10q10k10q10k.net

What changed in URBAN OUTFITTERS INC's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of URBAN OUTFITTERS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+251 added−290 removedSource: 10-K (2024-04-01) vs 10-K (2023-04-03)

Top changes in URBAN OUTFITTERS INC's 2024 10-K

251 paragraphs added · 290 removed · 209 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

66 edited+5 added−17 removed46 unchanged
Biggest changeWe lease a 214,500 square foot distribution center located in Reno, Nevada that receives and distributes the remaining half of our retail store merchandise in North America. We own and operate a 1,000,000 square foot fulfillment center in Gap, Pennsylvania, which performs Retail and Wholesale segment fulfillment services, including inventory warehousing, receiving and customer shipping.
Biggest changeThe primary Retail segment facilities that support our North America Retail segment operations are: • 1,000,000 square foot omni-channel fulfillment center we own in Gap, Pennsylvania; • 291,000 square foot distribution center we own in Gap, Pennsylvania; • 956,000 square foot fulfillment center we own in Indiana, Pennsylvania; • 880,000 square foot omni-channel fulfillment center we own in Kansas City, Kansas; • 463,000 square foot fulfillment center we own in Reno, Nevada; and • 214,500 square foot distribution center we lease in Reno, Nevada To support North America Retail segment customer demand until the omni-channel fulfillment center in Kansas City, Kansas was operational, we leased a 401,000 square foot fulfillment center located in Kansas City, Missouri.
Information Systems. We recognize the need for high-quality information to manage merchandise planning, buying, inventory management and control functions and have therefore invested in a retail software package that meets our processing and reporting requirements. We utilize point-of-sale register systems connected by a secure data network to our home offices.
We recognize the need for high-quality information to manage merchandise planning, buying, inventory management and control functions and have therefore invested in a retail software package that meets our processing and reporting requirements. We utilize point-of-sale register systems connected by a secure data network to our home offices.
Seasonality Our business is subject to 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. 8
Seasonality Our business is subject to seasonal fluctuations in net sales and net income, with a more significant portion of net sales 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. 8
We are not aware of any valid claims of infringement or challenges to our right to use any of our marks in the United States. 6 Environmental, Social & Governance (ESG) Impact Report "Lead With Creativity... to Make an Impact" describes the Company's strategy to apply our creative thinking and entrepreneurial mindset to responsible business practices that benefit our employees, shareholders, customers and the planet.
We are not aware of any valid claims of infringement or challenges to our right to use any of our marks in the United States. 6 Environmental, Social & Governance (ESG) Impact Report and Impact Scorecard "Lead With Creativity... to Make an Impact" describes the Company's strategy to apply our creative thinking and entrepreneurial mindset to responsible business practices that benefit our employees, shareholders, customers and the planet.
The product offering includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally and designed in collaboration with third-party brands. Stores average approximately 9,000 square feet of selling space.
The product offering includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Stores average approximately 9,000 square feet of selling space.
In addition to management training programs for both newly hired and existing employees, we have a number of retention programs that offer qualitative and quantitative performance-based incentives. Merchandise Our Urban Outfitters brand offers a wide array of eclectic merchandise, including women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home products, electronics and beauty.
In 3 addition to management training programs for both newly hired and existing employees, we have a number of retention programs that offer qualitative and quantitative performance-based incentives. Merchandise Our Urban Outfitters brand offers a wide array of eclectic merchandise, including women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home products, electronics and beauty.
Essential components of the ambiance of each store may include playing music that appeals to our target customers, using unique signage and employing a staff that understands and identifies with the target customer. Our Urban Outfitters, Anthropologie Group and Free People Group stores are primarily located in upscale street locations, free-standing locations, enclosed malls and specialty centers.
Essential components of the ambiance of each store may include playing music that appeals to our target customers, using unique signage and employing a staff that understands and identifies with the target customer. Our Urban Outfitters, Anthropologie and Free People stores are primarily located in upscale street locations, free-standing locations, enclosed malls and specialty centers.
On a quarterly basis, the Compensation Committee receives a talent dashboard with key metrics including employee survey feedback and turnover information. The Compensation Committee engages periodically on compensation program design for employees at various levels. Talent Acquisition, Development and Retention. The Company aims to be the leading destination for creative and entrepreneurial talent in the specialty fashion market.
On a quarterly basis, the Compensation Committee receives a talent dashboard with key metrics including employee survey feedback and turnover information. The Compensation Committee engages periodically on compensation program design for employees at various levels. 7 Talent Acquisition, Development and Retention. The Company aims to be the leading destination for creative and entrepreneurial talent in the specialty fashion market.
Trademarks and Service Marks We are the registered owner in the United States of certain service marks and trademarks, including, but not limited to “Urban Outfitters,” “Anthropologie,” “Free People,” “Bhldn,” “Terrain,” “BDG,” “FP Movement,” “Nuuly” and "URBN." Each mark is renewable indefinitely, contingent upon continued use at the time of renewal.
Trademarks and Service Marks We are the registered owner in the United States of certain service marks and trademarks, including, but not limited to “Urban Outfitters,” “Anthropologie,” “Free People,” “Terrain,” “BDG,” “FP Movement,” “Nuuly” and "URBN." Each mark is renewable indefinitely, contingent upon continued use at the time of renewal.
Some of our competitors have substantially greater name recognition as well as greater access to financial, marketing and other resources. Our Anthropologie Group and Free People Group stores also face competition from small boutiques that offer an individualized shopping experience similar to the one we strive to provide to our target customers.
Some of our competitors have substantially greater name recognition as well as greater access to financial, marketing and other resources. Our Anthropologie and Free People stores also face competition from small boutiques that offer an individualized shopping experience similar to the one we strive to provide to our target customers.
Through our unique culture, competitive compensation and benefits, development, training, coaching and mentorship programs and collaborative recruiting process, we believe we are positioned to attract top talent and drive high levels of performance, engagement and retention. We invest in our employees through accessible 7 resources and structured training programs that offer all employees opportunities for development.
Through our unique culture, competitive compensation and benefits, development, training, coaching and mentorship programs and collaborative recruiting process, we believe we are positioned to attract top talent and drive high levels of performance, engagement and retention. We invest in our employees through accessible resources and structured training programs that offer all employees opportunities for development.
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, and offers a catalog in North America that markets select merchandise, most of which is also available in Anthropologie brand stores.
Anthropologie 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, and offers a catalog in North America that markets select merchandise, most of which is also available in Anthropologie brand stores.
We monitor the styles and products that are popular with our wholesale customers to give us insight into current fashion trends, helping us to better serve our retail customers. Wholesale sales and showroom facilities are located in Dallas, New York City, Los Angeles, Chicago and London.
We monitor the styles and products that are popular with our wholesale customers to give us insight into current fashion trends, helping us to better serve our retail customers. Wholesale sales and showroom facilities are located in New York City, Los Angeles, London and Dallas.
We plan for our store environment and location strategy to remain consistent over the next several years. 3 Buying and Design Operations Maintaining a constant flow of fresh and fashionable merchandise is critically important to our ongoing performance.
We plan for our store environment and location strategy to remain consistent over the next several years. Buying and Design Operations Maintaining a constant flow of fresh and fashionable merchandise is critically important to our ongoing performance.
We plan for future store growth to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into franchise or joint venture agreements.
We plan for future store growth to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into franchise or 2 joint venture agreements.
Following our experience with remote work during the COVID-19 pandemic, depending on business needs, individual performance, and other factors, we permit employees to work under a “hybrid” mix of in-person and remote work, fully in-office or fully remote positions as necessary to meet business needs while providing employees flexibility to match their own preferences. Diversity and Inclusion.
Following our experience with remote work during the COVID-19 pandemic, depending on business needs, individual performance, and other factors, we permit employees to work under a “hybrid” mix of in-person and remote work, fully in-office or fully remote positions as necessary to meet business needs while providing employees flexibility to match their own preferences. Inclusion and Belonging.
For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party market brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month.
For a monthly fee, Nuuly subscribers can rent product from a wide selection of the Company’s own brands, third-party market brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month.
During fiscal 2023, we purchased merchandise from approximately 5,000 vendors located throughout the world. No single vendor or manufacturer accounted for more than 10% of merchandise purchased during that time. We do not believe that the loss of any one vendor would have a material adverse effect on our business. Company Operations Distribution.
During fiscal 2024, we purchased merchandise from approximately 5,000 vendors located throughout the world. No single vendor or manufacturer accounted for more than 10% of merchandise purchased during that time. We do not believe that the loss of any one vendor would have a material adverse effect on our business. Company Operations Distribution.
Our stores are located 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 stores are located 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.
To the extent that our vendors are located overseas or, in the case of third-party vendors, rely on overseas sources for a large portion of their merchandise, any event causing a disruption of imports, such as the imposition of increased security or regulatory requirements applicable to imported goods, war, public health concerns (including global pandemics such as COVID-19), acts of terrorism, natural disasters (including as a result of climate change), port security considerations or labor disputes, financial or political instability in any of the countries in which merchandise we purchase is manufactured, the effects of Brexit, changes to U.S. or foreign trade policies, including the enactment of tariffs, border adjustment taxes, or increases in duties or quotas, disruption in the supply of fabrics or raw materials, transportation capacity shortages and delays, increases in the cost of fuel or decreases in the value of the U.S. dollar relative to foreign currencies could adversely affect our business.
To the extent that our vendors are located overseas or, in the case of third-party vendors, rely on overseas sources for a large portion of their merchandise, any event causing a disruption of imports, such as the imposition of increased security or regulatory requirements applicable to imported goods, war, public health concerns (including global pandemics such as COVID-19), acts of terrorism, natural disasters (including as a result of climate change), port security considerations or labor disputes, financial or political instability in any of the countries in which merchandise we purchase is manufactured, the effects of Brexit, changes to U.S. or foreign trade policies, including the enactment of tariffs, border adjustment taxes, or increases in duties or quotas, disruption in the supply of fabrics or raw materials, transportation capacity shortages and delays (including the impact of the conflict in the Middle East on shipments traveling through the region), increases in the cost of fuel or decreases in the value of the U.S. dollar relative to foreign currencies could adversely affect our business.
The Free People Group 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, as well as substantially all of the Free People and FP Movement wholesale offerings.
Free People 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, as well as substantially all of the Free People and FP Movement wholesale offerings.
European Retail segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2023. Menus & Venues. The Menus & Venues brand focuses on a dining and event experience that provides excellence in food, beverage and service. As of January 31, 2023, we operated 11 locations, all of which were located in the United States.
European Retail segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2024. Menus & Venues. The Menus & Venues brand focuses on a dining and event experience that provides excellence in food, beverage and service. As of January 31, 2024, we operated 9 locations, all of which were located in the United States.
We aim to cultivate a creative entrepreneurial spirit in every employee, empower everyone involved in our supply chain, and always put our customer first. • Cultivate Community • Improve Supply Chain Transparency The Company maintains an Impact Committee, co-chaired by our Chief Sourcing and Chief Administration Officers and reporting to our Nominating and Governance Committee, to set sustainability policies and goals, provide oversight of those policies and track and report progress toward our goals.
We aim to cultivate a creative entrepreneurial spirit in every employee, empower everyone involved in our supply chain, and always put our customer first. • Cultivate Community • Improve Supply Chain Transparency The Company maintains an Impact Committee, co-chaired by our Chief Sourcing and Chief Administrative Officers and reporting to our Board of Directors, to set sustainability policies and goals, provide oversight of those policies and track and report progress toward our goals.
For example, our fiscal 2023 ended on January 31, 2023. 1 Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with, or furnished to, the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our investor relations website, www.urbn.com/investor-relations , as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with, or furnished to, the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available 1 free of charge on our investor relations website, www.urbn.com/investor-relations , as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.
Our Nuuly brand allows subscribers to select rental product from a wide selection of the Company’s own brands, third-party market brands and one-of-a-kind vintage pieces.
Our Nuuly brand allows subscribers to rent product from a wide selection of the Company’s own brands, third-party market brands and one-of-a-kind vintage pieces.
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. We plan for future digital channel growth to come from expansion domestically and internationally.
Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. We plan for future digital channel growth to come from expansion domestically and internationally.
We plan to open approximately 8 Urban Outfitters stores and close approximately 8 Urban Outfitters stores due to lease expiration, globally, in fiscal 2024. We plan for future store growth to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements.
We plan to open approximately 6 Urban Outfitters stores and close approximately 12 Urban Outfitters stores primarily due to lease expiration, globally, in fiscal 2025. We plan for future store growth to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements.
Item 1. B usiness General We are a leading lifestyle products and services company that operates a portfolio of global consumer brands comprised of the Anthropologie, Free People, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands.
Item 1. B usiness General We are a leading lifestyle products and services company that operates a portfolio of global consumer brands including the Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly brands.
Our Wholesale segment net sales accounted for approximately 5.2% of consolidated net sales for fiscal 2023. Nuuly Segment Our Nuuly segment consists of the Nuuly brand, which includes Nuuly Rent and Nuuly Thrift. Nuuly Rent is a monthly women’s apparel subscription rental service that launched in July 2019.
Our Wholesale segment net sales accounted for approximately 4.6% of consolidated net sales for fiscal 2024. Nuuly Segment Our Nuuly segment consists of the Nuuly brand, which includes Nuuly Rent and Nuuly Thrift. Nuuly Rent is a monthly women’s apparel subscription rental service that launched in July 2019.
The Urban Outfitters wholesale division designs and sells the BDG and other own brand apparel collections to select department stores. We display our wholesale products in certain department stores using a shop-within-shop sales model.
The Urban Outfitters wholesale division designs and sells the BDG and "iets frans" apparel collections to select department stores. We display our wholesale products in certain department stores using a shop-within-shop sales model.
