)		176
Canada		17		—		—			17		17		—		—			17
Europe		50		1		—			51		54		1		—			55
Urban Outfitters Global Total		245		1		—			246		248		3		(3	)		248
Anthropologie Group
United States		204		—		(1	)		203		200		1		—			201
Canada		12		—		(1	)		11		11		—		—			11
Europe		11		3		—			14		20		1		—			21
Anthropologie Group Global Total		227		3		(2	)		228		231		2		—			233
Free People
United States		127		2		(1	)		128		134		—		(1	)		133
Canada		6		—		—			6		6		—		—			6
Europe		2		1		—			3		4		—		—			4
Free People Global Total		135		3		(1	)		137		144		—		(1	)		143
Food and Beverage
Menus & Venues
United States		13		—		(2	)		11		11		—		—			11
Food and Beverage Total		13		—		(2	)		11
Menus & Venues Total											11		—		—			11
Total Company-Owned Stores		620		7		(5	)		622		634		5		(4	)		635
Franchisee-Owned Stores ⁽¹⁾		5		1		—			6		7		—		(4	)		3
Total URBN		625		8		(5	)		628		641		5		(8	)		638

Selling square footage by brand as of July 31, ~~2019~~2020 and ~~2018~~2019 was as follows:

	July 31,		July 31,					July 31,		July 31,
	2019		2018		Change			2020		2019		Change
Selling square footage (in thousands):
Urban Outfitters		2,203		2,208		-0.2	%		2,212		2,203		0.4	%
Anthropologie Group		1,782		1,750		1.8	%		1,793		1,782		0.6	%
Free People		306		298		2.7	%		321		306		5.1	%
Total URBN ⁽¹⁾		4,291		4,256		0.8	%		4,326		4,291		0.8	%

~~Within the United States and Canada, we are at or close to our desired maximum store count for the Urban Outfitters, Anthropologie and Free People brands.~~ We plan for future store growth for all three brands to come from expansion domestically and internationally, which may include opening stores (including standalone FP Movement stores) in new and existing markets or entering into additional franchise or joint venture agreements. We plan for future digital channel growth to come from expansion domestically and internationally, including enhancing our presence in third-party digital marketplaces, such as Tmall in China and through our franchise partners. The Company is currently party to a franchise agreement for franchise locations in Israel and in fiscal 2019 signed a second franchise agreement to open stores in other Middle Eastern countries in fiscal 2020.internationally.

	January 31,		Projected		Projected			January 31,		January 31,		Projected		Projected			January 31,
	2019		Openings		Closings			2020		2020		Openings		Closings			2021
Urban Outfitters		245		8		(4	)		249		248		8		(9	)		247
Anthropologie Group		227		8		(7	)		228		231		6		(2	)		235
Free People		135		10		(1	)		144		144		7		(1	)		150
Food and Beverage		13		—		(2	)		11
Menus & Venues											11		—		—			11
Total Company-Owned Stores		620		26		(14	)		632		634		21		(12	)		643
Franchisee-Owned Stores		5		2		—			7		7		—		(6	)		1
Total URBN(1)		625		28		(14	)		639		641		21		(18	)		644

Our Wholesale segment consists of the Free People, Anthropologie and Urban Outfitters brands that sell through approximately ~~2,200~~2,300 department and specialty stores worldwide, third-party digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People brand, home goods including gifts, tabletop and textiles under the Anthropologie brand and the BDG apparel collection under the Urban Outfitters brand. The ~~Urban Outfitters~~Company plans for the Anthropologie brand to exit the wholesale ~~division was established in~~business by the end of the third quarter of fiscal ~~2019.~~2021. Our Wholesale segment net sales accounted for approximately ~~9.1%~~4.5% of consolidated net sales for the six months ended July 31, ~~2019,~~2020, compared to ~~9.2%~~9.1% for the comparable period in fiscal ~~2019.~~2020.

Our Subscription segment consists of the Nuuly brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019. For a monthly fee, Nuuly subscribers canselect rental product from a wide selection of the Company’s own brands, third-party labels and one-of-a-kind vintage pieces ~~for rent~~ via a custom-built, digital platform. Subscribers select their ~~styles~~products each month, wear them as often as they like, and then swap into new ~~styles~~products the following ~~month, infusing freshness and variety into their wardrobes.~~month. Subscribers are also able to purchase the ~~product being rented.~~rented product. Our Subscription segment net sales accounted for less than 1.0% of consolidated net sales for the six months ended July 31, 2020.

