URBAN OUTFITTERS INC [URBN] Filings

10-Q 1 urbn-20230731.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the Quarterly Period Ended July 31, 2023

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

For the transition period from to

Commission File No. 000-22754

Urban Outfitters, Inc.

(Exact Name of Registrant as Specified in Its Charter)


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

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

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

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


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

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

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

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


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

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

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

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

Common shares, $0.0001 par value—92,774,395 shares outstanding on September 5, 2023.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION


Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of July 31, 2023, January 31, 2023 and July 31, 2022	1

	Condensed Consolidated Statements of Income for the three and six months ended July 31, 2023 and 2022	2

	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 31, 2023 and 2022	3

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

	Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2023 and 2022	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29

Item 4.	Controls and Procedures	30

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

	Signatures	33

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(unaudited)


	July 31,			January 31,			July 31,
	2023			2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	224,744		$	201,260		$	91,665
Marketable securities		250,832			181,378			160,020
Accounts receivable, net of allowance for doubtful accounts of $1,481, $1,496 and $1,201, respectively		79,118			70,339			97,374
Inventory		586,514			587,510			697,474
Prepaid expenses and other current assets		224,254			197,232			220,901
Total current assets		1,365,462			1,237,719			1,267,434
Property and equipment, net		1,222,343			1,187,735			1,150,247
Operating lease right-of-use assets		961,458			959,436			927,685
Marketable securities		122,356			102,844			152,528
Deferred income taxes and other assets		298,317			195,178			155,538
Total Assets	$	3,969,936		$	3,682,912		$	3,653,432
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	270,464		$	257,620		$	347,805
Current portion of operating lease liabilities		227,669			232,672			222,430
Accrued expenses, accrued compensation and other current liabilities		459,343			400,082			396,650
Total current liabilities		957,476			890,374			966,885
Non-current portion of operating lease liabilities		882,841			884,696			868,686
Deferred rent and other liabilities		162,228			115,159			110,669
Total Liabilities		2,002,545			1,890,229			1,946,240
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 92,773,249, 92,180,709 and 92,173,342 shares issued and outstanding, respectively		9			9			9
Additional paid-in-capital		23,214			15,248			—
Retained earnings		1,982,970			1,826,061			1,757,368
Accumulated other comprehensive loss		(38,802	)		(48,635	)		(50,185	)
Total Shareholders’ Equity		1,967,391			1,792,683			1,707,192
Total Liabilities and Shareholders’ Equity	$	3,969,936		$	3,682,912		$	3,653,432

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

(unaudited)


	Three Months Ended					Six Months Ended
	July 31,					July 31,
	2023		2022			2023		2022
Net sales	$	1,272,195	$	1,183,388		$	2,385,869	$	2,235,322
Cost of sales		816,614		808,836			1,559,057		1,537,469
Gross profit		455,581		374,552			826,812		697,853
Selling, general and administrative expenses		323,483		288,734			623,331		565,798
Income from operations		132,098		85,818			203,481		132,055
Other income (loss), net		3,399		(2,262	)		4,418		(4,251	)
Income before income taxes		135,497		83,556			207,899		127,804
Income tax expense		31,405		24,083			50,990		36,798
Net income	$	104,092	$	59,473		$	156,909	$	91,006
Net income per common share:
Basic	$	1.12	$	0.64		$	1.69	$	0.97
Diluted	$	1.10	$	0.64		$	1.67	$	0.96
Weighted-average common shares outstanding:
Basic		92,741,888		93,041,310			92,610,499		94,240,412
Diluted		94,228,185		93,648,214			94,026,950		94,977,505

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands)

(unaudited)


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

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(amounts in thousands, except share data)

(unaudited)


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


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

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(amounts in thousands, except share data)

(unaudited)


											Accumulated
	Common Shares					Additional					Other
	Number of			Par		Paid-in			Retained		Comprehensive
	Shares			Value		Capital			Earnings		Loss			Total
Balances as of January 31, 2023		92,180,709		$	9	$	15,248		$	1,826,061	$	(48,635	)	$	1,792,683
Comprehensive income		—			—		—			156,909		9,833			166,742
Share-based compensation		—			—		15,556			—		—			15,556
Share-based awards		896,119			—		594			—		—			594
Share repurchases		(303,579	)		—		(8,184	)		—		—			(8,184	)
Balances as of July 31, 2023		92,773,249		$	9	$	23,214		$	1,982,970	$	(38,802	)	$	1,967,391


													Accumulated
	Common Shares						Additional						Other
	Number of			Par			Paid-in			Retained			Comprehensive
	Shares			Value			Capital			Earnings			Loss			Total
Balances as of January 31, 2022		96,431,044		$	10		$	—		$	1,770,560		$	(24,830	)	$	1,745,740
Comprehensive income		—			—			—			91,006			(25,355	)		65,651
Share-based compensation		—			—			14,109			—			—			14,109
Share-based awards		724,215			—			376			—			—			376
Share repurchases		(4,981,917	)		(1	)		(14,485	)		(104,198	)		—			(118,684	)
Balances as of July 31, 2022		92,173,342		$	9		$	—		$	1,757,368		$	(50,185	)	$	1,707,192

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

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Six Months Ended
	July 31,
	2023		2022
Cash flows from operating activities:
Net income	$	156,909

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10-Q	[2022-06-09]
10-K	[2022-04-01]
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10-Q	[2021-06-09]
10-K	[2021-04-01]
10-Q	[2020-12-10]
10-Q	[2020-09-09]
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10-K	[2020-03-31]
10-Q	[2019-12-10]
10-Q	[2019-09-09]
10-Q	[2019-06-10]
10-K	[2019-04-01]
10-Q	[2018-12-10]
10-Q	[2018-09-10]
10-Q	[2018-06-11]
10-K	[2018-04-02]
10-Q	[2017-12-11]
10-Q	[2017-09-06]
10-Q	[2017-06-08]
10-K	[2017-04-03]
10-Q	[2016-12-12]
10-Q	[2016-09-08]
10-Q	[2016-06-09]
10-K	[2016-03-31]
10-Q	[2015-12-08]
10-Q	[2015-09-09]
10-Q	[2015-06-09]
10-K	[2015-04-01]
10-Q	[2014-12-10]
10-Q	[2014-09-09]
10-Q	[2014-06-09]
10-K	[2014-04-01]
10-Q	[2013-12-10]
10-Q	[2013-09-09]
10-Q	[2013-06-10]
10-K	[2013-04-01]
10-Q	[2012-12-10]
10-Q	[2012-09-10]
10-Q	[2012-06-11]
10-K	[2012-04-02]