The Wholesale segment’s range of young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People brand and the BDG and other own brand apparel collections under the Urban Outfitters brand are sold through department and specialty stores worldwide, including Nordstrom, Dillard’s, digital businesses and our Retail segment.
The Wholesale segment’s range of young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People and FP Movement brands and the BDG and "iets frans" apparel collections under the Urban Outfitters brand are sold through department and specialty stores worldwide, including Nordstrom, Dillard’s, Dick's Sporting Goods, digital businesses and our Retail segment.
Our Nuuly Rent business operates in an evolving apparel subscription rental market in which our competitors offer varying types of subscription rental models and products that may have greater appeal to consumers. Our Nuuly Thrift business operates in a developing apparel and accessories resale market in which our competitors have sellers and products that may have greater appeal to customers.
Our Nuuly Rent business operates in an apparel subscription rental market in which our competitors offer varying types of subscription rental models and products that may have greater appeal to consumers.
The Free People Group also offers catalogs that market select merchandise, most of which is also available in our Free People and FP Movement stores. We plan for future digital channel growth to come from expansion domestically and internationally. The Free People Group’s North American Retail segment net sales accounted for approximately 17.5% for fiscal 2023.
Free People also offers catalogs that market select merchandise, most of which is also available in our Free People stores. We plan for future digital channel growth to come from expansion domestically and internationally. Free People’s North American Retail segment net sales accounted for approximately 20.1% for fiscal 2024.
We plan to open approximately two locations and close approximately one location in fiscal 2024. The Menus & Venues brand net sales accounted for less than 1.0% of consolidated net sales for fiscal 2023. Wholesale Segment The Wholesale segment consists of the Free People, FP Movement and Urban Outfitters brands.
We do not plan to open or close any locations in fiscal 2025. The Menus & Venues brand net sales accounted for less than 1.0% of consolidated net sales for fiscal 2024. Wholesale Segment The Wholesale segment includes the Free People, FP Movement and Urban Outfitters brands.
We plan for future digital channel growth to come from expansion domestically and internationally. The Anthropologie Group’s North American Retail segment net sales accounted for approximately 39.6% of consolidated net sales for fiscal 2023. European Retail segment net sales accounted for approximately 1.8% of consolidated net sales for fiscal 2023. Free People Group.
We plan for future digital channel growth to come from expansion domestically and internationally. Anthropologie’s North American Retail segment net sales accounted for approximately 41.7% of consolidated net sales for fiscal 2024. European Retail segment net sales accounted for approximately 1.6% of consolidated net sales for fiscal 2024. Free People.
As of January 31, 2023, we operated 263 Urban Outfitters stores, of which 183 were located in the United States, 18 were located in Canada and 62 were located in Europe, and sold merchandise through franchisee-owned stores in the Middle East.
As of January 31, 2024, we operated 262 Urban Outfitters stores, of which 179 were located in the United States, 17 were located in Canada and 66 were located in Europe, and sold merchandise through franchisee-owned stores in the Middle East.
Our stores are located in specialty centers, upscale street locations and enclosed malls. We plan to open approximately 8 Anthropologie Group stores and close approximately 6 Anthropologie Group stores due to lease expiration, globally, in fiscal 2024.
Stores average approximately 8,000 square feet of selling space. Our stores are located in specialty centers, upscale street locations and enclosed malls. We plan to open approximately 14 Anthropologie stores and close approximately 6 Anthropologie stores due to lease expiration, globally, in fiscal 2025.
We believe that our relations with our employees are excellent. Human Capital Oversight . The Board of Directors, as well as the Compensation and Leadership Development Committee (the “Compensation Committee”), oversee human capital management programs and efforts.
Except in certain international locations, our employees are not covered by a collective bargaining agreement. We believe that our relations with our employees are excellent. Human Capital Oversight . The Board of Directors, as well as the Compensation and Leadership Development Committee (the “Compensation Committee”), oversee human capital management programs and efforts.
The content of our Impact Report is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
The Company plans to provide an update on key metrics annually and release an Impact Report biannually. The content of our Impact Report and Impact Scorecards is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
See Note 17, “Segment Reporting,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Financial Information about Operations We aggregate our operations into three reportable segments, the Retail segment, the Wholesale segment and the Nuuly segment. See Note 17, “Segment Reporting,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Additional information relating to Lead With Creativity... to Make an Impact can be found in our 2021-2022 Impact Report, covering the period from October 1, 2021 through September 30, 2022, which is available at our website at www.urbn.com/impact . The Company plans to provide an update on key metrics annually and release an Impact Report biannually.
Additional information relating to Lead With Creativity... to Make an Impact can be found in our 2021-2022 Impact Report, covering the period from October 1, 2021 through September 30, 2022, as well as our 2022-2023 Impact Scorecard covering the period from September 1, 2022 through August 30, 2023, which are available at our website at www.urbn.com/impact .
We believe that by starting a conversation and interacting directly with our customers, most notably via Instagram, Facebook, TikTok, Pinterest and Google and our own mobile applications, we are more effective at understanding and serving their fashion needs. Customer Loyalty Programs Loyalty programs offer customers access to member-only benefits and rewards, which promotes brand loyalty.
We also are active in social media and third-party digital platforms. We believe that by starting a conversation and interacting directly with our customers, most notably via Instagram, Facebook, TikTok, Pinterest and Google and our own mobile applications, we are more effective at understanding and serving their fashion needs.
The Urban Outfitters brand offers UO Rewards, a customer loyalty program designed to create authentic, lasting relationships with customers by rewarding devoted members with reward coupons, exclusive offers and unique experiences. Members can earn and accumulate points based on purchase activity and engaging with the brand through social media.
Customer Loyalty Programs Loyalty programs offer customers access to member-only benefits and rewards, which promotes brand loyalty. The Urban Outfitters brand offers UO Rewards, a customer loyalty program designed to create authentic, lasting relationships with customers by rewarding devoted members with reward coupons, exclusive offers and unique experiences.
See Item 1A — "Risk Factors — Legal, Tax, Regulatory and Compliance Risks — Manufacturers and third-party vendors may not comply with our legal and social compliance program requirements, and we may be subject to risks related to environmental, social and governance activities which could adversely affect our reputation," for more information on our environmental, social and governance activities.
See Item 1A — "Risk Factors — Legal, Tax, Regulatory and Compliance Risks — ‘Manufacturers and third-party vendors may not comply with our legal and social compliance program requirements, which may subject us to risks related to evolving environmental, social and governance regulations and activities that may adversely affect our business’ and ‘If we fail to meet our global environmental and sustainability goals or if such goals do not meet the expectations of our customers or shareholders, our reputation could be adversely affected, which could adversely affect our business, financial performance and growth’," for more information on our environmental, social and governance activities.
Competition Our Retail and Wholesale segments compete with individual and chain fashion specialty brands as well as department stores, both in stores and online, in highly competitive domestic and international markets.
All systems are fully redundant and have full disaster recovery plans either within our cloud providers or our own data centers. Competition Our Retail and Wholesale segments compete with individual and chain fashion specialty brands as well as department stores, both in stores and online, in highly competitive domestic and international markets.
We have achieved compounded annual sales growth of approximately 6% over the past five years, with sales of approximately $4.8 billion during the fiscal year ended January 31, 2023.
We have achieved compounded annual sales growth of approximately 5% over the past five years, with sales of approximately $5.2 billion during the fiscal year ended January 31, 2024. We operate under three reportable segments – Retail, Wholesale and Nuuly.
The Anthropologie brand tailors its merchandise and inviting store environment to sophisticated and contemporary women aged 28 to 45. The Anthropologie brand’s unique and eclectic internally designed and third-party brand product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness.
The Anthropologie brand’s unique and eclectic internally designed and third-party brand product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor.
The Free People brand offers a unique merchandise mix of casual women’s apparel, intimates, FP Movement activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Retail stores average approximately 2,000 square feet of selling space.
The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women's apparel, intimates, activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials.
Members are given free shipping benefits, birthday discounts, receipt look up, exclusive offers, early access to special collections and invitations to “Anthro Events” experiences. In February 2021, we began testing a paid loyalty program called UP.
AnthroPerks is a customer loyalty program that is designed to deliver benefits and experiences to help make our customers’ shopping journey in-store and online easier and more inspirational. Members are given free shipping benefits, birthday discounts, receipt look up, exclusive offers, early access to special collections and invitations to “Anthro Events” experiences.
We operate seven distribution and fulfillment centers worldwide to support our Retail and Wholesale segments in the United States, Europe and Canada, including the fulfillment of catalog, website and mobile application orders around the world. We own a 291,000 square foot distribution center in Gap, Pennsylvania, which receives and distributes approximately half of our retail store merchandise in North America.
We operate multiple distribution and fulfillment centers worldwide to support our Retail, Wholesale and Nuuly segments in the United States, Europe and Canada. Retail Segment Our Retail segment distribution and fulfillment centers receive and distribute our retail store merchandise and fulfill catalog, website and mobile application orders around the world.
We have over 52 years of experience creating and managing retail stores that offer highly differentiated collections of fashion apparel, accessories and home goods, among other things, in inviting and dynamic store settings. Our core strategy is to provide unified environments that establish emotional bonds with the customer, through Company-owned stores and franchisee-owned stores.
Our Retail segment includes our store and digital channels and includes our Anthropologie, Free People, FP Movement and Urban Outfitters brands. We have over 53 years of experience creating and managing retail stores that offer highly differentiated collections of fashion apparel, accessories and home goods, among other things, in inviting and dynamic store settings.
We host digital and business applications across cloud infrastructure as well as have our own fully redundant data centers, located at our home offices in the Philadelphia Navy Yard and at our Reno fulfillment center. All systems are fully redundant and have full disaster recovery plans either within our cloud providers or our own data centers.
Nuuly Rent uses a custom-built digital platform that helps us manage merchandising functions, customer information and service, financial accounting and fulfillment of customer orders. We host digital and business applications across cloud infrastructure as well as have our own fully redundant data centers, located at our home offices in the Philadelphia Navy Yard and at our Reno fulfillment center.
Human Capital The Company is built on self-expression and individuality. We are passionate about celebrating everyone for who they are and the unique perspectives they bring to the table. We value diversity and strive to promote inclusion throughout our entire community. Employees. As of January 31, 2023, we employed approximately 26,000 people, approximately 47% of whom were full-time employees.
Human Capital The Company is built on self-expression and individuality. We are passionate about celebrating everyone for who they are and the unique perspectives they bring to the table. The creativity, passion and hard work of our people is a key input into our success. Employees.
The brand also has a wedding collection consisting of wedding dresses, bridesmaid dresses, party dresses, bridal accessories and decor. A catalog is offered in North America that markets select merchandise, most of which is also available in Anthropologie brand stores.
A catalog is offered in North America that markets select merchandise, most of which is also available in Anthropologie brand stores. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience.
Of the 188 Free People Group stores open as of January 31, 2023, 31 were FP Movement stores, all located in the United States. We plan to open approximately 17 new Free People Group stores (including 10 FP Movement stores) and close approximately 1 Free People Group store due to lease expiration, globally, in fiscal 2024.
We plan to open approximately 38 new Free People stores (including 25 FP Movement stores) and close approximately 3 Free People stores due to lease expiration, globally, in fiscal 2025.
Upon reaching the specified point threshold, members are issued a reward coupon which can be redeemed for both in-store and online purchases. The Anthropologie brand offers AnthroPerks. AnthroPerks is a customer loyalty program that is designed to deliver benefits and experiences to help make our customers’ shopping journey in-store and online easier and more inspirational.
Members can earn and accumulate points 4 based on purchase activity and engaging with the brand through social media. Upon reaching the specified point threshold, members are issued a reward coupon which can be redeemed for both in-store and online purchases. The Anthropologie brand offers AnthroPerks.
Our stores are located in enclosed malls, upscale street locations and specialty centers. 2 As of January 31, 2023, we operated 188 Free People Group stores, of which 174 were located in the United States, 3 were located in Canada and 11 were located in Europe.
As of January 31, 2024, we operated 198 Free People stores, of which 183 were located in the United States, 3 were located in Canada and 12 were located in Europe. Of the 198 Free People stores open as of January 31, 2024, 38 were FP Movement stores, all located in the United States.
The Wholesale segment sells through department and specialty stores worldwide, digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets apparel, intimates and activewear. Our Nuuly segment consists of the Nuuly brand, which includes Nuuly Rent and Nuuly Thrift and offers customers a more sustainable way to explore fashion.
We operate a Wholesale segment under the Free People, FP Movement and Urban Outfitters brands. The Wholesale segment sells through department and specialty stores worldwide, digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes.
In addition to retail stores, we offer our products and services directly to our customers through our websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers. The Menus & Venues brand includes various casual dining concepts and event venues. We operate a Wholesale segment under the Free People, FP Movement and Urban Outfitters brands.
Our core strategy is to provide unified environments that establish emotional bonds with the customer, through Company-owned stores and franchisee-owned stores. In addition to retail stores, we offer our products and services directly to our customers through our websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers.
The number of part-time employees fluctuates depending on seasonal needs. Of our total employees, approximately 1% work in the Wholesale segment, 4% work in the Nuuly segment and the remaining 95% work in our Retail segment. Except in certain international locations, our employees are not covered by a collective bargaining agreement.
As of January 31, 2024, we employed approximately 28,000 people, approximately 39% of whom were full-time employees. The number of part-time employees fluctuates depending on seasonal needs. Of our total employees, approximately 1% work in the Wholesale segment, 6% work in the Nuuly segment and the remaining 93% work in our Retail segment.
Urban Outfitters’ North American Retail segment net sales accounted for approximately 23.0% of consolidated net sales for fiscal 2023. European Retail segment net sales accounted for approximately 8.9% of consolidated net sales for fiscal 2023. Anthropologie Group. The Anthropologie Group consists of the Anthropologie and Terrain brands.