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, ~~2019,~~2020, which are included in our Annual Report on Form 10-K filed with the SEC on ~~April 1, 2019.~~March 31, 2020. 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. WeOther than the impact of the coronavirus pandemic on our inventory obsolescence reserves in the Retail and Wholesale segments, the allowance for doubtful accounts on our Wholesale segment accounts receivable and the obsolescence reserves on our Subscription segment rental product, 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 standards related to leases on February 1, 2019, which changed certain accounting policies (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 standards, thereThere have been no significant changes to our critical accounting policies during the six months ended July 31, ~~2019.~~2020.

As a result of the coronavirus pandemic, our stores were closed for a portion of the first half of fiscal 2021 (see further details under Impact of the Coronavirus Pandemic above). In addition to lost revenues, we incurred expenses that were not commensurate with the current level of sales. As a result, comparisons of expense ratios and year-over-year trends were impacted in a meaningful way.

The following table sets forth, for the periods indicated, 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 table should be read in conjunction with the discussion that follows:

Three Month Ended

Six Months Ended

July 31,

July 31,

2019

2018

2019

2018

Net sales

100.0
%

100.0
%

100.0
%

100.0
%
Cost of sales

67.2

64.1

68.0

65.6

Gross profit

32.8

35.9

32.0

34.4

Selling, general and administrative expenses

24.7

24.1

25.5

25.2

Income from operations

8.1

11.8

6.5

9.2

Other income, net

0.4

0.1

0.3

0.1

Income before income taxes

8.5

11.9

6.8

9.3

Income tax expense

2.2

2.5

1.7

2.0

Net income

6.3
%

9.4
%

5.1
%

7.3
%

	Three Months Ended							Six Months Ended
	July 31,							July 31,
	2020				2019			2020				2019
Net sales		100.0		%		100.0	%		100.0		%		100.0	%
Cost of sales (excluding store impairment)		70.4				67.2			81.0				68.0
Store impairment		—				—			1.0				—
Gross profit		29.6				32.8			18.0				32.0
Selling, general and administrative expenses		21.0				24.7			27.3				25.5
Income (loss) from operations		8.6				8.1			(9.3	)			6.5
Other (loss) income, net		(0.1	)			0.4			—				0.3
Income (loss) before income taxes		8.6				8.5			(9.3	)			6.8
Income tax expense (benefit)		4.3				2.2			(1.8	)			1.7
Net income (loss)		4.3		%		6.3	%		(7.5	)	%		5.1	%

Three Months Ended July 31, ~~2019~~2020 Compared To Three Months Ended July 31, ~~2018~~2019

Net sales in the second quarter of fiscal ~~2020~~2021 were ~~$962.3~~$803.3 million, compared to ~~$992.5~~$962.3 million in the second quarter of fiscal ~~2019.~~2020. The ~~$30.2~~$159.0 million decrease was attributable to a ~~$23.3~~$121.2 million, or ~~2.6%~~13.8%, decrease in Retail segment net sales and a ~~$6.9~~$42.5 million, or ~~7.5%~~50.8%, decrease in ~~our~~ Wholesale segment net ~~sales.~~sales, partially offset by $4.7 million of Subscription segment net sales in fiscal 2021. Retail segment net sales for the second quarter of fiscal ~~2020~~2021 accounted for ~~91.3%~~94.3% of total net sales compared to ~~90.9%~~91.3% of total net sales in the second quarter of fiscal ~~2019.~~2020.

The decrease in our Retail segment net sales during the second quarter of fiscal ~~2020~~2021 was due to a decrease of ~~$25.7~~$113.5 million, or ~~3.0%~~13.3%, in Retail segment comparable net sales, ~~partially offset by an increase~~and a decrease of ~~$2.4~~$7.7 million in non-comparable net sales, including the net impact of store openings and closings since the prior comparable period and the impact of foreign currency ~~translation and new store net sales.~~translation. Retail segment comparable net sales increased ~~5.6%~~11.4% at Free People and decreased ~~3.3%~~8.0% at Urban Outfitters and 24.7% at the Anthropologie ~~Group~~Group. Retail segment comparable net sales decreased in both North America and ~~5.3% at~~

~~Urban Outfitters.~~Europe. The decrease in Retail segment comparable net sales was driven by negative comparable store net sales due to stores remaining closed for part of the quarter and lower store productivity once opened, partially offset by double-digit growth in the digital channel. ~~Retail segment comparable net sales decreased in both North America and Europe.~~ Negative comparable store net sales resulted from a decrease in traffic, transactions, average unit selling price and ~~traffic, partially offset by an increase in~~ units per transaction. The digital channel net sales increase was driven by an increase in ~~sessions and~~ conversion rate and sessions, while average order value and units per transaction ~~and average order value~~ decreased. The ~~increase~~decrease in non-comparable net ~~sales attributable to non-comparable~~ sales was primarily due to the ~~impact~~store closures and lower store productivity as a result of ~~opening 21~~the coronavirus pandemic at the 27 new Company-owned stores and restaurants opened and ~~closing 15~~13 Company-ownedstores and restaurants closed since the prior comparable ~~period, partially offset by the impact of foreign currency translation.~~period.

