What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-04-01 compared with 2021-04-01 · 211 added, 223 removed, 1114 unchanged (28% of the section changed)

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January 31, 2021, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for the year ended January 31, 2021, and our report dated April 1, 2021, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s February 1, 2019 adoption of Accounting Standards Update (“ASU”) 2016-12, Leases (Topic 842).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January 31, 2022, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for the year ended January 31, 2022, and our report dated April 1, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Co-President and Chief Creative Officer, URBN;

Global Chief Executive Officer, Anthropologie Group

Kelly Campbell

Sukhinder Singh Cassidy (3)

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Morgenfeld (1)(2)

Nominee for Director

Member of the Audit Committee.

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Member of the Nominating and Governance Committee.

Member of the Compensation and Leadership Development Committee effective as of March 9, 2021.

Member of the Nominating and Governance Committee effective as of March 9, 2021.

Hayne co-founded Urban Outfitters in 1970.

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Hayne served as the Company’s principal executive officer until 2007 and again beginning in January 2012.

Hayne, Chief Executive Officer of Free People and Chief Creative Officer of the Company, is Mr.

Hayne, Co-President and Chief Creative Officer of the Company, is Mr.

Hayne’s spouse.

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After graduating from the University of Virginia School of Law in 2001, Mr.

Hayne began his legal career in Pepper Hamilton LLP’s Commercial Litigation department before moving to Morgan Lewis & Bockius LLP in July 2003.

Hayne began his legal career

in Pepper Hamilton LLP’s Commercial Litigation department before moving to Morgan Lewis & Bockius LLP in July 2003.

Hayne, the Company’s current Chairman and Chief Executive Officer, is Mr.

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Hayne brings a wealth of both Company-specific and industry-wide knowledge and experience to the Board of Directors.

Smith joined the Company in April 2021 as the Global Chief Executive Officer of the Anthropologie Group.

Prior to joining the Company, she was the Executive Vice President and Chief Merchandising Officer at Tilly’s from October 2019 through April 2021.

Smith began her career on the sales floor at Nordstrom in Southern California that eventually led her to the role of Executive Vice President & General Merchandise Manager of Women’s, Young Contemporary, Designer, and Specialized Apparel, which she held from October 2016 to September 2019, and was an instrumental leader for a variety of significant merchandise management roles over her 25 year career.

Antoian is a partner of and Founder of Zeke Capital Advisors, a financial advisory firm.

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Antoian holds an MBA in Finance and has financial and investment experience as a result of his experience as a CFA, CPA, financial advisor and portfolio manager.

Antoian also serves as a director of three not-for-profit entities.

Antoian serves as a director of a not-for-profit entity and two private companies.

As an independent director, Mr.

Antoian brings his in-depth understanding of, and expertise in, finance and accounting to the Board of Directors.

Campbell has served as President of Peacock, NBCUniversal’s streaming service, since November 1, 2021.

Prior to joining Peacock, Ms.

Campbell served as President of Hulu from February 2020 to October 2021 and as Chief Marketing Officer of Hulu from August 2017 to February 2020.

From 2005 to 2017, Ms.

Campbell held a variety of roles at Google across the Google Ads and Google Cloud businesses.

Campbell brings a wealth of knowledge and experience about marketing and subscription businesses to the Board of Directors.

Campbell was initially identified by Diversified Search, an outside search firm.

Singh Cassidy is chairman of theBoardlist, a premium talent marketplace she founded in 2015 that is aimed at connecting highly endorsed women leaders with board opportunities in the technology industry.

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He also holds a Masters in Liberal Arts degree and serves as a trustee of various not-for-profit entities and academic institutions.

In early 2021, Mr.

Cherken was appointed Honorary Consul for Philadelphia of the Republic of Armenia.

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Maredia’s in-depth experience in the consumer sector, including high growth omni-channel businesses, as well as his public company experience as Chief Executive Officer, Chief Financial Officer and board member brings valuable expertise to serve as a director.

Maredia was initially identified by Diversified Search, an outside search firm.

McDonald has been retired since 2017.

Previously, he held the principal officer position of Chief Financial Officer of Kohl’s Corporation from 2015 to 2017, and prior thereto, he served as Senior Executive Vice President and Chief Financial Officer of Kohl’s

beginning in 2010.

McDonald began his tenure at Kohl’s in 2003 as its Executive Vice President and Chief Financial Officer.

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McDonald’s experience as a chief financial officer and in other senior executive leadership roles working with publicly traded consumer products companies provides him with a distinctive set of qualifications and skills to serve as a director.

Morgenfeld is the Chief Financial Officer of Pinterest, Inc., a position he has held since 2016.