Urban Outfitters’ North American Retail segment net sales accounted for approximately 17.7% of consolidated net sales for fiscal 2024. European Retail segment net sales accounted for approximately 8.2% of consolidated net sales for fiscal 2024. Anthropologie. The Anthropologie brand tailors its merchandise and inviting store environment to sophisticated and contemporary women aged 28 to 45.
As of January 31, 2023, we operated 238 Anthropologie Group stores, of which 207 were located in the United States, 10 were located in Canada and 21 were located in Europe, and sold merchandise through franchisee-owned stores in the Middle East. Stores average approximately 8,000 square feet of selling space.
Terrain’s product offering includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. As of January 31, 2024, we operated 237 Anthropologie stores, of which 209 were located in the United States, 9 were located in Canada and 19 were located in Europe, and sold merchandise through franchisee-owned stores in the Middle East.
We lease a 309,000 square foot fulfillment center located in Bristol, Pennsylvania, and we also lease a 227,000 square foot warehouse located in Fairless Hills, 5 Pennsylvania. We plan to open a 604,000 square foot fulfillment center located in Raymore, Missouri, which will be used to further support our Nuuly Rent operations. The lease will commence in fiscal 2024.
In fiscal 2024 we entered into a lease for a 604,000 square foot fulfillment center located in Raymore, Missouri, which commenced operations in the first quarter of fiscal 2025. 5 Information Systems.
We include diversity and inclusion initiatives as bonus goals for members of the executive team to drive progress towards our goals. We have offered bias training to our entire field and home office organization and fulfillment center management.
In addition to the ERGs, the executive team has implemented a listening strategy, which includes an all-company engagement survey, onboarding, exit and inclusion and belonging surveys, as well as opportunities for employees to speak directly with executives. We have offered bias training to our entire field and home office organization and fulfillment center management.
Our ERGs empower employees to share their voices, ideas and passions with the Diversity & Inclusion Committee and the Company community at large. In addition to the ERGs, the executive team has engaged in the design and implementation of a listening strategy, which includes an all-company engagement survey.
The Company has a suite of Employee Resource Groups (“ERGs”) that enable employees to network, find mentors and sponsors and share their ideas and passions with the executive team and the Company community at large.
We began construction on the facility during fiscal 2020 and completed the installation of the remaining material handling equipment and became fully operational during fiscal 2022. Once the Peterborough facility was fully operational, we exited our existing distribution and fulfillment centers in Rushden, England during fiscal 2022.
The lease commenced in fiscal 2022 and expired in fiscal 2024. Our European Retail segment operations are supported by a 400,000 square foot omni-channel fulfillment center we own in Peterborough, England. The facility became fully operational during fiscal 2022, at which point we exited our existing distribution and fulfillment centers in Rushden, England.
Removed
The COVID-19 pandemic had a negative impact on our results for the fiscal year ended January 31, 2021 and continued to impact our operations for the fiscal years ended January 31, 2023 and 2022. See Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations–Overview– Current Trends for further discussion.
Added
Our Nuuly segment includes Nuuly brand, which offers customers a more sustainable way to explore fashion through a monthly women’s apparel subscription rental service.
Removed
We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment includes our store and digital channels and consists of our Anthropologie, Free People, FP Movement, Terrain, Urban Outfitters and Menus & Venues brands.
Added
For example, our fiscal 2024 ended on January 31, 2024. As used in this document, unless otherwise defined, "Anthropologie" refers to our Anthropologie and Terrain brands and "Free People" refers to our Free People and FP Movement brands.
Removed
Nuuly Rent is a monthly women’s apparel subscription rental service. Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell any brand of women’s, men’s and kids’ apparel, shoes and accessories.
Added
Retail stores average approximately 2,000 square feet of selling space (including FP Movement retail stores which average approximately 1,000 square feet of selling space). Our stores are located in enclosed malls, upscale street locations and specialty centers.
Removed
The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Terrain’s product offering includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories.
Added
Subscribers are also able to purchase the rented product. Nuuly Thrift is a peer-to-peer resale marketplace which the Company plans to wind down operations for in fiscal 2025. Nuuly segment net sales accounted for approximately 4.6% of consolidated net sales for fiscal 2024.
Removed
The Free People Group consists of the Free People and FP Movement brands. Our Free People and FP Movement retail stores primarily offer private label merchandise targeted to young contemporary women aged 25 to 30.
Added
Wholesale Segment Our Wholesale segment operations are predominantly supported by our omni-channel fulfillment center in Gap, Pennsylvania, with the remainder supported by our omni-channel fulfillment center in Peterborough, England. Nuuly Segment Nuuly Rent operations are primarily conducted from a 309,000 square foot fulfillment center we lease in Bristol, Pennsylvania.
Removed
Subscribers are also able to purchase the rented product. Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell any brand of women’s, men’s and kids’ apparel, shoes and accessories from any brands.
Removed
Sellers on Nuuly Thrift can transfer their earnings to their bank account or convert them to “Nuuly Cash,” a gift card with a bonus to be used at any of the Company’s brands. Nuuly Thrift earns a commission based on sales made in the marketplace. Nuuly segment net sales accounted for approximately 2.7% of consolidated net sales for fiscal 2023.
Removed
We also are active in social media and third-party digital platforms. We believe that the traditional method of a one-way communication to customers is no longer 4 enough.
Removed
In exchange for an annual fee, UP provides membership benefits across our entire portfolio of brands, including a gift card, free standard shipping and free returns on all orders, a discount on orders, early access to products and exclusive events and a discount on the monthly Nuuly subscription fee. We plan to continue our test pilot through fiscal 2024.

… 8 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+16 added−13 removed94 unchanged
Biggest changeDue to our international operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and liabilities denominated in currencies other than the U.S. dollar. In addition, certain of our subsidiaries transact in currencies other than their functional currency, including intercompany transactions, which results in foreign currency transaction gains or losses.
Biggest changeFluctuations in foreign currency exchange rates could have a material adverse impact on our business. Due to our international operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and liabilities denominated in currencies other than the U.S. dollar.
Our operating results fluctuate from period to period. Our business experiences seasonal fluctuations in net sales and operating income, with a more significant portion of net income typically realized in the second half of each year predominantly due to the year-end holiday period.
Our operating results fluctuate from period to period. Our business experiences seasonal fluctuations in net sales and operating income, with a more significant portion of net sales typically realized in the second half of each year predominantly due to the year-end holiday period.
Any of our rights to indemnification from sellers to us, even if obtained, may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business 13 or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business and financial condition.
Any of our rights to indemnification from sellers to us, even if obtained, may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business and financial condition.
The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements, such as the GDPR and CCPA. With a heightened degree of public awareness and scrutiny regarding information 14 security and privacy, customers have a high expectation that companies will adequately protect their personal information from cyber attack or other security breaches.
The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements, such as the GDPR and CCPA. With a heightened degree of public awareness and scrutiny regarding information security and privacy, customers have a high expectation that companies will adequately protect their personal information from cyber attack or other security breaches.
Labor shortages and increased employee turnover could also increase our labor costs. This in turn could lead us to increase prices, and if customers respond negatively to such price increases, could adversely impact our sales, gross margin and operating income. We are also subject to risks related to other store and distribution and fulfillment center expenses and operational costs.
Labor shortages and increased employee turnover could also increase our labor costs. This in turn could lead us to increase prices, and if customers respond negatively to such price increases, could adversely impact our sales, gross margin and operating income. We are also subject to risks related to other store and distribution and 14 fulfillment center expenses and operational costs.
Some of these economic conditions include inflation, wages and employment, consumer debt, reductions in net worth based on severe market declines, residential real estate and mortgage markets, taxation, fuel and energy prices, interest rates, volatility in credit markets, credit availability, political and economic crises and other macroeconomic factors.
Some of these economic conditions include inflation, wages and employment, consumer debt, reductions in net worth based on severe market declines, residential real estate and mortgage markets, taxation, grocery, fuel and energy prices, interest rates, volatility in credit markets, credit availability, political and economic crises and other macroeconomic factors.
Our Anthropologie Group and Free People Group stores also face competition from small boutiques that offer an individualized shopping experience similar to the one we strive to provide to our target customers. Additionally, the internet and other technologies facilitate competitive entry and comparison shopping in our Retail and Nuuly segments.
Our Anthropologie and Free People stores also face competition from small boutiques that offer an individualized shopping experience similar to the one we strive to provide to our target customers. Additionally, the internet and other technologies facilitate competitive entry and comparison shopping in our Retail and Nuuly segments.
Also, others may assert rights 15 in, or ownership of, our trademarks and other intellectual property, and we may not be able to successfully resolve these types of conflicts to our satisfaction. In addition, we face additional risks as we continue to expand our business outside the United States.
Also, others may assert rights in, or ownership of, our trademarks and other intellectual property, and we may not be able to successfully resolve these types of conflicts to our satisfaction. In addition, we face additional risks as we continue to expand our business outside the United States.
Additional legal and regulatory requirements (such as the “conflict minerals” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010), and the fact that foreign laws occasionally conflict with domestic laws, have increased the complexity of the regulatory environment and the cost of compliance.
Additional legal and regulatory requirements (such as the “conflict minerals” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection 16 Act of 2010), and the fact that foreign laws occasionally conflict with domestic laws, have increased the complexity of the regulatory environment and the cost of compliance.
While, to the best of our knowledge, we have not experienced any material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result of a security breach or cyber attack that could materially increase financial risk to the Company or our customers, such a security breach or cyber attack could adversely affect our business and operations, including by damaging our reputation and our relationships with our customers, employees and investors, exposing us to litigation, fines, penalties or remediation costs and inhibiting our ability to accept debit and credit cards as forms of payment.
While, to the best of our knowledge, we have not experienced any material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result of a security breach or cyber attack that could materially increase financial risk to the Company or our customers, such a security breach or cyber attack could adversely affect our business and operations, including by damaging our reputation and our relationships with our customers, employees and shareholders, exposing us to litigation, fines, penalties or remediation costs and inhibiting our ability to accept debit and credit cards as forms of payment.
If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of our funds.
If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in 11 the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of our funds.
Among other factors, (1) a failure to sufficiently innovate or maintain effective marketing strategies and (2) U.S. and foreign laws and regulations that make it more difficult or costly to digitally market, such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”), may adversely impact our ability to maintain brand relevance and drive increased sales.
Among other factors, (1) a failure to sufficiently innovate or maintain effective marketing strategies and (2) a growing number of U.S. and foreign laws and regulations that make it more difficult or costly to digitally market, such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”), may adversely impact our ability to maintain brand relevance and drive increased sales.
To the extent that our vendors are located overseas or, in the case of third-party vendors, rely on overseas sources for a large portion of their products, the following risks may adversely impact our business: • Any event causing a disruption of imports, including the imposition of increased security or regulatory requirements applicable to imported goods, war, public health concerns (including COVID-19), acts of terrorism, natural disasters and port security considerations or labor disputes; • New initiatives may be proposed that may have an impact on the trading status of certain countries and may include retaliatory duties or other trade sanctions that, if enacted, could increase the cost of products purchased from suppliers in such countries or restrict the importation of products from such countries; • Changes to U.S. and foreign trade policies, including the enactment of tariffs, border adjustment taxes, changes resulting from Brexit or increases in duties or quotas applicable to the products we sell that could increase the cost and reduce the supply of products available to us; • Impacts of the war between Russia and Ukraine and from the related sanctions imposed by the United States, the European Union, United Kingdom and others; • Changes resulting from the United States-Mexico-Canada Agreement (USMCA); • Significant labor issues, such as strikes or shortage of workers to manage inbound vessels at any of our ports in the United States, which could make it difficult or impossible for us to bring foreign-sourced products into the United States; • Financial or political instability in any of the countries in which the products we purchase are manufactured, if the instability affects the production or export of merchandise from those countries; • A significant disruption in the supply of the fabrics or raw materials used by our vendors in the manufacture of our products, as our vendors may not be able to locate alternative suppliers of materials of comparable quality at an acceptable price, or at all; • Fluctuation in the prices of raw materials, such as cotton and synthetic fabrics, as increases in such costs can increase the cost of merchandise and potentially lead to reduced consumer demand or reduced margins; • The shortage of transportation capacity (such as the availability of inbound ocean containers and vessels, cargo space for inbound airplanes, and trucks to transport products from ports to our distribution facilities) can result in transportation cost 10 premiums and also delay delivery of merchandise to our distribution facilities leading to an increase in markdowns both of which can adversely affect our gross profit; • The cost of fuel is a significant component in transportation costs; therefore, increases in petroleum prices can adversely affect our gross profit; • Increased regulation related to environmental costs, such as carbon taxes and emissions management systems, which could adversely affect our costs of doing business, including utility, transportation and logistics costs; and • Decreases in the value of the U.S. dollar relative to foreign currencies could increase the cost of products we purchase from overseas vendors.