The decrease in Wholesale segment net sales in the second quarter of fiscal ~~2020,~~2021, as compared to the second quarter of fiscal ~~2019,~~2020, was primarily due to a ~~9.8%~~51.8% decrease in sales for the Free People brand, asdue to most of the brand’s wholesale partners having a ~~result~~meaningful portion of ~~lower sales to North American department stores. This~~their businesses closed for a significant part of the quarter. The segment decrease was also due to a decrease of $1.1 million in Anthropologie Home sales due to the impact of the coronavirus pandemic on the brand’s wholesale partners’ operations as well as the brand’s planned exit of the wholesale business, partially offset by an increase of ~~$1.0~~$0.4 million in ~~Anthropologie Home sales and $0.9 million of~~ Urban Outfitters BDG sales. ~~The Urban Outfitters wholesale division was launched in the third quarter of fiscal 2019.~~

Gross profit percentage for the second quarter of fiscal ~~2020~~2021 decreased to ~~32.8%~~29.6% of net sales, from ~~35.9%~~32.8% of net sales in the comparable quarter in fiscal ~~2019.~~2020. Gross profit decreased to $238.0 million in the second quarter of fiscal 2021 from $315.9 million in the second quarter of fiscal ~~2020 from $355.8 million in the second quarter of fiscal 2019.~~2020. The decrease in gross profit percentage was ~~driven by higher markdowns, deleverage~~primarily due to an increase in delivery and logistics expenses and store occupancy deleverage. The higher markdowns were largely driven by underperforming women’s apparel at the Anthropologie and Urban Outfitters brands. The deleverage in delivery and logistics expenses was primarilyexpense due to ~~the increase in~~ penetration of the digital ~~channel.~~channel, and to store occupancy expense rate deleverage. The deleverage in store occupancy expense was due to ~~negative~~ store ~~net sales. The Company expects that its gross profit percentage will decline in~~closures during the ~~third~~ quarter ~~of fiscal 2020 compared to fiscal 2019~~ as ~~a result of higher markdowns~~rent and ~~deleverage in delivery and logistics expenses,~~other occupancy costs are mostly unadjusted until agreements are reached with landlords as well as ~~from~~lower store sales productivity once stores reopened. Merchandise markdowns were lower in the ~~launch of Nuuly~~quarter as both the Urban Outfitters and Free People brands delivered record low markdown rates. Merchandise mark-up rate was flat versus the ~~transition~~prior year’s comparable period. Inventory reserves for the Retail and Wholesale segments were reduced by $21.7 million in total during the quarter versus the prior year’s comparable period, due to ~~managing furniture~~disciplined inventory control and ~~nonsortable distribution from a third-party logistics provider to an internal operation.~~better than planned product performance.

Total inventory at July 31, ~~2019~~2020 as compared to July 31, ~~2018, increased~~2019, decreased by ~~$64.4~~$88.3 million, or ~~17.2%~~20.1%, to ~~$440.1~~$351.8 million. Comparable Retail segment inventory ~~increased 4.9%~~decreased 14.3% at ~~cost, with the remainder of the increase~~cost. The decrease in inventory was due to a 14.4% decrease in Retail segment inventory and a 53.3% decrease in Wholesale segment inventory. The decrease in both segments was primarily ~~related~~due to disciplined inventory control and an increase in inventory ~~in transit. Wholesale segment inventory increased 35.9%.~~obsolescence reserves.

Selling, general and administrative expenses decreased by ~~0.5%~~29.1%, to $168.6 million, in the second quarter of fiscal 2021, compared to $237.8 million in the second quarter of fiscal ~~2020, compared to $239.0 million in the second quarter of fiscal 2019.~~2020. Selling, general and administrative expenses as a percentage of net sales ~~increased~~decreased in the second quarter of fiscal ~~2020~~2021 to ~~24.7%~~21.0% of net sales, compared to ~~24.1%~~24.7% of net sales for the second quarter of fiscal ~~2019.~~2020. The ~~percentage increase~~leverage and decrease in selling, general and administrative expenses for the three months ended July 31, 2020 was primarily ~~driven by increased~~related to disciplined store payroll expense management, overall expense control measures and the benefit of COVID-19 related government relief

packages. Digital marketing expenses grew during the quarter to support ~~our~~strong digital channel sales ~~growth as well as the launch of Nuuly.~~and customer growth.