Morgenfeld is the Chief Financial Officer and Head of Business Operations of Pinterest, Inc., a position he has held since 2019.

From 2016 to 2019, he served as Chief Financial Officer of Pinterest, Inc.

Before joining Pinterest, Mr.

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Prior to his role at Hewlett-Packard, Mr.

Morgenfeld was as an investment partner at Silver Lake Partners from 2004 to 2013.

Morgenfeld was an investment partner at Silver Lake Partners from 2004 to 2013.

Morgenfeld graduated first in his class from the United States Military Academy and also holds an MBA degree from Stanford University.

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Mulliken’s decades of experience in ecommerce and multichannel retail as Chief Technology Officer and member of the executive team of a publicly traded company, as well as a strategy consultant and independent director, provides him valuable perspective as a director.

Mulliken was initially identified by Diversified Search, an outside search firm.

Egan has been serving as an independent strategy consultant to high growth private equity and venture-capital backed consumer companies since 2018, currently as principal of Egan Advisory Group.

Egan founded Gatheredtable, a consumer software as a service company offering customized meal planning, and served as its Chief Executive Officer until Gatheredtable was sold to a strategic buyer in 2018.

From 2010 to 2012, Ms.

Egan served as head of global strategy and corporate development for Starbucks Corporation and in 2012 led Starbucks’ food category in the Americas.

From 1996 to 2010, Ms.

Egan was a management consultant and Managing Director at The Boston Consulting Group, where she partnered with several leading consumer and retail brands to develop and successfully implement aggressive growth strategies.

Egan also serves on the board of directors of American Campus Communities, Inc.

and Noodles & Company.

Egan’s decades of experience partnering with management teams to develop and implement consumer-centric strategies for high growth omnichannel consumer brands, as well as working extensively with founders and entrepreneurs, gives her a unique set of skills to contribute to the Board of Directors.

The Board of Directors has proposed to include Ms.

Egan as a nominee to the Company’s Board of Directors in the Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders upon recommendation by the Nominating and Governance Committee and initial identification by Diversified Search, an outside search firm.

Code of Conduct and Ethics

We have a written Code of Conduct and Ethics (the “Code”) that applies to our directors and employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer.

The Code includes guidelines relating to compliance with laws, including anti-bribery and illegal payment laws, the ethical handling of actual or potential conflicts of interest, the use of corporate opportunities, protection and use of our confidential information, accepting gifts and business courtesies, accurate financial reporting and procedures for promoting compliance with, and reporting violations of, the Code.

The Code includes guidelines relating to compliance with laws, including anti-bribery and illegal payment laws, the ethical handling of actual or potential conflicts of interest, the use of

corporate opportunities, protection and use of our confidential information, accepting gifts and business courtesies, accurate financial reporting and procedures for promoting compliance with, and reporting violations of, the Code.

The Code is available on our website at www.urbn.com .

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Principal Accountant Fees and Services

Our independent registered public accounting firm is Deloitte & Touche LLP (PCAOB ID No.

Information required by this item is incorporated herein by reference from the Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders.

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000-22754) filed on June 18, 2009.

Form of 2004 Plan—Incentive Stock Option Agreement is incorporated by reference to Exhibit 99.3 of the Company’s

Current Report on Form 8-K (file no.

Form of 2004 Plan—Incentive Stock Option Agreement is incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 8-K (file no.

000-22754) filed on June 18, 2009.

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Limited Waiver, dated as of August 12, 2020, by and among Urban Outfitters, Inc., the other Loan Parties party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, under that certain Amended and Restated Credit Agreement dated as of June 29, 2018, among the Company, the Subsidiary Borrowers, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent is incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on September 9, 2020.

Separation Agreement, dated October 12, 2020, between Urban Outfitters, Inc.

and Calvin B.

Employment Agreement, dated February 20, 2021, between Urban Outfitters, Inc.

and Tricia D.

Smith incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (file no.

000-227545) filed on September 9, 2021 .

List of Subsidiaries.

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April 1, 2022

/ S / K ELLY C AMPBELL

Kelly Campbell

/ S / S UKHINDER S INGH C ASSIDY

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April 1, 2022

/ S / H ARRY S.

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2022, based on criteria established in lnternal Control - lntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 1, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, effective February 1, 2019, the Company adopted FASB Accounting Standards Update 2016-12, Leases (Topic 842), using the alternative transition method which does not require prior periods to be recast.

Basis for Opinion

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The Company makes significant assumptions to evaluate retail location assets for possible indications of impairment.

When an indication of impairment is identified, management makes significant assumptions to estimate cash flows from forecasts of sales and gross profit for retail locations and, when the carrying amount of the location assets exceed those cash flows, to determine the fair value

of the Company’s operating lease right-of-use assets.