To the extent that our vendors are located overseas or, in the case of third-party vendors, rely on overseas sources for a large portion of their products, the following risks may adversely impact our business: • Any event causing a disruption of imports, including the imposition of increased security or regulatory requirements applicable to imported goods, war, public health concerns (including COVID-19), acts of terrorism, natural disasters and port security considerations or labor disputes; • New initiatives may be proposed that may have an impact on the trading status of certain countries and may include retaliatory duties or other trade sanctions that, if enacted, could increase the cost of products purchased from suppliers in such countries or restrict the importation of products from such countries; • Changes to U.S. and foreign trade policies, including the enactment of tariffs, border adjustment taxes, changes resulting from Brexit or increases in duties or quotas applicable to the products we sell that could increase the cost and reduce the supply of products available to us; • Impacts of the war between Russia and Ukraine, the related sanctions imposed by the United States, the European Union, United Kingdom and others, and the conflict in the Middle East which could result in delays in shipments through the region and additional transportation costs; • Changes resulting from the United States-Mexico-Canada Agreement (USMCA); • Significant labor issues, such as strikes or shortage of workers to manage inbound vessels at any of our ports in the United States or abroad, which could make it difficult or impossible for us to bring foreign-sourced products into the United States; • Financial or political instability in any of the countries in which the products we purchase are manufactured, if the instability affects the production or export of merchandise from those countries; • A significant disruption in the supply of the fabrics or raw materials used by our vendors in the manufacture of our products, as our vendors may not be able to locate alternative suppliers of materials of comparable quality at an acceptable price, or at all; • Fluctuation in the prices of raw materials, such as cotton and synthetic fabrics, as increases in such costs can increase the cost of merchandise and potentially lead to reduced consumer demand or reduced margins; 10 • The shortage of transportation capacity (such as the availability of inbound ocean containers and vessels, cargo space for inbound airplanes, and trucks to transport products from ports to our distribution facilities) can result in transportation cost premiums and also delay delivery of merchandise to our distribution facilities leading to an increase in markdowns both of which can adversely affect our gross profit; • The cost of fuel is a significant component in transportation costs; therefore, increases in petroleum prices can adversely affect our gross profit; • Increased regulation related to environmental costs, such as carbon taxes and emissions management systems, which could adversely affect our costs of doing business, including utility, transportation and logistics costs; and • Decreases in the value of the U.S. dollar relative to foreign currencies could increase the cost of products we purchase from overseas vendors.
Our success depends in part on our ability to effectively predict and respond to changing fashion tastes and consumer demands, and to translate market trends into appropriate, saleable product offerings.
Our success depends in part on our ability to effectively predict and respond to changing fashion tastes and consumer demands, and to translate market trends into appropriate product offerings.
In addition, various governmental authorities in 16 jurisdictions in which we do business regulate the quality and safety of the merchandise we sell.
In addition, various governmental authorities in jurisdictions in which we do business regulate the quality and safety of the merchandise we sell.
There can be no assurances that our policies, goals or actions will be perceived as adequate. Any failure or perceived failure to achieve our goals or demonstrate progress towards the environmental, social and governance ideals of our customers and investors could harm our reputation and value of our brands, which could adversely affect our business, financial performance, and growth.
There can be no assurances that our ESG policies, goals or actions will be perceived as adequate. Any failure or perceived failure to achieve our goals or demonstrate progress towards the environmental, social and governance ideals of our customers and shareholders could harm our reputation and value of our brands, which could adversely affect our business, financial performance and growth.
Brexit could also result in similar referenda or votes in other European countries in which we do business. The United Kingdom’s withdrawal could adversely impact consumer and investor confidence, particularly in the United Kingdom, and the level of consumer purchases of discretionary items and retail products, including our products.
Brexit could also result in similar 12 referenda or votes in other European countries in which we do business. The United Kingdom’s withdrawal could adversely impact consumer and shareholder confidence, particularly in the United Kingdom, and the level of consumer purchases of discretionary items and retail products, including our products.
In the event of war (including the war between Russia and Ukraine), terrorism, civil unrest or other violence, our ability to obtain merchandise available for sale in our stores or on our websites may be negatively impacted.
In the event of war (including the conflict in the Middle East and the war between Russia and Ukraine), terrorism, civil unrest or other violence, our ability to obtain merchandise available for sale in our stores or on our websites may be negatively impacted.
Our stores are located in public areas where large numbers of people typically gather. Terrorist attacks, threats of terrorist attacks, civil unrest, or health epidemics and pandemics involving public areas could cause people not to visit areas where our stores are located.
Our stores are located in public areas where large numbers of people typically gather. Terrorist attacks, threats of terrorist attacks, civil unrest, or health epidemics and pandemics (such as COVID-19) involving public areas could cause people not to visit areas where our stores are located.
Certain events, such as the uncertainty as to the on-going hostilities in Ukraine, the ultimate scope and duration of COVID-19, and uncertainty with respect to trade policies, tariffs and government regulations affecting trade between the U.S. and other countries, have increased global economic and political uncertainty in recent years and could result in volatility of foreign currency exchange rates as these events develop.
Certain events, such as the uncertainty as to the on-going hostilities in Ukraine and the Middle East, the COVID-19 pandemic and uncertainty with respect to trade policies, tariffs and government regulations affecting trade between the U.S. and other countries, have increased global economic and political uncertainty in recent years and could result in volatility of foreign currency exchange rates as these events develop.
Our operations, in particular our digital sales, are subject to numerous risks, including reliance on third-party computer hardware/software, rapid technological change, liability for online content, violations of state or federal laws, including those relating to online privacy, credit card fraud, risks related to the failure of the information technology systems that operate our websites, including computer viruses, telecommunications failures and electronic break-ins and similar disruptions.
Our operations, in particular our digital sales, are subject to numerous risks, including reliance on third-party computer hardware/software, rapid technological change (including the successful utilization of data analytics, artificial intelligence and machine learning), liability for online content, violations of state or federal laws, including those relating to online privacy, credit card fraud, risks related to the failure of the information technology systems that operate our websites, including computer viruses, telecommunications failures and electronic break-ins and similar disruptions.
The working group is comprised of operational management representatives and is responsible for recommending policies and goals to the Impact Committee, implementing policies established by the Impact Committee, and tracking and reporting to the Impact Committee on progress towards goals falling within the working group’s ambit. These policies and goals and their status are published in the Company's Impact Report.
The working groups are comprised of operational management representatives and are responsible for recommending policies and goals to the Impact Committee, implementing policies established by the Impact Committee, and tracking and reporting to the Impact Committee on progress towards goals falling within the working groups' ambit. These policies and goals and their status are published in the Company's Impact Report.
In December 2020, the United Kingdom and the European Union entered into an agreement that defines their future relationship, including terms of trade, which resulted in new tariffs on goods imported to the United Kingdom from the European Union that were manufactured elsewhere, and required additional administrative effort to import and export goods, adding friction and cost to transportation.
In December 2020, the United Kingdom and the European Union entered into an agreement that defines their future relationship, including terms of trade, which resulted in new tariffs on foreign produced goods imported into the United Kingdom and required additional administrative effort to import and export goods, adding friction and cost to transportation.
Manufacturers and third-party vendors may not comply with our legal and social compliance program requirements, and we may be subject to risks related to environmental, social and governance activities, which could adversely affect our reputation. We have a manufacturer compliance program that is monitored on a regular basis by our buying offices.
Manufacturers and third-party vendors may not comply with our legal and social compliance program requirements, which may subject us to risks related to evolving environmental, social and governance regulations and activities that may adversely affect our business. We have a manufacturer compliance program that is monitored on a regular basis by our buying offices.
War, terrorism, civil unrest, other violence, or public health crises may negatively impact availability of our merchandise, customer traffic to our stores or otherwise adversely impact our business.
War, terrorism, civil unrest, other violence, or public health crises, including pandemics such as COVID-19, may negatively impact availability of our merchandise, customer traffic to our stores or otherwise adversely impact our business.
The Impact Committee also maintains a functional working group, which focuses on three areas: Environmental & Social, Data Privacy & Security, and Governance.
The Impact Committee also maintains functional working groups, which focus on three areas: Environmental & Social, Data Privacy & Security, and Governance.
If any of these events were to occur, we may be required to suspend operations in some or all of our stores in the impacted areas, which could have a material adverse impact on our business, financial condition and results of operations. Fluctuations in foreign currency exchange rates could have a material adverse impact on our business.
If any of these events were to occur, we may be required to suspend operations temporarily or for an extended period of time in some or all of our stores in the impacted areas, which could have a material adverse impact on our business, financial condition and results of operations.
Conversely, if competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline. Damage or disruption to our distribution or fulfillment centers could have material adverse effects on our operations.
Conversely, if competitive pressures or other factors prevent us from offsetting increased labor costs by increases in our prices to customers, our profitability may decline. Damage or disruption to our distribution or fulfillment centers could have material adverse effects on our operations. We operate multiple distribution and fulfillment centers worldwide to support our Retail, Wholesale and Nuuly segments.
Strategic Risks We may not be successful in expanding our business, executing our omni-channel strategy, opening new retail stores or extending our existing store leases. The retail environment is rapidly evolving with customer shopping preferences continuing to shift to digital channels.
Any such loss or lack of timely access to these funds could adversely impact our short-term liquidity and operations. Strategic Risks We may not be successful in expanding our business, executing our omni-channel strategy, opening new retail stores or extending our existing store leases. The retail environment is rapidly evolving with customer shopping preferences continuing to shift to digital channels.
Although we have not experienced any interruptions or shutdowns of our systems for any material length of time for the reasons described above, such disruptions could lead to delays in our business operations and, if significant, affect our sales and profitability.
Although we have not experienced any interruptions or shutdowns of our systems for any material length of time for the reasons described above, such disruptions could lead to delays in our business operations and, if significant, affect our sales and profitability. 13 If we are unable to safeguard against security breaches with respect to our information technology systems, our business and our reputation may be adversely affected.
If our stores fail to achieve, or are unable to sustain, acceptable revenue, profitability and cash flow levels, we may incur additional store asset impairment charges, significant costs associated with closing those stores or both, which could adversely affect our results of operations and financial condition. 12 We may not be successful expanding our business internationally and our ability to conduct business in international markets may be adversely affected by legal, regulatory, political, economic, and public health risks.
If our stores fail to achieve, or are unable to sustain, acceptable revenue, profitability and cash flow levels, we may incur additional store asset impairment charges, significant costs associated with closing those stores or both, which could adversely affect our results of operations and financial condition.
As a result, our sales, gross profit and gross profit rate from international operations will be negatively impacted during periods of a strengthened U.S. dollar relative to the functional currencies of our foreign subsidiaries.
In addition, certain of our subsidiaries transact in currencies other than their functional currency, including intercompany transactions, which results in foreign currency transaction gains or losses. As a result, our sales, gross profit and gross profit rate from international operations will be negatively impacted during periods of a strengthened U.S. dollar relative to the functional currencies of our foreign subsidiaries.
There is no assurance that we will be able to continue to successfully maintain or expand our digital sales channels and respond to shifting consumer traffic patterns and digital buying trends.
There is no assurance that we will be able to continue to successfully maintain or expand our digital sales channels and respond to shifting consumer traffic patterns and digital buying trends. Our inability to adequately respond to 9 these risks and uncertainties or successfully maintain and expand our digital business could have an adverse impact on our results of operations.
If we are unable to safeguard against security breaches with respect to our information technology systems, our business and our reputation may be adversely affected. During the course of business, we obtain and transmit confidential customer, employee, vendor and Company information through our information technology systems. The protection of customer, employee, vendor and Company data is critical.
During the course of business, we obtain and transmit confidential customer, employee, vendor and Company information through our information technology systems. The protection of customer, employee, vendor and Company data is critical.
If our third-party vendors fail to comply with our social compliance program, our reputation may be adversely affected. We maintain an Impact Committee, co-chaired by our Chief Sourcing Officer and Chief Administrative Officer and reporting to our Nominating and Governance Committee, to set sustainability policies and goals, provide oversight of those policies, and track and report progress toward our goals.
We maintain an Impact Committee, co-chaired by our Chief Sourcing Officer and Chief Administrative Officer and reporting to our Board of Directors, to set sustainability policies and goals, provide oversight of those policies, and track and report progress toward our goals.
Our Wholesale segment competes with numerous wholesale companies, many of whose products have a wider distribution, based on the quality, fashion and price of its product offerings. Our Nuuly Rent business operates in an evolving apparel subscription rental market in which our competitors offer varying types of subscription rental models and products that may have greater appeal to consumers.
Our Nuuly Rent business operates in an apparel subscription rental market in which our competitors offer varying types of subscription rental models and products that may have greater appeal to consumers.
We depend on key personnel and may not be able to retain or replace these employees or recruit additional qualified personnel, which could adversely impact our business. We believe that we have benefited substantially from the leadership and experience of our senior executives, including our co-founder, Chairman of the Board and Chief Executive Officer, Richard A. Hayne.
We believe that we have benefited substantially from the leadership and experience of our senior executives, including our co-founder, Chairman of the Board and Chief Executive Officer, Richard A. Hayne.
In addition, this period of uncertainty could result in an increase in phishing and other scams, fraud, money laundering, theft and other criminal activity. Our efforts to protect customer, employee, vendor and Company information may also be adversely impacted by data security or privacy breaches that occur at our third-party vendors or unrelated third parties.
Our efforts to protect customer, employee, vendor and Company information may also be adversely impacted by data security or privacy breaches that occur at our third-party vendors or unrelated third parties whose information technology systems we use directly or indirectly.
In addition, our operations outside of the United States may cause greater volatility in our effective tax rate. We are subject to numerous regulations and legal matters that could adversely affect our business.
In addition, our operations outside of the United States may cause greater volatility in our effective tax rate. The Organization for Economic Cooperation and Development (“OECD”) published a proposal for the establishment of a global minimum tax rate of 15% (“Pillar Two").
Removed
Our inability to adequately respond to these risks and uncertainties or successfully maintain and expand our digital business could have an adverse impact on our results of operations. 9 In addition, some of our third-party vendors offer products directly to consumers and certain of our competitors.
Added
In addition, some of our third-party vendors offer products directly to consumers and certain of our competitors. Our Wholesale segment competes with numerous wholesale companies, many of whose products have a wider distribution, based on the quality, fashion and price of its product offerings.
Removed
Our Nuuly Thrift business operates in a developing apparel and accessories resale market in which our competitors have sellers and products that may have greater appeal to consumers.
Added
We may not be successful expanding our business internationally and our ability to conduct business in international markets may be adversely affected by legal, regulatory, political, economic, and public health risks.