Income from operations ~~decreased~~was 8.6% of net sales, or $69.4 million, for the second quarter of fiscal 2021 compared to 8.1% of net sales, or $78.1 million, for the second quarter of fiscal ~~2020 compared to 11.8% of net sales, or $116.9 million, for the second quarter of fiscal 2019.~~2020.

Our effective tax rate for the second quarter of fiscal ~~2020~~2021 was ~~26.0% of income before income taxes~~50.1% compared to ~~21.7% of income before income taxes~~26.0% in the second quarter of fiscal ~~2019.~~2020. The increase in expense for the ~~effective tax rate~~three months ended July 31, 2020 was ~~primarily~~ due to the ~~ratio~~partial reversal of ~~foreign taxable profits to global taxable profits and~~ the ~~prior year favorable impact of equity activity.~~tax benefit recorded in the three months ended April 30, 2020, based on the improved company performance in the second quarter.

Six Months Ended July 31, ~~2019~~2020 Compared To Six Months Ended July 31, ~~2018~~2019

Net sales for the six months ended July 31, ~~2019~~2020 were ~~$1.83~~$1.39 billion, compared to ~~$1.85~~$1.83 billion in the comparable period of fiscal ~~2019.~~2020. The ~~$21.4~~$435.0 million decrease was attributable to a ~~$16.3~~$342.5 million, or ~~1.0%~~20.6%, decrease in Retail segment net sales and a ~~$5.1~~$103.4 million, or ~~3.0%~~62.5%, decrease in Wholesale segment net ~~sales.~~sales, partially offset by $10.9 million of Subscription segment net sales in fiscal 2021. Retail segment net sales for the six months ended July 31, ~~2019~~2020 accounted for ~~90.9%~~94.8% of total net sales compared to ~~90.8%~~90.9% of total net sales in the six months ended July 31, ~~2018.~~2019.

The decrease in our Retail segment net sales during the first six months of fiscal ~~2020~~2021 was due to a decrease of ~~$19.8~~$318.9 million, or ~~1.2%~~19.8%, in Retail segment comparable net sales, ~~partially offset by an increase~~and a decrease of ~~$3.5~~$23.6 million in non-comparable net sales, including the net impact of store openings and closings since the prior comparable period and the impact of foreign currency ~~translation and new store net sales.~~translation. Retail segment comparable net sales ~~increased 3.9%~~decreased 2.5% at Free People, 15.5% at Urban Outfitters and ~~decreased 1.2%~~28.4% at the Anthropologie ~~Group~~Group. Retail segment comparable net sales decreased in both North America and ~~2.9% at Urban Outfitters.~~Europe. The decrease in Retail segment comparable net sales was driven by negative comparable store net sales due to mandated store closures as a result of the coronavirus pandemic and lower store productivity once opened, partially offset by double-digit growth in the digital channel. ~~Retail segment comparable net sales decreased in both North America and Europe.~~ Negative comparable store net sales resulted from a decrease in traffic, transactions, average unit selling price and ~~traffic, partially offset by an increase in~~ units per transaction. The digital channel net sales increase was driven by an increase in ~~sessions and~~ conversion rate and sessions, while average order value and units per transaction ~~and average order value~~ decreased. The ~~increase~~decrease in non-comparable net ~~sales attributable to non-comparable~~ sales was primarily due to the ~~impact~~store closures and lower store productivity as a result of ~~opening 25~~the coronavirus pandemic at the 31 new Company-owned stores and restaurants opened and ~~closing~~ 16Company-ownedstores and restaurants closed since the prior comparable ~~period, partially offset by the impact of foreign currency translation.~~period.