For the year ended January 31, 2021, the Company recorded an impairment charge of $15.5 million for retail location assets.

Given the Company’s evaluation of retail location asset impairment requires management to make significant assumptions, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts of retail location assets may not be recoverable, and, when applicable, developed reasonable forecasts of sales and gross profit and fair value estimates for operating lease right-of-use assets, including the methodology applied and the measurement inputs of market rent, required a high degree of auditor judgment and an increased extent of effort, including the assistance of our fair value specialists.

carrying amounts of retail location assets may not be recoverable, and, when applicable, developed reasonable forecasts of sales and gross profit and fair value estimates for operating lease right-of-use assets, including the methodology applied and the measurement inputs of market rent, required a high degree of auditor judgment and an increased extent of effort, including the assistance of our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

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Testing retail location assets for possible indications of impairment, including searching for locations with a current period loss and a history of losses.

Evaluating the events or changes in circumstances identified by management for consistency with evidence obtained in other areas of the audit.

Evaluating whether the events or changes in circumstances that may have existed were identified by management, consistent with evidence obtained in other areas of the audit.

We evaluated management’s ability to accurately estimate cash flow from forecasts of sales and gross profit for retail locations and the reasonableness of the forecasts by comparing them to:

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Interest expense

Other (expense) income

Other expense

Income before income taxes

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Fiscal Year Ended January 31,

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation

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

Total other comprehensive income (loss)

Total other comprehensive (loss) income

Comprehensive income

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Share-based awards

Cumulative effect of change in accounting pronouncement

Share repurchases

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Cash flows from financing activities:

Borrowing under debt

Borrowings under debt

Repayments of debt

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Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

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(the “Company” or “Urban Outfitters”), which was founded in 1970, was incorporated in the Commonwealth of Pennsylvania in 1976.

The principal business activity of the Company is the operation of a general consumer product retail, wholesale and subscription business selling to customers through various channels including retail locations, websites, catalogs and mobile applications.

The principal business activity of the Company is the operation of a general consumer product retail, wholesale, subscription and resale business selling to customers through various channels including retail locations, websites, catalogs and mobile applications.

As of January 31, 2022 and 2021, the Company operated 682 and 644 stores, respectively.

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In addition, the Company’s Wholesale segment sold and distributed apparel to department and specialty stores worldwide, digital businesses and to the Company’s Retail segment.

The Company’s Subscription segment consists of the Nuuly brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019.

The Company’s Nuuly segment, formerly known as the Subscription 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.

Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell women’s, men’s, and kids’ apparel, shoes, and accessories from any brands.

Impact of the Coronavirus Pandemic

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide, causing public health officials to recommend precautions to mitigate the spread of the virus, including warning against congregating in heavily populated areas, such as malls and shopping centers.

On March 14, 2020, the Company announced that it temporarily closed all stores globally;

however, the Company continued to fulfill digital orders from its stores where permitted by local authorities.

The Company’s distribution and fulfillment centers remained open to support the digital business and the Wholesale segment operations but have done so with additional safety procedures and enhanced cleaning to protect the health of employees.

The Company closed its offices and showrooms globally with the exception of location dependent employees.

All other corporate and showroom employees are working remotely.

The COVID-19 pandemic continues to materially impact the Company’s operations in the United States and globally, and related government and private sector responsive actions have and will continue to affect its business operations.

Because it is impossible to predict the effect and ultimate impact of the COVID-19 pandemic, current financial information may not be necessarily indicative of future operating results and the Company’s plans as described below may change.

In response to the COVID-19 pandemic, the Company has taken many additional measures to protect its financial position and increase financial flexibility during this challenging time period.

Those included:

Furloughing a substantial number of store, wholesale and home office associates through July 31, 2020, with some furloughs resulting in layoffs as of the same date,

Limiting all new hiring commensurate with the operational needs of the Company,

Temporarily suspending and since reinstating at a reduced value, all performance bonuses for fiscal 2021 and delaying merit increases for five months until September 2020,

Borrowing $ 220,000 under its Amended Credit Facility (as defined herein) to further protect its cash reserves, and subsequently repaying $ 100,000 on June 17, 2020 and $ 120,000 on September 16, 2020 (see Note 8, “Debt”),

Reducing fiscal 2021 capital budget by over $ 100,000 from approximately $ 260,000 to approximately $ 160,000 by delaying or cancelling projects,

Adjusting inventory levels by cancelling or delaying many orders, asking for price concessions on those remaining and maintaining tighter management of inventory overall as stores reopened,

Reducing all discretionary expenses, including creative and travel, among others,

Extending payment terms for both merchandise and non-merchandise vendor invoices by 30 days ,

Reducing certain occupancy and occupancy related expenses,

Reducing investments in two Company growth initiatives:

Nuuly and expansion into China,

Temporarily reducing senior leadership compensation through September 2020,

Temporarily suspending Board of Directors’ cash compensation, which has since been reinstated, and

Temporarily suspended share repurchases during fiscal 2021 (see Note 12, “Shareholders’ Equity”).