Removed
Any such loss or lack of timely access to these funds could adversely impact our short-term liquidity and operations. 11 The Coronavirus pandemic has and may continue to materially and adversely affect our business operations globally.
Added
In addition, this period of uncertainty could result in an increase in phishing and other scams, fraud, money laundering, theft and other criminal activity.
Removed
The continuing impacts of the COVID-19 pandemic are highly unpredictable and volatile and are affecting certain of our business operations, demand for our products and services, in-stock positions, costs of doing business, availability of labor, access to inventory, supply chain operations, our ability to predict future performance, and our financial performance, among other things.
Added
See Item 1C: Cybersecurity for further discussion. We depend on key personnel and may not be able to retain or replace these employees or recruit additional qualified personnel, which could adversely impact our business.
Removed
The extent to which the coronavirus pandemic will continue to impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including the resurgence of the coronavirus and its related variants, the efficacy of the vaccine and related vaccination efforts and regulatory actions taken to mitigate the impacts of the coronavirus pandemic.
Added
See Item 1: Business—Company Operations— Distribution for more information on our distribution and fulfillment centers.
Removed
Since 2020, the COVID-19 pandemic has resulted in widespread and continuing impacts on the global economy and on our employees, customers, suppliers and other people and entities with which we do business. The pandemic has and may continue to impact the global supply chain, which would negatively affect the flow or availability of our products.
Added
If our third-party vendors fail to comply with our social compliance program, our reputation may be adversely affected. Various governing bodies and regulators are increasingly focused on Environmental, Social and Governance ("ESG") matters and related disclosures.
Removed
Further, customer demand for certain products has and may continue to fluctuate as customer behaviors change as a result of the pandemic, which may challenge our ability to anticipate and/or adjust inventory levels to meet that demand.
Added
These developments have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting ESG-related requirements and expectations.
Removed
Other effects and future uncertainties include, but are not limited to: • Evolving macroeconomic factors, including general economic uncertainty, inflation, unemployment rates, and recessionary pressures; • Changes in labor markets affecting us and our suppliers; • Any preventative or protective actions that governments may implement, or we may implement to protect the health and safety of our employees and customers; • The long-term impact of the pandemic on our business, including consumer behaviors; and • Disruption and volatility within the financial and credit markets.
Added
For example, developing and acting on ESG-related initiatives, including design, sourcing and operations decisions, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time-consuming and is subject to evolving reporting standards, including "The Enhancement and Standardization of Climate-Related Disclosures for Investors" issued by the SEC on March 6, 2024, the Corporate Sustainability Reporting Directive ("CSRD") issued by the European Commission on December 22, 2023, and Senate Bill (SB) 253 "Climate Corporate Data Accountability Act" and SB 261 "Greenhouse gases; climate-related financial risk" issued by the State of California on October 7, 2023. 15 If we fail to meet our global environmental and sustainability goals or if such goals do not meet the expectations of our customers or shareholders, our reputation could be adversely affected, which could adversely affect our business, financial performance and growth.
Removed
To the extent that COVID-19 continues to adversely affect the U.S. and global economy, our business, results of operations, cash flows, or financial condition, it may also heighten other risk factors included elsewhere within this “Risk Factors” section of our Form 10-K. See Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Current Trends for further discussion.
Added
We may also communicate certain ESG-related initiatives and goals in our SEC filings or in other public disclosures, such as the Company's Impact Report.
Removed
We operate seven distribution and fulfillment centers worldwide to support our Retail and Wholesale segments in the United States, Europe and Canada, including the fulfillment of catalog, website and mobile application orders around the world.
Added
These ESG-related initiatives and goals could be difficult and expensive to implement, the technologies needed to implement them may not be cost-effective and may not advance at a sufficient pace, and we could be criticized for the accuracy, adequacy or completeness of the disclosure.
Removed
The merchandise purchased for our United States and Canadian Retail segment operations is managed by our distribution centers in Gap, Pennsylvania and Reno, Nevada, our fulfillment centers in Gap, Pennsylvania, Reno, Nevada and Indiana, Pennsylvania, and our Retail segment omni-channel fulfillment center in Kansas City, Missouri.
Added
Further, statements about our ESG-related initiatives and goals, and progress against these goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Removed
Merchandise purchased for our wholesale operations is managed by our fulfillment centers in Gap, Pennsylvania and Peterborough, England. The merchandise purchased for our Europe retail and digital operations is managed by our omni-channel fulfillment center in Peterborough, England.
Added
In addition, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions to these goals, by our customers and shareholders.
Removed
Merchandise purchased for our Nuuly Rent business is managed by our fulfillment center in Bristol, Pennsylvania and at a facility in Fairless Hills, Pennsylvania.
Added
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG-related goals on a timely basis, or at all, it could harm our reputation and the value of our brands, which could adversely affect our business, financial performance, growth and stock price.
Added
While it is uncertain whether the U.S. will enact legislation to adopt the minimum tax directive, several countries in which we operate have enacted tax legislation with proposals from the Pillar Two framework with an effective date beginning in fiscal 2025 and certain remaining impacts to be effective beginning in fiscal 2026.
Added
We have performed an initial assessment of the potential impact to income taxes as a result of Pillar Two based on the most recent tax filings, country-by-country reporting, and financial statements of affected subsidiaries. We continue to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two in the non-US tax jurisdictions in which we operate.
Added
Although we are unable to predict when and how additional changes will be enacted into law in countries in which we operate, it is possible that its implementation, including the global minimum corporate tax rate, may have an adverse impact on our effective tax rates. We are subject to numerous regulations and legal matters that could adversely affect our business.

Item 2. Properties

Properties — owned and leased real estate

10 edited+3 added−7 removed3 unchanged
Biggest changeWe lease a 214,500 square foot distribution center located in Reno, Nevada that receives and distributes the remaining half of our retail store merchandise in North America. The term of this lease is set to expire in June 2027, and we have the option to renew for up to an additional twenty years.
Biggest changeThe primarily Retail segment facilities that support our North America Retail segment operations are: • 1,000,000 square foot omni-channel fulfillment center we own in Gap, Pennsylvania; • 291,000 square foot distribution center we own in Gap, Pennsylvania; • 956,000 square foot fulfillment center we own in Indiana, Pennsylvania; • 880,000 square foot omni-channel fulfillment center we own in Kansas City, Kansas; • 463,000 square foot fulfillment center we own in Reno, Nevada; and • 214,500 square foot distribution center we lease in Reno, Nevada, which is set to expire in June 2027, and we have the option to renew for up to an additional twenty years.
The average store selling square feet is approximately 9,000 for Urban Outfitters, 8,000 for the Anthropologie Group and 2,000 for the Free People Group. Selling square feet can sometimes change due to factors such as floor moves, use of staircases and cash register configuration.
The average store selling square feet is approximately 9,000 for Urban Outfitters, 8,000 for Anthropologie and 2,000 for Free People (including 1,000 for FP Movement). Selling square feet can sometimes change due to factors such as floor moves, use of staircases and cash register configuration.
Wholesale Showrooms. In addition to the stores listed above, the Wholesale segment operates sales and showroom facilities in Dallas, New York City, Los Angeles, Chicago and London that are leased through 2023, 2023, 2024, 2028 and 2029, respectively.
Wholesale Showrooms. In addition to the stores listed above, the Wholesale segment operates sales and showroom facilities in Dallas, Los Angeles, London and New York City that are leased through 2024, 2026, 2029, and 2033, respectively.
Our retail locations are typically leased for a term of ten years with renewal options for an additional five to ten years. Total estimated selling square feet for 17 locations open, under lease as of January 31, 2023, by Urban Outfitters, the Anthropologie Group and the Free People Group was approximately 2,272,000, 1,812,000, and 392,000, respectively.
Our retail locations generally have initial lease terms of five to fifteen years with renewal options for an additional five to ten years. Total estimated selling square feet for locations open, under lease as of January 31, 2024, by Urban Outfitters, Anthropologie and Free People was approximately 2,263,000, 1,810,000, and 411,000, respectively.
The term of this lease is set to expire in July 2029, and we have the option to renew for up to an additional 10 years. Distribution .
The term of this lease is set to expire in July 2029, and we have the option to renew for up to an additional 10 years. Distribution . We operate multiple distribution and fulfillment centers worldwide to support our Retail, Wholesale and Nuuly segments in the United States, Europe and Canada.
We operate two fulfillment centers in the United States to conduct our Nuuly Rent operations. We lease a 309,000 square foot fulfillment center located in Bristol, Pennsylvania. The lease commenced in fiscal 2020 and is set to expire in July 2034 with options to renew for up to an additional ten years.
Nuuly Segment Nuuly Rent operations are primarily conducted from a 309,000 square foot fulfillment center we lease in Bristol, Pennsylvania, which is set to expire in July 2034 with options to renew for up to an additional ten years.
To support Retail segment customer demand until the omni-channel fulfillment center is operational, we signed a short-term lease in fiscal 2022 for an approximately 401,000 square foot fulfillment center located in Kansas City, Missouri. The term of this lease is set to expire in November 2023, and we have options to renew through fiscal 2027.
To support North America Retail segment customer demand until the omni-channel fulfillment center in Kansas City, Kansas was operational, we leased a 401,000 square foot fulfillment center located in Kansas City, Missouri. The lease commenced in fiscal 2022 and expired in fiscal 2024.
The following table shows the location of each of our existing retail locations, as of January 31, 2023: Urban Outfitters Anthropologie Group Free People Group Menus & Venues Total United States 183 207 174 11 575 Canada 18 10 3 — 31 Europe 62 21 11 — 94 Total Company-Owned Stores 263 238 188 11 700 Franchisee-Owned Stores (1) 6 2 — — 8 Total URBN 269 240 188 11 708 (1) Located in the Middle East.
The following table shows the location of each of our existing retail locations, as of January 31, 2024: Urban Outfitters Anthropologie Free People Menus & Venues Total United States 179 209 183 9 580 Canada 17 9 3 — 29 Europe 66 19 12 — 97 Total Company-Owned Stores 262 237 198 9 706 Franchisee-Owned Stores (1) 7 2 — — 9 Total URBN 269 239 198 9 715 (1) Located in the Middle East.
The 15-year lease will commence in fiscal 2024 and includes options to renew for up to an additional ten years. Improvements in recent years, as described in Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources, were necessary to adequately support our growth.
Improvements in recent years, as described in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources, were necessary to adequately support our growth. We believe that our centers are well maintained and in good operating condition. 18 Retail Locations. All of our retail locations are leased, well maintained and in good operating condition.
We began construction on the facility during fiscal 2020 and completed the installation of the remaining material handling equipment and became fully operational during fiscal 2022. Once fully operational, we exited our existing distribution and fulfillment centers in Rushden, England during fiscal 2022.
Our European Retail segment operations are supported by a 400,000 square foot omni-channel fulfillment center we own in Peterborough, England. The facility became fully operational during fiscal 2022, at which point we exited our existing distribution and fulfillment centers in Rushden, England.
Removed
We operate seven distribution and fulfillment centers worldwide to support our Retail and Wholesale segments in the United States, Europe and Canada, including the fulfillment of catalog, website and mobile application orders around the world. We own a 291,000 square foot distribution center in Gap, Pennsylvania that receives and distributes approximately half of our retail store merchandise in North America.
Added
Retail Segment Our Retail segment distribution and fulfillment centers receive and distribute our retail store merchandise and fulfill catalog, website and mobile application orders around the world.
Removed
We own and operate a 1,000,000 square foot fulfillment center in Gap, Pennsylvania, which performs Retail and Wholesale segment fulfillment services, including inventory warehousing, receiving and customer shipping. We own and operate a 463,000 square foot fulfillment center located in Reno, Nevada, which is primarily used to house and distribute merchandise to our western United States digital customers.
Added
Wholesale Segment Our Wholesale segment operations are predominantly supported by our omni-channel fulfillment center in Gap, Pennsylvania, with the remainder supported by our omni-channel fulfillment center in Peterborough, England.
Removed
We own and operate an approximately 956,000 square foot fulfillment center in Indiana, Pennsylvania, that primarily stores and distributes home products, home furnishings and electronics for the North American Retail segment. We own and operate an approximately 400,000 square foot omni-channel fulfillment center in Peterborough, England that supports our European Retail and Wholesale segments.
Added
In fiscal 2024 we entered into a lease for a 604,000 square foot fulfillment center located in Raymore, Missouri, which commenced operations in the first quarter of fiscal 2025. The lease is set to expire in fiscal 2039 and includes options to renew for up to an additional ten years.
Removed
In fiscal 2021, we purchased land in Kansas City, Kansas for the development of an approximately 880,000 square foot omni-channel fulfillment center. Construction of the facility began in fiscal 2021 and is expected to be fully operational during fiscal 2024.
Removed
The facility will support the growth and expansion of our Retail segment business in North America by providing more efficient and faster inventory processing, as well as faster and more consistent delivery times to our stores and digital customers.
Removed
We also lease a 227,000 square foot warehouse located in Fairless Hills, Pennsylvania. The lease commenced in fiscal 2023. We plan to open a 604,000 square foot fulfillment center located in Raymore, Missouri, which will be used to further support our Nuuly Rent operations.
Removed
For more information on our distribution center properties, see Item 1: Business—Company Operations— Distribution . We believe that our centers are well maintained and in good operating condition. Retail Locations. All of our retail locations are leased, well maintained and in good operating condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings We are party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows. Item 4. Mine Saf ety Disclosures Not applicable. 18 PART II
Biggest changeItem 3. Legal Proceedings We are party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows. Item 4. Mine Saf ety Disclosures Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed3 unchanged
Biggest changeBase Period Jan-18 INDEXED RETURNS Years Ended Company/Market/Peer Group Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Urban Outfitters, Inc. $ 100.00 $ 94.69 $ 75.05 $ 80.41 $ 84.19 $ 80.30 S&P 500 $ 100.00 $ 97.69 $ 118.87 $ 139.37 $ 171.83 $ 157.71 S&P 500 Apparel Retail $ 100.00 $ 108.99 $ 117.78 $ 129.08 $ 138.72 $ 152.98 Item 6.