The decrease in Wholesale segment net sales in the first six months of fiscal ~~2020,~~2021, as compared to the first six months of fiscal ~~2019,~~2020, was primarily due to a ~~4.8%~~62.9% decrease in sales for the Free People brand, asdue to most of the brand’s wholesale partners having a ~~result~~meaningful portion of ~~lower sales to North American department stores. This~~their businesses closed for a significant part of the six month period. The segment decrease was also due to a decrease of $3.3 million in Anthropologie Home sales due to the impact of the coronavirus pandemic on the brand’s wholesale partners’ operations as well as the brand’s planned exit of the wholesale business, partially offset by an increase of ~~$1.0 million in Anthropologie Home sales and $2.1~~$0.1 million in Urban Outfitters BDG sales. ~~The Urban Outfitters wholesale division was launched in the third quarter of fiscal 2019.~~

Gross profit percentage for the first six months of fiscal ~~2020~~2021 decreased to ~~32.0%~~18.0% of net sales, from ~~34.4%~~32.0% of net sales in the comparable period in fiscal ~~2019.~~2020. Gross profit decreased to ~~$584.9~~$249.9 million for the first six months of fiscal ~~2020~~2021 from ~~$636.5~~$584.9 million in the comparable period in fiscal ~~2019.~~2020. The decrease in gross profit percentage was primarily driven by ~~higher markdowns, deleverage~~an increase in delivery and logistics expenses and store occupancy deleverage. The higher markdowns were largely driven by underperforming women’s apparel at the Anthropologie and Urban Outfitters brands. The deleverage in delivery and logistics expenses was primarilyexpense due to ~~the increase in~~ penetration of the digital ~~channel.~~channel, followed by store occupancy expense rate deleverage. The deleverage in store occupancy expense was due to ~~negative~~mandated store ~~net sales.~~closures as rent and other occupancy costs are mostly unadjusted until agreements are reached with landlords as well as lower store sales productivity once stores reopened. Additionally, during the six months ended July 31, 2020, the Company recorded a $21.7 million year-over-year increase in inventory obsolescence reserves due to an increase in aged inventory and a $14.5 million store impairment charge.

Selling, general and administrative expenses ~~increased~~decreased by ~~$1.1~~$87.7 million, or ~~0.2%~~18.8%, to $379.2 million in the first six months of fiscal ~~2020,~~2021, compared to the first six months of fiscal ~~2019.~~2020. Selling, general and administrative expenses as a percentage of net sales increased in the first six months of fiscal ~~2020~~2021 to ~~25.5%~~27.3% of net sales, compared to ~~25.2%~~25.5% of net sales for the first six months of fiscal ~~2019.~~2020 The ~~percentage increase~~deleverage was primarily driven by ~~increased~~an increase in digital marketing expenses to support ~~our~~strong digital channel sales ~~growth as well as~~and customer growth. The decrease in selling, general and administrative expenses for the ~~launch~~six months ended July 31, 2020, was primarily due to disciplined store payroll expense management, overall expense control measures and the benefit of ~~Nuuly.~~COVID-19 related government relief packages.

~~Income~~Loss from operations ~~decreased~~was 9.3% of net sales, or $129.3 million, for the first six months of fiscal 2021 compared to income from operations of 6.5% of net sales, or $118.1 million, for the first six months of fiscal ~~2020 compared to 9.2% of net sales, or $170.7 million, for the first six months of fiscal 2019.~~2020.

Our effective tax rate for the first six months of fiscal ~~2020~~2021 was ~~25.2%~~a benefit of ~~income before income taxes~~19.8% compared to ~~22.3%~~an expense of ~~income before income taxes~~25.2% in the first six months of fiscal ~~2019.~~2020. The ~~increase~~change in the effective tax rate for the six months ended July 31, 2020, was primarily ~~due~~driven by the year-to-date operating loss compared to ~~the ratio of foreign taxable profits to global taxable profits and~~operating income in the prior year ~~favorable impact of equity activity.~~period.

Cash, cash equivalents and marketable securities were $672.6 million as of July 31, 2020, as compared to $530.4 million as of January 31, 2020 and $412.3 million as of July 31, ~~2019, as compared to $694.8 million as of January 31, 2019 and $649.4 million as of July 31, 2018.~~2019. During the first six months of fiscal ~~2020,~~2021, we generated ~~$61.3~~$115.2 million in cash from operations, had net borrowings of $120.0 million (borrowings of $220.0 million and repayments of $100.0 million) under our Amended Credit Facility, invested ~~$116.5~~$72.1 million in property and equipment and repurchased ~~$217.4~~$7.0 million ~~common shares. Our working capital was $374.3 million at July 31, 2019 compared to $816.1 million at January 31, 2019 and $771.8 million at July 31, 2018. Working capital as~~ of July 31, 2019 was negatively impacted by $209.1 million for the current portion of operating lease liabilities due to the February 1, 2019 adoption of an accounting standards update that amended the accounting standards for lease accounting (see Note 2, “Recent Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion). Working capital was also negatively impacted by the use of cash and cash equivalents and marketable securities used to repurchase our common shares ~~in fiscal 2019 and~~under our share repurchase programs. The shares repurchased during the first six months of fiscal 2021 were prior to the known spread of the coronavirus pandemic in the United States, which forced the Company to close its stores for an extended period of time. Our working capital was $499.8 million at July 31, 2020 compared to $414.6 million at January 31, 2020 and ~~fund~~$374.3 million at July 31, 2019. The increase in working capital as compared to January 31, 2020, and July 31, 2019, was primarily due to the net increase in cash, cash equivalents and current marketable securities due to the net $120.0 million borrowing under our ~~capital projects.~~Amended Credit Facility.