As a result of the COVID-19 pandemic, during fiscal 2021, the Company recorded certain additional reserves and non-cash charges.

The Company assessed the value of its inventory in the Retail and Wholesale segments and recorded an increase in inventory obsolescence reserves during the first quarter of fiscal 2021, and as a result of disciplined inventory control and better than planned product performance, during the remainder of fiscal 2021, the Company decreased a portion of its inventory obsolescence reserves.

During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment, and during the remainder of fiscal 2021, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables.

Finally, during fiscal 2021, the Company determined that certain long-lived assets at the Company’s retail locations were unable to recover their carrying value primarily due to the impact of the mandated store closures as a result of the

Impact of the Coronavirus Pandemic on Fiscal 2021

In March 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic.

Consequently, the Company announced that it temporarily closed all stores, offices and showrooms globally, but began to reopen stores in late April 2020.

The Company’s distribution and fulfillment centers remained open to support the digital business and the Wholesale segment operations.

During the fourth quarter of fiscal 2021, certain store operations were again impacted by an additional round of temporary store closures and occupancy restrictions, primarily in Europe and Canada.

In response to the COVID-19 pandemic, the Company took measures to protect its financial position and increase financial flexibility.

During fiscal 2021, the Company recorded certain additional reserves, including inventory obsolescence reserves and an allowance for doubtful accounts for Wholesale segment customer accounts receivable, and non-cash charges, primarily store impairment charges.

Impact of the Coronavirus Pandemic on Fiscal 2022

The COVID-19 pandemic continued to negatively impact the Company’s store operations during fiscal 2022 with residual impacts on store traffic and store sales resulting from store closures primarily in Europe and Canada, occupancy restrictions and reduced store hours globally.

During the second quarter of fiscal 2022, all remaining COVID-19 government mandated store closures in Europe and Canada expired, although some capacity restrictions continued in certain European and Canadian stores.

The COVID-19 pandemic and general unfavorable macro-economic conditions have also disrupted the Company’s global supply chain in fiscal 2022, leading to COVID-19 related factory closures, continued port congestions and shipping delays, which have resulted in inventory receipt delays and an increase in inbound freight costs.

The Company made a strategic decision to bring certain product categories in earlier in the third and fourth quarters of fiscal 2022 in an attempt to minimize the impact of such disruptions on customer demand.

The Company continued to qualify for certain government assistance programs that partially offset related expenses in locations impacted by closures during fiscal 2022.

As of the end of the second quarter of fiscal 2022, however, the programs either expired or the Company no longer qualified for such programs in the United States and Canada, and as of the end of the third quarter of fiscal 2022, the Company no longer qualified for the majority of such programs in Europe.

The Company recorded the benefit of the government assistance programs as an offset to selling, general and administrative expenses or store occupancy expenses in cost of sales based on the nature of the related expenses offset by such programs.

Impact of the Coronavirus Pandemic and Macroeconomic Uncertainties on Future Operations

The COVID-19 pandemic continues to impact the Company’s operations and related government and private sector responsive actions could continue to affect its business operations.

The Company is also experiencing COVID-19 supply chain disruptions resulting in inventory receipt delays.

Furthermore, the Company expects that our operations will continue to be influenced by general economic conditions resulting from COVID-19, such as labor shortages and the impact of inflation including higher wages, increased merchandise costs and higher inbound transportation costs.

The Company cannot reasonably estimate the duration and severity of the COVID-19 pandemic, which has had and may continue to have a material impact on its business.

As a result, current financial information may not be necessarily indicative of future operating results and the Company’s plans to address the impact of the COVID-19 pandemic may change.

URBAN OUTFITTERS, INC.

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(in thousands, except share and per share data)

COVID-19 pandemic and lower store productivity once opened.

These assets were written down to their fair value resulting in impairment charges of $ 15,496 across 42 retail locations.

As a result of the global COVID-19 pandemic, governments in the United States, United Kingdom (“U.K.”), Canada and various other jurisdictions implemented programs to encourage companies to retain and pay employees that are unable to work or are limited in the work that they can perform in light of closures or a significant decline in sales.

The Company qualified for certain of these programs, which partially offset related expenses.

The Company continued to pay all employees through at least April 1, 2020.

On March 31, 2020, the Company announced it furloughed a substantial number of store, wholesale and home office employees beginning April 1, 2020.