Biggest changeBase Period Jan-19 INDEXED RETURNS Years Ended Company/Market/Peer Group Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Urban Outfitters, Inc. $ 100.00 $ 79.26 $ 84.92 $ 88.92 $ 84.80 $ 117.65 S&P 500 $ 100.00 $ 121.68 $ 142.67 $ 175.90 $ 161.44 $ 195.05 S&P 500 Apparel Retail $ 100.00 $ 108.07 $ 118.43 $ 127.28 $ 140.37 $ 170.28 20 Item 6.
Stock Performance The following graph and table compares the cumulative total shareholder return on our common shares with the cumulative total return on the Standard and Poor’s 500 Composite Stock Index and the Standard and Poor’s 500 Apparel Retail Index for the period beginning January 31, 2018 and ending January 31, 2023, assuming the reinvestment of any dividends and assuming an initial investment of $100 in each.
Stock Performance The following graph and table compares the cumulative total shareholder return on our common shares with the cumulative total return on the Standard and Poor’s 500 Composite Stock Index and the Standard and Poor’s 500 Apparel Retail Index for the period beginning January 31, 2019 and ending January 31, 2024, assuming the reinvestment of any dividends and assuming an initial investment of $100 in each.
Item 5. Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are traded on the NASDAQ Global Select Market under the symbol “URBN.” Holders of Record On March 27, 2023, there were 83 holders of record of our common shares.
Item 5. Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are traded on the NASDAQ Global Select Market under the symbol “URBN.” Holders of Record On March 25, 2024, there were 79 holders of record of our common shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

88 edited+18 added−44 removed54 unchanged
Biggest change(amounts in millions) Fiscal Year Ended January 31, 2023 2022 2021 Net sales $ 4,795.2 $ 4,548.8 $ 3,449.7 Cost of sales (excluding store impairment) 3,361.6 3,054.8 2,572.3 Store impairment (1) 6.4 — 15.5 Gross profit 1,427.2 1,494.0 861.9 Selling, general and administrative expenses 1,200.6 1,085.4 857.9 Income from operations 226.6 408.6 4.0 Interest income 2.0 2.3 3.1 Interest expense (1.3 ) (1.1 ) (3.4 ) Other expense (6.0 ) (5.2 ) (0.2 ) Income before income taxes 221.3 404.6 3.5 Income tax expense 61.6 94.0 2.3 Net income 159.7 310.6 1.2 AS A PERCENTAGE OF NET SALES Net sales 100.0 % 100.0 % 100.0 % Cost of sales (excluding store impairment) 70.1 67.2 74.6 Store impairment (1) 0.1 — 0.4 Gross profit 29.8 32.8 25.0 Selling, general and administrative expenses 25.1 23.8 24.9 Income from operations 4.7 9.0 0.1 Interest income 0.0 0.1 0.1 Interest expense (0.0) (0.0) (0.1 ) Other expense (0.1 ) (0.2 ) (0.0) Income before income taxes 4.6 8.9 0.1 Income tax expense 1.3 2.1 0.1 Net income 3.3 % 6.8 % 0.0 % Period over Period Change: Net sales 5.4 % 31.9 % (13.4 )% Gross profit (4.5 )% 73.3 % (30.5 )% Income from operations (44.5 )% n-m* (98.3 )% Net income (48.6 )% n-m* (99.3 )% (1) During fiscal 2023, we recorded store impairment charges for 19 retail locations, totaling $6.4 million.
Biggest change(amounts in millions) Fiscal Year Ended January 31, 2024 2023 2022 Net sales $ 5,153.2 $ 4,795.2 $ 4,548.8 Cost of sales (excluding store impairment and lease abandonment charges) 3,425.9 3,361.6 3,054.8 Store impairment and lease abandonment charges (1) 11.9 6.4 — Gross profit 1,715.4 1,427.2 1,494.0 Selling, general and administrative expenses 1,339.2 1,200.6 1,085.4 Asset impairment (2) 6.4 — — Income from operations 369.8 226.6 408.6 Interest income 23.6 2.0 2.3 Interest expense (7.7 ) (1.3 ) (1.1 ) Other expense (4.1 ) (6.0 ) (5.2 ) Income before income taxes 381.6 221.3 404.6 Income tax expense 93.9 61.6 94.0 Net income $ 287.7 $ 159.7 $ 310.6 AS A PERCENTAGE OF NET SALES Net sales 100.0 % 100.0 % 100.0 % Cost of sales (excluding store impairment and lease abandonment charges) 66.5 70.1 67.2 Store impairment and lease abandonment charges (1) 0.2 0.1 — Gross profit 33.3 29.8 32.8 Selling, general and administrative expenses 26.0 25.1 23.8 Asset impairment (2) 0.1 — — Income from operations 7.2 4.7 9.0 Interest income 0.5 0.0 0.1 Interest expense (0.2) (0.0) (0.0) Other expense (0.1) (0.1) (0.2) Income before income taxes 7.4 4.6 8.9 Income tax expense 1.8 1.3 2.1 Net income 5.6 % 3.3 % 6.8 % Period over Period Change: Net sales 7.5 % 5.4 % 31.9 % Gross profit 20.2 % (4.5 )% 73.3 % Income from operations 63.2 % (44.5 )% n-m* Net income 80.1 % (48.6 )% n-m* (1) During fiscal 2024, we recorded store impairment charges for 15 retail locations and lease abandonment charges for 2 retail locations, totaling $11.9 million.
The brand also has a wedding collection consisting of wedding dresses, bridesmaid dresses, party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories.
The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories.
Sales Return Reserve We record a reserve for estimated product returns where the sale has occurred during the period reported, but the return is likely to occur subsequent to the period reported. The reserve for estimated product returns is based on our most recent historical return trends.
Sales Return Reserve We record a sales return reserve for estimated product returns where the sale has occurred during the period reported, but the return is likely to occur subsequent to the period reported. The reserve for estimated product returns is based on our most recent historical return trends.
We record uncertain tax positions on the basis of a two-step process whereby (1) we determine whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the 25 more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
We record uncertain tax positions on the basis of a two-step process whereby (1) we determine whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
The $246 million increase was attributable to a $166.7 million, or 3.9%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $81.9 million, or 171.6%, partially offset by a $2.1 million, or 0.8%, decrease in Wholesale segment net sales.
The $246.5 million increase was attributable to a $166.7 million, or 3.9%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $81.9 million, or 171.6%, partially offset by a $2.1 million, or 0.8%, decrease in Wholesale segment net sales.
Revenue does not include taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. 23 Revenue is recognized net of estimated customer returns.
Revenue does not include taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. Revenue is recognized net of estimated customer returns.
If the actual return rate is materially different than our estimate, sales returns would be adjusted in the future. The costs of returns are recorded as a current asset rather than net with the sales return reserve liability.
If the actual return rate is materially different than our estimate, sales returns would be adjusted in the future. The costs of returns are recorded as a current asset rather than net with the sales return reserve.
Other Matters Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies —Recent Accounting Pronouncements ,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of recently adopted and issued accounting pronouncements. 31 Seasonality Our 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.
Other Matters Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies —Recent Accounting Pronouncements ,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of recently adopted and issued accounting pronouncements. 32 Seasonality Our business experiences seasonal fluctuations in net sales and net income, with a more significant portion of net sales typically realized in the second half of each year predominantly due to the year-end holiday period.
The Anthropologie Group operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers a catalog in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East.
Anthropologie operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers a catalog in North America 22 that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East.
Share-Based Compensation Accounting for share-based compensation requires measurement of compensation cost for all share-based awards at fair value on the date of grant and recognition of compensation over the service period. The fair value of the performance stock units and restricted stock units granted during fiscal 2023, 2022 and 2021 equaled the stock price on the date of the grant.
Share-Based Compensation Accounting for share-based compensation requires measurement of compensation cost for all share-based awards at fair value on the date of grant and recognition of compensation over the service period. The fair value of the performance stock units and restricted stock units granted during fiscal 2024, 2023 and 2022 equaled the stock price on the date of the grant.
We elect to account for forfeitures as they occur rather than estimate the expected forfeitures. 26 Results of Operations As a Percentage of Net Sales The tables below set forth, for the periods indicated, the results of operations and the percentage of our net sales represented by certain statement of operations data.
We elect to account for forfeitures as they occur rather than estimate the expected forfeitures. 27 Results of Operations As a Percentage of Net Sales The tables below set forth, for the periods indicated, the results of operations and the percentage of our net sales represented by certain statement of operations data.
(2) Menus & Venues restaurants and franchisee-owned stores are not included in selling square footage. We plan for future store growth for all three brands to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements.
(2) Menus & Venues restaurants and franchisee-owned stores are not included in selling square footage. We plan for future store growth for our brands to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements.
We monitor Retail segment metrics including customer traffic, conversion rates, average units per transaction at our stores and on our websites and mobile applications and average unit selling price at our stores and average order value on our websites and mobile applications.
We monitor Retail segment metrics including customer traffic, conversion rates, average units per transaction at our stores and on our websites and mobile applications. We also monitor average unit selling price and transactions at our stores and average order value on our websites and mobile applications.
Anthropologie Group stores are located in specialty centers, upscale street locations and enclosed malls.
Anthropologie stores are located in specialty centers, upscale street locations and enclosed malls.
The Free People Group 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, as well as substantially all of the Free People and FP Movement wholesale offerings.
Free People 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, as well as substantially all of the Free People and FP Movement wholesale offerings.
We anticipate our capital expenditures during fiscal 2024 to be approximately $230 million, primarily to support new and expanded fulfillment and distribution centers and new store openings. All fiscal 2024 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents.
We anticipate our capital expenditures during fiscal 2025 to be approximately $210 million, primarily to support new store openings and new and expanded fulfillment and distribution centers. All fiscal 2025 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents.
With those restrictions lifted in the current year, Retail segment comparable net sales increased due to high single-digit growth in retail store sales driven by higher traffic and transactions as well as an increase in average unit selling price, partially offset by a decrease in units per transaction and a decrease in conversion rate.
With those restrictions lifted in fiscal 2023, Retail segment comparable net sales increased due to high single-digit growth in retail store sales driven by higher traffic and transactions as well as an increase in average unit selling price, partially offset by a decrease in units per transaction and a decrease in conversion rate.
Our primary uses of cash have been to fund business operations, purchase inventory, expand our fulfillment centers, open new stores and repurchase our common shares. 29 Cash Flows from Operating Activities For all 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.
Our primary uses of cash have been to fund business operations, purchase inventory and rental product, expand and improve our fulfillment centers, open new stores and repurchase our common shares. 30 Cash Flows from Operating Activities For all 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 decrease in non-comparable net sales during fiscal 2023 was due to the negative impact of foreign currency translation, partially offset by the 89 new Company-owned stores and restaurants opened and 33 Company-owned stores and restaurants closed since the prior comparable period.
The decrease in 29 non-comparable net sales during fiscal 2023 was due to the negative impact of foreign currency translation, partially offset by the 56 net new Company-owned stores and restaurants opened since the prior comparable period.
We have 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.
We have elected the practical expedient to not separate non-lease components from lease components as it pertains to real estate leases. Store leases generally have initial lease terms that range from 5 to 15 years, some of which contain options to extend the lease for one or two 5-year periods.
Excluded from the above table are tax contingencies of $23,320 because we cannot reasonably estimate in which future periods these amounts will ultimately be settled. As a result, the $23,320 liability was classified as a non-current liability in the Company’s Consolidated Balance Sheets as of January 31, 2023.
Excluded from the above table are tax contingencies of $24,876 because we cannot reasonably estimate in which future periods these amounts will ultimately be settled. As a result, the $24,876 liability was classified as a non-current liability in the Company’s Consolidated Balance Sheets as of January 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment consists of our Anthropologie, Free People, FP Movement, Terrain, Urban Outfitters and Menus & Venues brands.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment includes our Anthropologie, Free People, FP Movement and Urban Outfitters brands.
Cash Flows from Financing Activities Cash used in financing activities in fiscal 2023, 2022 and 2021 was primarily related to $112.0 million, $55.8 million and $7.0 million, respectively, of repurchases of our common shares under our share repurchase programs during each of those years.
Cash used in financing activities in 2023 and 2022 was primarily related to $112.0 million and $55.8 million, respectively, of repurchases of our common shares under our share repurchase programs during each of those years.
Revenue is recognized from breakage over time in proportion to gift card redemptions. Judgment is used in determining the amount of breakage revenue to be recognized and is based on historical gift card redemption patterns. Gift card breakage revenue is included in net sales and is not material. Our gift cards do not expire.
Judgment is used in determining the amount of breakage revenue to be recognized and is based on historical gift card redemption patterns. Gift card breakage revenue is included in net sales and is not material. Our gift cards do not expire.
As of January 31, 2023 and 2022, reserves for estimated sales returns totaled $70.1 million and $69.8 million, representing 3.7% and 3.4% of total liabilities, respectively. Inventory We value our inventory, which consists primarily of general consumer merchandise held for sale, at the lower of cost or net realizable value.
As of January 31, 2024 and 2023, reserves for estimated sales returns totaled $80.5 million and $70.1 million, representing 4.0% and 3.7% of total liabilities, respectively. Inventory We value our inventory, which consists primarily of general consumer merchandise held for sale, at the lower of cost or net realizable value.
Merchandise at the Anthropologie brand is tailored to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party brand product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness.
The Anthropologie brand tailors its merchandise to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party branded product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness.