On June 8, 2020, the Company’s aggregate borrowing limit for purposes of trade letter of credit issuances was reduced from $130.0 million to $95.0 million and was reduced again on August 1, 2020 to $70.0 million. The reductions were made to align the amount of available trade letters of credit with the Company’s usage. The Company does not expect the reduction of available trade letters of credit to have a material impact on its liquidity.

During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating ~~activities.~~activities and additionally in the first six months of fiscal 2021, through our borrowings. Our primary uses of cash have been to ~~repurchase our common shares, open new stores,~~fund business operations, purchase inventory, ~~fund store operations and~~ expand our home offices and fulfillment ~~centers.~~centers, open new stores and repurchase our common shares.

Cash ~~provided by~~flows from operating activities during the first six months of fiscal ~~2020 decreased by $157.5~~2021 was a cash inflow of $115.2 million compared to $61.3 ~~million from $218.8~~ million in the first six months of fiscal ~~2019.~~2020. For both periods, our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The period over period ~~decrease~~increase in cash flows from operations was primarily due to ~~compensation-related disbursements, higher~~decreased inventory and accounts receivables levels and an increase in accrued expenses, accrued compensation and other current liabilities due to timing, partially offset by the net loss incurred in the first six months of fiscal 2021 driven by the material negative impact that the store closures and lower ~~net income.~~store productivity caused by the coronavirus pandemic had on the Company’s operations. Although the Company’s stores were closed for part of fiscal 2021, the Company continued to incur various store operational costs, such as employee costs and costs for a large portion of its regional and store management teams despite store closures and reduced sales during the coronavirus pandemic.

Cash ~~used in~~flows from investing activities during the first six months of fiscal ~~2020 decreased by $63.3~~2021 was a cash inflow of $218.0 million compared to a cash outflow of $31.1 ~~million from $94.4~~ million in the first six months of fiscal ~~2019.~~2020. Net liquidations of our marketable securities portfolio in the first six months of fiscal 2021 were primarily to preserve financial flexibility and maintain liquidity in response to the coronavirus pandemic. Cash used in investing activities in ~~both periods~~fiscal 2020 primarily related to purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities. ~~Net liquidations of our marketable securities portfolio in the first six months of fiscal 2020 were used primarily to fund repurchases of our common shares and purchases of property and equipment.~~ Cash paid for property and equipment in the first six months of fiscal 2021 and 2020 ~~and 2019~~ was ~~$116.5~~$72.1 million and ~~$55.6~~$116.5 million, respectively, which was primarily used to ~~construct new fulfillment centers, including the Nuuly~~expand our fulfillment center network in fiscal 2021 and 2020. See Capital and Operating Expenditures for further discussion of the ~~first six months~~Company’s plans to reduce planned capital expenditures for the remainder of fiscal ~~2020 and expand our store base~~2021 in ~~fiscal 2019.~~response to the coronavirus pandemic.

Cash ~~used in~~flows from financing activities during the first six months of fiscal ~~2020~~2021 was a cash inflow of $109.2 million compared to a cash outflow of $221.9 ~~million compared to a cash inflow of $7.1~~ million in the first six months of fiscal ~~2019.~~2020. Cash provided by financing activities in the first six months of fiscal 2021 primarily related to $220.0 million of borrowings under our Amended Credit Facility, partially offset by $100.0 million in repayments of long-term debt and $7.0 million of repurchases of our common shares under our share repurchase program. The shares repurchased during the first six months of fiscal 2021 were prior to the known spread of the coronavirus pandemic in the United States, which forced the Company to close its stores for an extended period of time. The Company has since suspended share repurchase activity under its programs for the foreseeable future. Cash used in financing activities in the first six months of fiscal 2020 primarily related to $217.4 million of repurchases of our common shares under our share repurchase programs. Cash provided by financing activities in the first six months of fiscal 2019 related to proceeds from the exercise of stock options, partially offset by share repurchases related to taxes for share-based awards.program.