The furlough period continued through July 31, 2020, with some furloughs resulting in layoffs as of the same date.

Furloughed employees continued to receive enrolled benefits during the furlough period.

The Company recorded the cumulative benefit of the programs implemented by the United States and Canada in selling, general and administrative expenses during fiscal 2021.

Benefits related to the programs implemented by the U.K.

and other European countries were recorded as an offset to store occupancy expenses in cost of sales during fiscal 2021.

Beginning April 25, 2020, the Company started to reopen stores in select states and countries in accordance with local government guidelines.

As of July 31, 2020, substantially all of the Company’s stores had reopened.

However, during the fourth quarter of fiscal 2021 and into the first quarter of fiscal 2022, our store operations have been impacted by temporary store closures, primarily in Europe, and reduced customer traffic in reopened store locations globally due in part to local government guidelines that have imposed certain operating restrictions, including capacity limits.

The Company cannot reasonably estimate the duration and severity of the COVID-19 pandemic, which has had and may continue to have a material impact on our business.

Summary of Significant Accounting Policies

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Securities classified as non-current assets have maturity dates greater than one year from the balance sheet date.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Accounts Receivable

Accounts receivable primarily consists of amounts due from the Company’s wholesale customers as well as credit card receivables outstanding with third-party credit card vendors.

During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment due to the COVID-19 pandemic, and during the remainder of fiscal 2021, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables.

During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment due to the COVID-19 pandemic, and during the remainder of fiscal 2021 and the first quarter of fiscal 2022, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables.

The activity of the allowance for doubtful accounts for the years ended January 31, 2022, 2021 and 2020 was as follows:

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Cost is determined on the first-in, first-out method and includes the cost of merchandise and import-related costs, including freight, import duties and taxes and agent commissions.

A periodic review of inventory is performed in order to determine if inventory is properly stated at the lower of cost or net realizable value.

A periodic review of inventory is performed in order to determine if

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

inventory is properly stated at the lower of cost or net realizable value.

Factors the Company considers in its review, such as future expected consumer demand and fashion trends, current aging, current and anticipated retail markdowns or wholesale discounts and class or type of inventory, are analyzed to determine estimated net realizable value.

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Rental Product

The cost of Subscription 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.

The cost of Nuuly Rent 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.

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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.

Amortization expense was $ 6,609 and $ 3,051 for fiscal 2021 and 2020, respectively.

Amortization expense was $ 8,224 and $ 6,609 and $ 3,051 for fiscal 2022, 2021, and 2020, respectively.

Impairment of Long-lived Assets

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Factors such as store type (e.g., mall versus free-standing), location (e.g., urban area versus college campus or suburb), current marketplace awareness of our brands, local customer demographic data and current fashion trends are all considered in determining the time frame required for a retail location to achieve positive financial results.

When events indicate that an asset may be impaired and the estimated undiscounted cash flows are less than the carrying amount of the asset, the impaired asset is adjusted to its estimated fair value and an impairment loss is recorded.

The estimated fair value of the asset or asset group is based on future cash flows

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

of the asset or asset group.

When events indicate that an asset may be impaired and the estimated undiscounted cash flows (based on forecasts of sales and gross profit) are less than the carrying amount of the asset, the impaired asset is adjusted to its estimated fair value and an impairment loss is recorded.

The estimated fair value of the asset or asset group is based on future cash flows of the asset or asset group.

For lease right-of-use assets, the Company determines the estimated fair value of the assets by comparing the discounted contractual rent payments to estimated market rent using an acceptable valuation methodology.

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During fiscal 2020, the Company recorded impairment charges for eight retail locations, totaling $ 14,611 with a carrying value after impairment of $ 51,900 primarily related to the right-of-use assets.

During fiscal 2019, the Company recorded impairment charges for four retail locations, totaling $ 3,544 .

During the Company’s assessment of current and future performance, it was determined that these retail locations would not be able to generate sufficient cash flow over the expected remaining lease term to recover the remaining carrying value of the respective retail location assets.

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The Company adopted the new guidance using a modified retrospective approach at the beginning of the period of adoption.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

The Company has operating leases for stores, distribution and fulfillment centers, corporate offices and equipment.

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The right-of-use asset is initially equal to the value of the lease liability less any amounts received from the landlord as incentives or tenant improvement allowances.

During fiscal 2021, the Company received rent concessions for a number of our stores and continue to negotiate for additional rent concessions at various other store locations.

During fiscal 2022 and 2021, the Company received rent concessions for a number of our stores and continue to negotiate for additional rent concessions at various other store locations.

To the extent the rent concessions do not result in a substantial increase in total payments in the existing lease, the Company has accounted for such rent concessions as negative variable rent.