The decrease in Wholesale segment net sales in fiscal 2023 as compared to fiscal 2022 was primarily due to a $3.0 million, or 1.3%, decrease in sales for the Free People Group, which was primarily driven by an decrease in sales to department stores, partially offset by an increase in sales to specialty accounts.
The decrease in Wholesale segment net sales in fiscal 2023 as compared to fiscal 2022 was primarily due to a $3.0 million, or 1.3%, decrease in Free People wholesale sales, which was primarily driven by a decrease in sales to department stores, partially offset by an increase in sales to specialty accounts. Urban Outfitters wholesale sales increased by $0.9 million.
Cash paid for property and equipment for fiscal 2023, 2022 and 2021 was $199.5 million, $262.4 million and $159.2 million, respectively, which was primarily used to expand our fulfillment center network in all fiscal years.
Cash paid for property and equipment for fiscal 2024, 2023 and 2022 was $199.6 million, $199.5 million and $262.4 million, respectively, which was primarily used to expand our fulfillment center network in all fiscal years.
Net deferred tax assets as of January 31, 2023 and January 31, 2022 totaled $70.9 million and $69.9 million, respectively, representing 1.9% and 1.8% of total assets, respectively. To the extent we believe that recovery of a deferred tax asset is at risk, we establish valuation allowances.
Net deferred tax assets as of January 31, 2024 and January 31, 2023 totaled $46.2 million and $70.9 million, respectively, representing 1.1% and 1.9% of total assets, respectively. To the extent we believe that recovery of a deferred tax asset is at risk, we establish valuation allowances.
Rental product as of January 31, 2023 and January 31, 2022 totaled $90.9 million and $32.1 million, representing 2.5% and less than 1.0% of total assets, respectively. 24 Impairment of Long-lived Assets We review the carrying values of our definite-lived, long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Rental product as of January 31, 2024 and January 31, 2023 totaled $163.1 million and $90.9 million, representing 4.0% and 2.5% of total assets, respectively. Impairment of Long-lived Assets We review the carrying values of our definite-lived, long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Our Nuuly segment net sales accounted for approximately 2.7%, 1.1%, and less than 1.0% of consolidated net sales for fiscal 2023, 2022 and 2021, respectively. Critical Accounting Policies and Estimates Our Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States.
Our Nuuly segment net sales accounted for approximately 4.6%, 2.7%, and 1.1% of consolidated net sales for fiscal 2024, 2023 and 2022, respectively. Critical Accounting Policies and Estimates Our Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States.
We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales. During fiscal 2024, we plan to continue our investment in these initiatives for all brands.
We may also repurchase our 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. During fiscal 2025, we plan to continue our investment in these initiatives for all brands.
We make assumptions as to the number of times each unit can be rented. If the actual number of times a unit can be rented were to vary significantly from our estimates, it could materially affect the amount of rental product amortization included in cost of sales.
Lost, damaged and retired rental product is also charged to cost of sales. We make assumptions as to the number of times each unit can be rented. If the actual number of times a unit can be rented were to vary significantly from our estimates, it could materially affect the amount of rental product amortization included in cost of sales.
For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party market brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month.
For a monthly fee, Nuuly subscribers can rent product from a wide selection of the Company’s own brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase the rented product.
To the extent we establish valuation allowances or increase the allowances in a period, we record additional income tax expense in the Consolidated Statements of Income. Valuation allowances were $33.1 million as of January 31, 2023 and $30.9 million as of January 31, 2022.
To the extent we establish valuation allowances or increase the allowances in a period, we record additional income tax expense in the Consolidated Statements of Income. Valuation allowances were $32.0 million as of January 31, 2024 and $33.1 million as of January 31, 2023.
Wholesale Segment Our Wholesale segment consists of the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment.
Wholesale Segment Our Wholesale segment includes the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our Retail segment.
Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, catalogs and customer contact centers and franchisee-owned stores. The Wholesale segment consists of our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment.
Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs, customer contact centers and franchisee-owned stores. Our Wholesale segment includes our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment.
These tables should be read in conjunction with the discussion that follows: (amounts in millions) January 31, 2023 2022 2021 Cash, cash equivalents and marketable securities $ 485.5 $ 669.6 $ 694.0 Working capital 347.3 304.3 317.2 Fiscal Year Ended January 31, 2023 2022 2021 Net cash provided by operating activities $ 142.7 $ 359.3 $ 285.8 Net cash used in investing activities (32.0 ) (487.7 ) (101.9 ) Net cash used in financing activities (118.4 ) (60.3 ) (10.4 ) The increase in working capital at January 31, 2023, as compared to January 31, 2022, was primarily due to the timing of disbursements, partially offset by the net decrease in cash, cash equivalents and current marketable securities.
These tables should be read in conjunction with the discussion that follows: (amounts in millions) January 31, 2024 2023 2022 Cash, cash equivalents and marketable securities $ 779.2 $ 485.5 $ 669.6 Working capital 288.3 347.3 304.3 Fiscal Year Ended January 31, 2024 2023 2022 Net cash provided by operating activities $ 509.4 $ 142.7 $ 359.3 Net cash used in investing activities (521.6 ) (32.0 ) (487.7 ) Net cash used in financing activities (12.1 ) (118.4 ) (60.3 ) The decrease in working capital at January 31, 2024, as compared to January 31, 2023, and January 31, 2022, was primarily due to the timing of disbursements and the decrease in inventory, partially offset by the net increase in cash, cash equivalents and current marketable securities.
In the future, if enough evidence of our ability to generate sufficient future taxable income in these jurisdictions becomes apparent, we would be required to reduce our valuation allowances, resulting in a reduction in “Income tax expense” in the Consolidated Statements of Income.
Valuation allowances are based on evidence of our ability to generate sufficient taxable income in certain foreign and state jurisdictions. 26 In the future, if enough evidence of our ability to generate sufficient future taxable income in these jurisdictions becomes apparent, we would be required to reduce our valuation allowances, resulting in a reduction in “Income tax expense” in the Consolidated Statements of Income.
The Free People Group consists of the Free People and FP Movement brands. The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, FP Movement activewear, shoes, accessories, home products, gifts and beauty and wellness.
The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials.
Net sales from the Wholesale segment accounted for approximately 5.2%, 5.5% and 5.7% of total consolidated net sales for fiscal 2023, 2022 and 2021, respectively. Nuuly Segment Our Nuuly segment consists of the Nuuly brand, which includes Nuuly Rent and Nuuly Thrift. Nuuly Rent is a monthly women’s apparel subscription rental service.
Net sales from the Wholesale segment accounted for approximately 4.6%, 5.2% and 5.5% of total consolidated net sales for fiscal 2024, 2023 and 2022, respectively. Nuuly Segment Our Nuuly segment includes the Nuuly brand, which is a monthly women’s apparel subscription rental service.
Cash Flows from Investing Activities Cash used in investing activities in fiscal 2023 primarily related to the purchases of property and equipment and marketable securities, partially offset by the sales and maturities of marketable securities.
Cash Flows from Investing Activities For all periods, cash used in investing activities was primarily related to the purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities.
Commercial Commitments The following table summarizes our commercial commitments as of January 31, 2023: Amount of Commitment Per Period (in thousands) Description Total Amounts Committed Less Than One Year More Than One Year Trade letters of credit (1) $ 75,665 $ 75,665 $ — Stand-by letters of credit (2) 12,433 12,433 — Total commercial commitments $ 88,098 $ 88,098 $ — (1) Consists primarily of outstanding letter of credit commitments in connection with import inventory purchases.
Commercial Commitments The following table summarizes our commercial commitments as of January 31, 2024: Amount of Commitment Per Period (in thousands) Description Total Amounts Committed Less Than One Year More Than One Year Trade letters of credit (1) $ 61,805 $ 61,805 $ — Stand-by letters of credit (2) 13,566 13,566 — Total commercial commitments $ 75,371 $ 75,371 $ — (1) Consists primarily of outstanding letter of credit commitments in connection with import inventory purchases.
During fiscal 2023, we recorded impairment charges for 19 retail locations, totaling $6.4 million, with a carrying value after impairment of $49.0 million primarily related to the right-of-use assets. During fiscal 2021, we recorded impairment charges for 42 retail locations, totaling $15.5 million, with a carrying value after impairment of $101.8 million primarily related to the right-of-use assets.
During fiscal 2024, we recorded impairment charges for 15 retail locations, totaling $3.6 million, with a carrying value after impairment of $41.0 million related to the right-of-use assets. During fiscal 2023, we recorded impairment charges for 19 retail locations, totaling $6.4 million, with a carrying value after impairment of $49.0 million related to the right-of-use assets.
Capital and Operating Expenditures During fiscal 2024, we plan to complete construction on a new omni-channel fulfillment center in Kansas City, Kansas, open approximately 35 new Company-owned retail locations, expand or relocate certain existing retail locations, increase capacity at our Bristol, Pennsylvania Nuuly fulfillment center and invest in a new Nuuly fulfillment center in Raymore, Missouri in response to the growth in Nuuly subscribers, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales, upgrade our systems, improve and expand our digital capabilities, invest in omni-channel marketing when appropriate and repurchase common shares.
Capital and Operating Expenditures During fiscal 2025, we plan to open approximately 58 new Company-owned retail locations, expand or relocate certain existing retail locations, complete construction on an additional Nuuly fulfillment center in Raymore, Missouri in response to the growth in the number of Nuuly subscribers, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales, upgrade our systems, improve and expand our digital capabilities and invest in omni-channel marketing when appropriate.
Rental Product The cost of our Nuuly segment rental product is amortized to cost of sales based on the cost of each unit rented, which is estimated based on the number of times the unit is expected to be rented and the cost of the rental product. Lost, damaged and retired rental product is also charged to cost of sales.
Rental Product The cost of our Nuuly segment rental product is amortized to cost of sales over the subscription period based on the cost of each unit rented, which is estimated based on the number of times the unit is expected to be rented and the cost of the rental product.
Refer to Note 10, "Income Taxes," in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
(4) Refer to Note 10, "Income Taxes," in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K. (5) Refer to Note 15, “Commitments and Contingencies,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
The Free People Group also offers catalogs that market select merchandise, most of which is also available in our Free People and FP Movement stores. The Free People Group’s North American Retail segment net sales accounted for approximately 17.5% of consolidated net sales for fiscal 2023, compared to approximately 16.3% for fiscal 2022.
Free People also offers catalogs that market select merchandise, most of which is also available in our Free People stores. Free People's North American Retail segment net sales accounted for approximately 20.1% of consolidated net sales for fiscal 2024, compared to approximately 17.5% for fiscal 2023.
The relative proportion of Retail segment sales attributable to store and 27 digital channels changed in large part due to the temporary global store closures and occupancy restrictions during the prior year due to the COVID-19 pandemic.
Retail segment comparable net sales increased in North America and Europe. The relative proportion of Retail segment sales attributable to store and digital channels changed in large part due to the temporary global store closures and occupancy restrictions during fiscal 2022 due to the COVID-19 pandemic.
Additionally, during fiscal 2023, the Company recorded a $6.4 million store impairment charge. Total inventory at January 31, 2023 increased by $17.8 million, or 3.1%, to $587.5 million from $569.7 million at January 31, 2022. Total Retail segment inventory increased by 4.4% and Wholesale segment inventory decreased by 7.3%.
Total inventory at January 31, 2023 increased by $17.8 million, or 3.1%, to $587.5 million from $569.7 million at January 31, 2022. Total Retail segment inventory increased by 4.4% and Wholesale segment inventory decreased by 7.3%.
The increase in our Retail segment net sales during fiscal 2023 was due to an increase of $171.4 million, or 4.2%, in Retail segment comparable net sales, partially offset by a decrease of $4.7 million in non-comparable net sales.
The increase in our Retail segment net sales during fiscal 2023 was due to an increase of $171.4 million, or 4.2%, in Retail segment comparable net sales, partially offset by a decrease of $4.7 million in non-comparable net sales. Retail segment comparable net sales increased 11.5% at Free People and 11.3% at Anthropologie and decreased 7.1% at Urban Outfitters.
The Wholesale segment primarily designs, develops and markets apparel, intimates and activewear. Our Nuuly segment consists of the Nuuly brand, which offers customers with a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service.
Our Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Nuuly segment includes the Nuuly brand, which offers customers a more sustainable way to explore fashion through a monthly women’s apparel subscription rental service. Our fiscal year ends on January 31.
Retail segment return policies vary by brand, but generally provide for no time limit on returns and the refund to be issued in either the form of original payment or as a gift card. Payment for merchandise is tendered primarily by cash, check, credit card, debit card, gift card or alternative payment methods.
Retail segment return policies vary by brand, but generally provide for no time limit on returns and the refund to be issued in either the form of original payment or as a gift card. Uncollectible accounts receivable in the Retail and Nuuly segments primarily results from unauthorized credit card transactions.
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 and the BDG and other own brand apparel collections under the Urban Outfitters brand. The Anthropologie brand exited the wholesale business in the third quarter of fiscal 2021.
The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People and FP Movement brands and the BDG and “iets frans” apparel collections under the Urban Outfitters brand.
Revenue Recognition Merchandise: Merchandise is sold through retail stores, catalogs and the digital sales channel, as well as to wholesale customers, franchise partners and Nuuly customers. Revenue is recognized when control of the promised goods is transferred to the customer. We have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.
Revenue is recognized when control of the promised goods is transferred to the customer. We have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.
The Anthropologie Group’s North American Retail segment net sales accounted for approximately 39.6% of consolidated net sales for fiscal 2023, compared to 37.4% for fiscal 2022. European Retail segment net sales accounted for approximately 1.8% of consolidated net sales for fiscal 2023, compared to approximately 2.0% for fiscal 2022.