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

~~During~~ With the additional measures in place noted above under Impact of the Coronavirus Pandemic, during fiscal ~~2020,~~2021, we plan to ~~repurchase our common shares, construct~~complete construction of a new omni-channel fulfillment ~~centers,~~center building in Europe, with the remaining materials handling equipment to be purchased and installed during fiscal 2021 for full operation in fiscal 2022, start construction on a new omni-channel fulfillment center in the United States, open approximately 2621 new Company-owned retail locations, expand or relocate certain existing retail locations, invest in new products, markets and brands, ~~(including the launch of the apparel subscription rental service Nuuly), open our new European home office,~~ purchase inventory for our ~~new and existing~~ operating segments at levels appropriate ~~levels~~ to maintain our planned sales, ~~growth,~~ upgrade our systems, improve and expand our digital capabilities, ~~and~~ invest in omni-channel ~~marketing.~~marketing when appropriate and may repurchase common shares. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales growth. During fiscal 2020, we plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal 2020 to be approximately $250 million, a significant portion of which will be to support new fulfillment and distribution centers in Bristol, Pennsylvania, Indiana, Pennsylvania and Europe.Retail segment sales. All fiscal ~~2020~~2021 capital expenditures are expected to be financed by cash flow from operating ~~activities.~~activities and borrowings under our current Amended Credit Facility. We believe that our new store investments generally have the potential to generate positive cash flow within a ~~year.~~year; however, the impact of the coronavirus pandemic may result in a slightly longer timeframe. 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.

See Note 9, “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.

As of and for the six months ended July 31, ~~2019,~~2020, 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.

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 adopted and issued~~recent accounting pronouncements.

There have been no material changes to our quantitative or qualitative disclosures found in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019.~~2020.

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.

During the six months ended July 31, 2019, we implemented changes to our controls as part of the adoption of the accounting standards update that amended the existing accounting standards for lease accounting. These changes included new processes to evaluate and account for leases. There ~~were~~have been no ~~other~~ changes in our internal controls over financial reporting during the ~~six months~~fiscal quarter ended July 31, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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.

~~There have been no material changes~~“Item 1A, Risk Factors” in ~~our risk factors since January 31, 2019. Please refer to~~ our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019,~~2020, filed with the SEC on ~~April 1, 2019, for~~March 31, 2020, includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors disclosed in our Annual Report on Form 10-K. The effects of the events and circumstances described in the following risk factor may have the additional effect of heightening many of the other risks noted in our Annual Report on Form 10-K. Otherwise, except as presented below, there have been no material changes to our risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the SEC on March 31, 2020.

The coronavirus pandemic has and will continue to materially and adversely affect our business operations globally.

The coronavirus pandemic continues to materially impact the Company’s operations in the United States and globally, and related government and private sector responsive actions have and will continue to adversely affect its business operations. On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide, causing public health officials to recommend precautions to mitigate the spread of the virus, including warning against congregating in heavily populated areas, such as malls and shopping centers. On March 14, 2020, the Company announced that it temporarily closed all stores globally. The Company has since reopened all of its stores as permitted by local government guidelines for retail establishments while following newly established health protocols, providing personal protective equipment to our employees, and implementing social distancing working practices as required by local authorities. The Company’s distribution and fulfillment centers remained open to support the digital business and the Wholesale segment operations, but have done so with additional safety procedures and enhanced cleaning to protect the health of the employees. The Company closed its offices and showrooms globally with the exception of location dependent employees. All other corporate and showroom employees are working remotely.

The extent of the impact of the coronavirus pandemic on our business, consolidated results of operations, consolidated financial position and consolidated cash flows, including any potential impairment or other fair value adjustments, will depend largely on future developments, including the duration and spread of the outbreak in the U.S. and globally, the related impact on consumer confidence and spending and the willingness of customers to visit malls and shopping centers, the willingness of employees to staff our stores and fulfillment centers, and when, or if, we will be able to resume normal operations, all of which are highly uncertain and cannot be predicted. Additionally, we may need to cease or significantly limit our operations again if subsequent outbreaks occur, either more broadly or within our stores. Nevertheless, the coronavirus pandemic presents significant uncertainty and risk with respect to our business, financial performance and condition, operating results, liquidity and cash flows.