To the extent the rent concessions do result in a substantial increase in total payments in the existing lease, the Company has accounted for such rent concessions as a lease modification.

Rent concessions recorded by the Company during fiscal 2021, as either negative variable rent or lease modifications have not had a material impact on the Company’s Financial Statements.

Rent concessions recorded by the Company during fiscal 2022 and 2021, as either negative variable rent or lease modifications have not had a material impact on the Company’s Financial Statements.

Revenue Recognition

Merchandise is sold through retail stores, catalogs and the digital sales channel, as well as to wholesale customers, franchise partners and subscription customers.

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.

The Company has elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.

Accordingly, the Company will recognize merchandise revenue for the Retail segment for its single performance obligation at the point of sale or at the time of shipment, which is when transfer of control to the customer occurs.

A Subscription segment customer may purchase merchandise in her possession that was included in the order that was delivered as part of the monthly subscription rental service.

The Company recognize merchandise revenue for the Subscription segment for its single performance obligation when the customer purchases the merchandise through the website or mobile application.

Accordingly, the Company will recognize merchandise revenue for the Retail segment for its single performance obligation at the point of sale, when furniture is delivered or at the time of shipment for non-furniture merchandise, which is when transfer of control to the customer occurs.

A Nuuly Rent customer may purchase merchandise in her possession that was included in the order that was delivered as part of the monthly subscription rental service.

The Company recognize merchandise revenue for Nuuly Rent for its single performance obligation when the customer purchases the merchandise through the website or mobile application.

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.

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Payment terms in the Wholesale segment vary by customer with the most common being a net 30 -day policy.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Menus & Venues:

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Subscription Fees:

Revenue for the Subscription segment is generated through monthly subscription fees and the purchase of merchandise in a customer’s possession.

Revenue for Nuuly Rent is generated through monthly subscription fees and the purchase of merchandise in a customer’s possession.

The monthly subscription rental fee is recognized as revenue on the date the customer is billed.

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.

Merchandise sales to Subscription segment customers are discussed above under Merchandise.

Merchandise sales to Nuuly Rent customers are discussed above under Merchandise.

The Company accounts 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.

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The Company’s gift cards do not expire.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Sales Return Reserve

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The Company expenses all store opening and organization costs as incurred, including travel, training, recruiting, salaries and other operating costs, and all such costs are included in “Selling, general and administrative expenses” in the Consolidated Statements of Income.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Website Development Costs

6 unchanged sentences

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Net Income Per Common Share

24 unchanged sentences

Management believes that it is not exposed to any significant risks related to its cash accounts.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Commitments and Contingencies

1 unchanged sentence

The Company records a reserve for estimated losses when information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

Reclassification

Prior period amounts for the non-operating income and expense lines have been reclassified to conform to the current year presentation in the Consolidated Statements of Income.

Recent Accounting Pronouncements

2 unchanged sentences

Contract receivables occur when the Company satisfies all of its performance obligations under a contract and recognizes revenue prior to billing or receiving consideration from a customer for which it has an unconditional right to payment.

Contract receivables arise from credit card and other electronic payment transactions and sales to Wholesale segment customers and franchisees.

For the year ended January 31, 2021, the opening and closing balance of contract receivables, net of allowance for doubtful accounts, was $ 88,288 and $ 89,952 , respectively.

Contract receivables arise from credit card and other electronic payment transactions and sales to the Company’s Wholesale segment customers and franchisees.

For the year ended January 31, 2022, the opening and closing balance of contract receivables, net of allowance for doubtful accounts,

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

was $ 89,952 and $ 63,760 , respectively.

For the year ended January 31, 202 1 , the opening and closing balance of contract receivables, net of allowance for doubtful accounts, was $ 88,288 and $ 89,952 , respectively.

Contract receivables are included in “Accounts receivable, net of allowance for doubtful accounts” in the Consolidated Balance Sheets.

During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment due to the COVID-19 pandemic, and during the remainder of fiscal 2021, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables.

During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment due to the COVID-19 pandemic, and during the remainder of fiscal 2021 and the first quarter of fiscal 2022 , the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables.

Contract liabilities represent unearned revenue and result from the Company receiving consideration in a contract with a customer for which it has not satisfied all of its performance obligations.

3 unchanged sentences

For the year ended January 31, 2021, the opening and closing balance of contract liabilities was $ 52,926 and $ 61,986 , respectively.

Contract liabilities are included in “Accrued expenses and other current liabilities” in the Consolidated Balance Sheets.

Contract liabilities are included in “Accrued expenses, accrued compensation and other current liabilities” in the Consolidated Balance Sheets.