Anthropologie's North American Retail segment net sales accounted for approximately 41.7% of consolidated net sales for fiscal 2024, compared to 39.6% for fiscal 2023. European Retail segment net sales accounted for approximately 1.6% of consolidated net sales for fiscal 2024, compared to approximately 1.8% for fiscal 2023.
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 20 channels.
All available Company-owned Retail segment shopping channels are fully integrated, including retail locations, websites, mobile applications, catalogs and customer contact centers. Our investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the Retail segment omni-channel and not the separate store or digital channels.
Fiscal 2022 Compared to Fiscal 2021 Net sales in fiscal 2022 increased by 31.9% to $4.55 billion, from $3.45 billion in fiscal 2021.
Fiscal 2023 Compared to Fiscal 2022 Net sales in fiscal 2023 increased by 5.4% to $4.80 billion, from $4.55 billion in fiscal 2022.
Gross profit decreased to $1.43 billion for fiscal 2023 from $1.49 billion in fiscal 2022. The decrease in gross profit rate and dollars was primarily due to higher markdowns by the Urban Outfitters and Free People Group brands in the Retail segment as compared to record low markdown rates in the prior year.
The decrease in gross profit rate and dollars was primarily due to higher markdowns by the Urban Outfitters and Free People brands in the Retail segment as compared to record low markdown rates in the prior year. Additionally, during fiscal 2023, the Company recorded a $6.4 million store impairment charge.
Positive comparable store net sales in fiscal 2022 resulted from an increase in store traffic, transactions and average unit retail price, while units per transaction and conversion rate declined. The digital channel net sales increase was driven by an increase in average order value, while sessions and units per transaction decreased and conversion rate was flat.
The digital channel net sales increase was driven by increases in sessions and average order value, while conversion rate and units per transaction decreased. Comparable store net sales increased as a result of higher store traffic, average unit retail price and an increase in transactions, which were partially offset by decreases in conversion rate and units per transaction.
At the time of issuance, we have an open performance obligation for the future delivery of promised goods or services. The liability remains outstanding until the card is redeemed by the customer, at which time we recognize revenue. Over time, a portion of the outstanding gift cards will not be redeemed by the customer which we refer to as “breakage”.
The liability remains outstanding until the card is redeemed by the customer, at which time we recognize revenue. Over time, a portion of the outstanding gift cards will not be redeemed by the customer which we refer to as “breakage”. Revenue is recognized from breakage over time in proportion to gift card redemptions.
Selling square footage by brand as of January 31, 2023 and January 31, 2022 was as follows: January 31, 2023 January 31, 2022 Change Selling square footage (in thousands): Urban Outfitters 2,272 2,264 0.4 % Anthropologie Group 1,812 1,813 (0.1 )% Free People Group (1) 392 367 6.8 % Total URBN (2) 4,476 4,444 0.7 % (1) Selling square footage for FP Movement was 40 and 25 as of January 31, 2023 and 2022, respectively.
(3) Franchisee-owned stores are located in the Middle East. 23 Selling square footage by brand as of January 31, 2024 and January 31, 2023 was as follows: January 31, 2024 January 31, 2023 Change Selling square footage (in thousands): Urban Outfitters 2,263 2,272 (0.4 )% Anthropologie 1,810 1,812 (0.1 )% Free People (1) 411 392 4.8 % Total URBN (2) 4,484 4,476 0.2 % (1) Selling square footage for FP Movement was 48 and 40 as of January 31, 2024 and 2023, respectively.
Uncollectible accounts receivable in the Retail and Nuuly segments primarily results from unauthorized credit card transactions. We maintain an allowance for doubtful accounts for our Wholesale segment accounts receivable, which we review on a regular basis and believe is sufficient to cover potential credit losses and billing adjustments.
We maintain an allowance for doubtful accounts for our Wholesale segment accounts receivable, which we review on a regular basis and believe is sufficient to cover potential credit losses and billing adjustments. Payment terms in our Wholesale segment vary by customer. Subscription Fees: Revenue for Nuuly Rent is primarily generated through monthly subscription fees.
Urban Outfitters’ North American Retail segment net sales accounted for approximately 23.0% of consolidated net sales for fiscal 2023, compared to 27.5% for fiscal 2022. European Retail segment net sales accounted for approximately 8.9% of consolidated net sales for fiscal 2023, compared to approximately 9.1% for fiscal 2022. The Anthropologie Group consists of the Anthropologie and Terrain brands.
Urban Outfitters’ North American Retail segment net sales accounted for approximately 17.7% of consolidated net sales for fiscal 2024, compared to 23.0% for fiscal 2023. European Retail segment net sales accounted for approximately 8.2% of consolidated net sales for fiscal 2024, compared to approximately 8.9% for fiscal 2023.
During the last three years, we have satisfied our cash requirements primarily through our cash flow from operating activities, and additionally, during fiscal 2023, through the sales and maturities of marketable securities. Additionally, during fiscal 2021, in response to the COVID-19 pandemic, we had borrowings of $220.0 million under our Amended Credit Facility to protect our cash reserves.
During the last three years, we have satisfied our cash requirements primarily through our cash flow from operating activities, and additionally, during fiscal 2023, through the sales and maturities of marketable securities.
See Note 10, “Income Taxes,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K, for a reconciliation of the statutory U.S. federal income tax rate to our effective tax rate. Liquidity and Capital Resources The following tables set forth certain balance sheet and cash flow data for the periods indicated.
Our effective tax rate for fiscal 2024 was 24.6% compared to 27.8% in fiscal 2023. See Note 10, “Income Taxes,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K, for a reconciliation of the statutory U.S. federal income tax rate to our effective tax rate.
The increase in Retail segment comparable net sales for fiscal 2022 was driven by high double-digit growth in retail store sales and high single-digit growth in digital channel sales.
Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by mid single-digit positive growth in both digital channel sales and retail store sales.
Share Repurchases See Note 12, “Shareholders’ Equity,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for certain financial information regarding the Company’s share repurchases. 30 Contractual Obligations The following table summarizes our contractual obligations as of January 31, 2023: Payments Due by Period (in thousands) Description Total Obligations Less Than One Year More Than One Year Operating leases (1) $ 1,361,892 $ 292,057 $ 1,069,835 Purchase commitments (2) 780,098 730,658 49,440 Tax payable (3) 21,323 5,331 15,992 Construction contracts (4) 121,212 121,212 — Total contractual obligations $ 2,284,525 $ 1,149,258 $ 1,135,267 (1) Refer to Note 9, “Leases,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Share Repurchases See Note 12, “Shareholders’ Equity,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for certain financial information regarding the Company’s share repurchases. 31 Contractual Obligations The following table summarizes our contractual obligations as of January 31, 2024: Payments Due by Period (in thousands) Description Total Obligations Less Than One Year More Than One Year Operating leases (1) $ 1,319,392 $ 284,199 $ 1,035,193 Purchase commitments (2) 782,926 753,436 29,490 Tax payable (3) 15,993 7,108 8,885 Tax credit investment (4) 69,490 15,418 54,072 Construction contracts (5) 18,488 18,488 — Total contractual obligations $ 2,206,289 $ 1,078,649 $ 1,127,640 (1) Refer to Note 9, “Leases,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Net sales from the Retail segment accounted for approximately 92.1%, 93.4% and 93.6% of total consolidated net sales for fiscal 2023, 2022 and 2021, respectively. 21 Store data for fiscal 2023 was as follows: January 31, 2022 Stores Opened Stores Closed January 31, 2023 Urban Outfitters United States 184 4 (5 ) 183 Canada 18 — — 18 Europe 59 3 — 62 Urban Outfitters Global Total 261 7 (5 ) 263 Anthropologie Group United States 206 5 (4 ) 207 Canada 11 — (1 ) 10 Europe 21 1 (1 ) 21 Anthropologie Group Global Total 238 6 (6 ) 238 Free People Group United States (1) 162 14 (2 ) 174 Canada 5 — (2 ) 3 Europe 6 5 — 11 Free People Group Global Total 173 19 (4 ) 188 Menus & Venues United States 10 1 — 11 Menus & Venues Total 10 1 — 11 Total Company-Owned Stores 682 33 (15 ) 700 Franchisee-Owned Stores (2) 3 5 — 8 Total URBN 685 38 (15 ) 708 (1) Eleven FP Movement stores were opened during the year ended January 31, 2023.
Store data for fiscal 2024 was as follows: January 31, 2023 Stores Opened Stores Closed January 31, 2024 Urban Outfitters United States 183 1 (5 ) 179 Canada 18 1 (2 ) 17 Europe 62 5 (1 ) 66 Urban Outfitters Global Total 263 7 (8 ) 262 Anthropologie United States 207 7 (5 ) 209 Canada 10 — (1 ) 9 Europe 21 — (2 ) 19 Anthropologie Global Total 238 7 (8 ) 237 Free People United States (1) 174 10 (1 ) 183 Canada 3 — — 3 Europe 11 1 — 12 Free People Global Total 188 11 (1 ) 198 Menus & Venues (2) United States 11 1 (3 ) 9 Menus & Venues Total 11 1 (3 ) 9 Total Company-Owned Stores 700 26 (20 ) 706 Franchisee-Owned Stores (3) 8 1 — 9 Total URBN 708 27 (20 ) 715 (1) Seven FP Movement stores were opened during the year ended January 31, 2024.
Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
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 significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
The $1.10 billion increase was attributable to a $1.02 billion, or 31.6%, increase in Retail segment net sales, a $55.1 million, or 28.0%, increase in Wholesale segment net sales and an increase in Nuuly segment net sales of $23.4 million.
The $358.0 million increase was attributable to a $263.4 million, or 6.0%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $106.2 million, or 81.9%, partially offset by a $11.6 million, or 4.6%, decrease in Wholesale segment net sales.
The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People Group stores are located in enclosed malls, upscale street locations and specialty centers.
Free People stores are located in enclosed malls, upscale street locations and specialty centers.
If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates.
If actual results were to differ significantly from estimates made, the reported results could be materially affected.
The Menus & Venues brand net sales accounted for less than 1.0% of consolidated net sales for fiscal 2023 and fiscal 2022.
European Retail segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2024 and fiscal 2023. Net sales from the Retail segment accounted for approximately 90.8%, 92.1% and 93.4% of total consolidated net sales for fiscal 2024, 2023 and 2022, respectively.
Rental product is included in "Deferred income taxes and other assets" in the Consolidated Balance Sheets.
Rental product is included in "Deferred income taxes and other assets" 25 in the Consolidated Balance Sheets. Purchases of rental product were $150.7 million, $103.3 million, and $37.3 million for fiscal 2024, 2023 and 2022, respectively.
We expect the amount of our provision and related inventory to increase over time as we increase our sales. The majority of inventory at January 31, 2023 and 2022 consisted of finished goods. Raw materials and work-in-process were not material to the overall inventory value.
The majority of inventory at January 31, 2024 and 2023 consisted of finished goods. Raw materials and work-in-process were not material to the overall inventory value. Inventory as of January 31, 2024 and 2023 totaled $550.2 million and $587.5 million, representing 13.4% and 16.0% of total assets, respectively.
The increase in non-comparable net sales during fiscal 2022 was primarily due to net new store openings and a recovery from the negative impact of the COVID-19 pandemic in fiscal 2021, which resulted in reduced store traffic and lower store productivity in the 76 new Company-owned stores opened and 28 Company-owned stores and restaurants closed since the prior comparable period.
The increase in non-comparable net sales during fiscal 2024 was due to the impact of the 24 net new Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.
The increase in cash flows from operations for fiscal 2022 compared to fiscal 2021 was primarily due to increased net income, partially offset by the net increase in inventory less accounts payable to support the continued growth of the Company’s operations.
The increase in cash flows from operations for fiscal 2024 compared to fiscal 2023 was primarily due to higher net income, the timing of disbursements and lower inventory purchases in fiscal 2024.
A customer may pause the monthly subscription, at which point the customer will not be billed for future months until the subscription is no longer on hold. Gift Cards: We account for a gift card transaction by recording a liability at the time the gift card is issued to the customer in exchange for consideration from the customer.
Gift Cards: We account for a gift card transaction by recording a liability at the time the gift card is issued to the customer in exchange for consideration from the customer. At the time of issuance, we have an open performance obligation for the future delivery of promised goods or services.
During fiscal 2021, we recorded store impairment charges for 42 retail locations, totaling $15.5 million. * Not meaningful. Fiscal 2023 Compared to Fiscal 2022 Net sales in fiscal 2023 increased by 5.4% to $4.80 billion, from $4.55 billion in fiscal 2022.
Fiscal 2024 Compared to Fiscal 2023 Net sales in fiscal 2024 increased by 7.5% to $5.15 billion, from $4.80 billion in fiscal 2023.

… 70 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed9 unchanged
Biggest changeAs of January 31, 2023 and 2022, our cash, cash equivalents and marketable securities consisted primarily of cash on hand and in banks, money market accounts, municipal and pre-refunded municipal bonds rated “BBB” or better, corporate bonds rated “BBB” or better, certificates of deposit and mutual funds.
Biggest changeAs of January 31, 2024 and 2023, our cash, cash equivalents and marketable securities consisted primarily of cash on hand and in banks, money market accounts, municipal and pre-refunded municipal bonds rated “BBB” or better, corporate bonds rated “BBB” or better, certificates of deposit and mutual funds.
We are exposed to market risks relating to changes in interest rates on outstanding borrowings under our Credit Facility because these borrowings bear interest at variable rates. A 100 basis point change in our applicable interest rate would not have a material impact to interest expense for the year ended January 31, 2023. Item 8.
We are exposed to market risks relating to changes in interest rates on outstanding borrowings under our Credit Facility because these borrowings bear interest at variable rates. A 100 basis point change in our applicable interest rate would not have a material impact to interest expense for the year ended January 31, 2024. Item 8.

Other URBN 10-K year-over-year comparisons