~~A summary~~May 31, 2020, we were in default of the ~~repurchase activity~~Fixed Charge Coverage Ratio financial covenant under ~~the Company’s share repurchase programs~~our Amended Credit Agreement. On August 13, 2020, we obtained a waiver for ~~the quarter ended July 31, 2019 is as follows:~~

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 six months ended July 31, ~~2019,~~2020, filed with the Securities and Exchange Commission on September 9, ~~2019,~~2020, formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Shareholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

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.

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)

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

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of July 31, ~~2019~~2020, January 31, ~~2019~~2020 and July 31, ~~2018~~2019	1

	Condensed Consolidated Statements of ~~Income~~Operations for the three and six months ended July 31, ~~2019~~2020 and ~~2018~~2019	2

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended July 31, ~~2019~~2020 and ~~2018~~2019	3

	Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended July 31, ~~2019~~2020 and ~~2018~~2019	4

	Condensed Consolidated Statements of Cash Flows for the six months ended July 31, ~~2019~~2020 and ~~2018~~2019	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2022

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2833

Item 4.	Controls and Procedures	2833

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	2934

Item 1A.	Risk Factors	2934

Item 2.3.	~~Unregistered Sales of Equity~~Defaults Upon Senior Securities ~~and the Use of Proceeds~~	2934

Item 6.	Exhibits	3035

	Signatures	3136

	Six Months Ended
	July 31, 2019
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	144,380
Right-of-use assets obtained in exchange for new operating lease liabilities	$	34,274
Weighted-average remaining lease term - operating leases	7.5 years
Weighted-average discount rate - operating leases		6.5	%

Exhibit Number		Description

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

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

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

3.4		Amended and Restated By-laws are incorporated by reference to Exhibit ~~3.4~~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.

10.1*		Limited Waiver, dated as of August 13, 2020, by and among Urban Outfitters, Inc., the other Loan Parties party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, under that certain Amended and Restated Credit Agreement dated as of June 29, 2018, among the Company, the Subsidiary Borrowers, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent.

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)

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

	Three Months Ended July 31, 2018									Six Months Ended July 31, 2018
				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	$	(18,309	)	$	(404	)	$	(18,713	)	$	(10,340	)	$	(311	)	$	(10,651	)
Other comprehensive income (loss) before reclassifications		(7,881	)		(7	)		(7,888	)		(15,850	)		(87	)		(15,937	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			—			—			—			(13	)		(13	)
Net current-period other comprehensive income (loss)		(7,881	)		(7	)		(7,888	)		(15,850	)		(100	)		(15,950	)
Balance at end of period	$	(26,190	)	$	(411	)	$	(26,601	)	$	(26,190	)	$	(411	)	$	(26,601	)

Property and equipment, net
Retail operations	$	859,188	$	859,918	$	841,013
Wholesale operations		2,375		2,577		2,637
Subscription operations		27,563		27,537		23,784
Total property and equipment, net	$	889,126	$	890,032	$	867,434

$ in thousands	Three Months Ended		Three Months Ended			Six Months Ended
	April 30, 2020		July 31, 2020			July 31, 2020
Inventory obsolescence reserves	$	43,327	$	(21,673	)	$	21,654
Allowance for doubtful accounts		5,800		(2,200	)		3,600
Store impairment		14,528		—			14,528

	Three Month Ended						Six Months Ended
	July 31,						July 31,
	2019			2018			2019			2018
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		67.2			64.1			68.0			65.6
Gross profit		32.8			35.9			32.0			34.4
Selling, general and administrative expenses		24.7			24.1			25.5			25.2
Income from operations		8.1			11.8			6.5			9.2
Other income, net		0.4			0.1			0.3			0.1
Income before income taxes		8.5			11.9			6.8			9.3
Income tax expense		2.2			2.5			1.7			2.0
Net income		6.3	%		9.4	%		5.1	%		7.3	%

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⁾
May 1, 2019 through May 31, 2019		5,637,369	$	25.93		5,637,369		6,333,957
June 1, 2019 through June 30, 2019		—		—		—		26,333,957
July 1, 2019 through July 31, 2019		—		—		—		26,333,957
Total Fiscal 2020 Second Quarter		5,637,369				5,637,369		26,333,957

		URBAN OUTFITTERS, INC.

Date: September 9, ~~2019~~2020	By:		/s/ RICHARD A. HAYNE
			Richard A. Hayne
			Chief Executive Officer

		URBAN OUTFITTERS, INC.

Date: September 9, ~~2019~~2020	By:		/s/ FRANCIS J. CONFORTI
			Francis J. Conforti
			Chief Financial Officer