During the year ended January 31, 2022, the Company recognized $ 30,071 of revenue that was included in the contract liability balance at the beginning of the period.

1 unchanged sentence

See Note 17, “Segment Reporting,” for additional information including net sales recorded by reportable segment and net sales from contracts with customers by merchandise category.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Marketable Securities

3 unchanged sentences

Short-term Investments:

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

US Treasury securities

Commercial paper

Long-term Investments:

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

US Treasury securities

Mutual funds, held in rabbi trust

Federal government agencies

Certificates of deposit

As of January 31, 2021

Short-term Investments:

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

Commercial paper

Federal government agencies

Certificate of deposit

Long-term Investments:

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

Mutual funds, held in rabbi trust

Federal government agencies

Certificates of deposit

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Proceeds from the sales and maturities of available-for-sale securities were $ 280,701 , $ 396,260 and $ 428,508 in fiscal 2022, 2021 and 2020, respectively.

The Company initially liquidated its marketable securities portfolio earlier in fiscal 2021 primarily to preserve financial flexibility and maintain liquidity in response to the COVID-19 pandemic, but reinvested in a marketable securities portfolio in the fourth quarter of fiscal 2021.

The Company included in “Interest income,” in the Consolidated Statements of Income, a net realized loss of $ 419 during fiscal 2021, a net realized gain of $ 39 during fiscal 2020 and a net realized loss of $ 22 during 2019.

The Company included in “Interest income,” in the Consolidated Statements of Income, a net realized gain of $ 11 during fiscal 2022, a net realized loss of $ 419 during fiscal 2021 and a net realized gain of $ 39 during 2020.

Amortization of discounts and premiums, net, resulted in a reduction of “Interest income” of $ 6,614 , $ 1,574 and $ 706 for fiscal 2022, 2021 and 2020, respectively.

2 unchanged sentences

The Company elected the fair value option for financial assets for the mutual funds held in the rabbi trust resulting in all unrealized gains and losses being recorded in “Interest income” in the Consolidated Statements of Income.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

The following tables show the gross unrealized losses and fair value of the Company’s marketable securities with unrealized losses that are not deemed to have credit losses, aggregated by the length of time that individual securities have been in a continuous unrealized loss position, at January 31, 2022 and 2021, respectively.

3 unchanged sentences

Description of Securities

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

US Treasury securities

Mutual funds, held in rabbi trust

Federal government agencies

January 31, 2021

2 unchanged sentences

Description of Securities

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

Mutual funds, held in rabbi trust

Federal government agencies

As of January 31, 2022 and 2021, there were a total of 656 and 184 securities with unrealized loss positions within the Company’s portfolio, respectively.

5 unchanged sentences

Unobservable inputs that reflect the Company’s own assumptions.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy.

2 unchanged sentences

January 31, 2022

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-funded municipal bonds

US Treasury securities

Mutual funds, held in rabbi trust

Commercial paper

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Federal government agencies

Certificates of deposit

Marketable Securities Fair Value as of

January 31, 2021

Municipal and pre-refunded municipal bonds

Corporate bonds

Municipal and pre-refunded municipal bonds

Mutual funds, held in rabbi trust

Commercial paper

Federal government agencies

Certificates of deposit

Financial assets

7 unchanged sentences

Non-financial assets

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

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

The fair value of property and equipment was determined using a discounted cash-flow model that utilized Level 3 inputs.

7 unchanged sentences

These assets were written down to a fair value resulting in impairment charges of $ 15,496 and $ 14,611 in fiscal 2021 and 2020, respectively.

During fiscal 2020, the Company evaluated the fair value of the Menus & Venues brand as compared to the carrying value and determined that the goodwill assigned to the reporting unit is impaired in full, resulting in a goodwill impairment charge of $ 13,911 .

During fiscal 2020, the Company evaluated the fair

URBAN OUTFITTERS, INC.

1 unchanged sentence

(in thousands, except share and per share data)

value of the Menus & Venues brand as compared to the carrying value and determined that the goodwill assigned to the reporting unit is impaired in full, resulting in a goodwill impairment charge of $ 13,911 .

Property and Equipment

23 unchanged sentences

The funds available under the Amended Credit Facility may be used for working capital and other general corporate purposes.

The Amended Credit Facility provides for interest on borrowings, at the Company’s option, at either (i) adjusted LIBOR, CDOR or EURIBOR plus an applicable margin ranging from 1.125 % to 1.375 %, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125 % to 0.375 %, each such applicable margin depending on the level of availability under the Amended Credit Facility.

Currently, there has not been a replacement reference rate identified for LIBOR in the Amended Credit Facility.

The Amended Credit Facility provides for interest on borrowings, at the Company’s option, at either (i) adjusted LIBOR, CDOR, SONIA or EURIBOR plus an applicable margin ranging from 1.125 % to 1.375 %, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125 % to 0.375 %, each such applicable margin depending on the level of availability under the Amended Credit Facility.

Depending on the type of borrowing, interest on the Amended Credit Agreement is payable monthly, quarterly or at the end of the interest period.

2 unchanged sentences

subsidiaries.

The obligations under the Amended Credit Facility are secured by a first-priority security interest in inventory, accounts receivable and certain other assets of the Company and certain of its U.S.

subsidiaries.

The obligations of URBN Canada Retail, Inc.

are secured by a first-priority security interest in its inventory, accounts receivable, and certain other assets.

The Amended Credit

The obligations under the Amended Credit Facility are secured by a first-priority security interest in inventory, accounts

URBAN OUTFITTERS, INC.

1 unchanged sentence

(in thousands, except share and per share data)

Agreement contains customary representations and warranties, negative and affirmative covenants and provisions relating to events of default.

receivable and certain other assets of the Company and certain of its U.S.

subsidiaries.

The obligations of URBN Canada Retail, Inc.

are secured by a first-priority security interest in its inventory, accounts receivable, and certain other assets.

The Amended Credit Agreement contains customary representations and warranties, negative and affirmative covenants and provisions relating to events of default.

As of January 31, 2022, the Company had $ 0 in borrowings under the Amended Credit Facility.

3 unchanged sentences

Outstanding stand-by letters of credit, which reduce the funds available under the Amended Credit Facility, were $ 13,140 .

Interest expense for the Amended Credit Facility for the year ended January 31, 2021, was $ 2,720 , which was included in “Interest Expense,” in the Consolidated Statements of Income.

Interest expense for the Amended Credit Facility was $ 1,046 , $ 2,720 , and $ 1,046 for the years ended January 31, 2022, 2021, and 2020, respectively, which was included in “Interest expense,” in the Consolidated Statements of Income.

The Company has operating leases for stores, distribution and fulfillment centers, corporate offices and equipment.

16 unchanged sentences

Total discounted future minimum lease payments

As of January 31, 2021, the Company had commitments of approximately $ 12,337 not included in the amounts above related to nine executed but not yet commenced store leases.

As of January 31, 2022, the Company had commitments of approximately $ 12,589 not included in the amounts above related to seven executed but not yet commenced store leases.

Certain store leases provide for contingent rentals when sales exceed specified breakpoint levels, in lieu of a fixed minimum rent, that are not reflected in the above table.

2 unchanged sentences

In response to the COVID-19 pandemic and mandated store closures, the Company withheld certain minimum lease payments due to landlords.

The amount withheld at January 31, 2021 was included in “Current portion of operating lease liabilities” in the Consolidated Balance Sheets.

During fiscal 2021, the Company received rent concessions for a number of our stores and continue to negotiate for additional rent concessions at various other store locations.

To the extent the rent concessions do not result in a substantial increase in total payments in the existing lease, the Company has accounted for such rent concessions as negative variable rent.

To the extent the rent concessions do result in a substantial increase in total payments in the existing lease, the Company has accounted for such rent concessions as a lease

The amounts withheld at January 31, 2022 and January 31, 2021 were included in “Current portion of operating lease liabilities” in the Consolidated Balance Sheets.

During fiscal 2022 and 2021, the Company received rent concessions for a number of our stores and continue to negotiate for additional rent concessions at various other store locations.

To the extent the rent concessions do not result in a substantial increase in

URBAN OUTFITTERS, INC.

1 unchanged sentence

(in thousands, except share and per share data)

modification.

Rent concessions recorded by the Company during fiscal 2021 , as either negative variable rent or lease modifications have not had a material impact on the Company’s Consolidated Financial Statements.

total payments in the existing lease, the Company has accounted for such rent concessions as negative variable rent.

To the extent the rent concessions do result in a substantial increase in total payments in the existing lease, the Company has accounted for such rent concessions as a lease modification.

Rent concessions recorded by the Company during fiscal 202 2 and 2021 , as either negative variable rent or lease modifications have not had a material impact on the Company’s Consolidated Financial Statements.

The components of income (loss) before income taxes are as follows:

9 unchanged sentences

Foreign taxes

Net impact of U.S.

Uncertain impact of U.S.

Uncertain tax positions

Stock compensation

42 unchanged sentences

tax requirements on undistributed foreign earnings, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign and state taxes.

The Company continues to believe that certain foreign earnings are indefinitely reinvested and expects future U.S.

cash generation to be sufficient to meet future U.S.

The Company continues to believe that foreign earnings are indefinitely reinvested excluding earnings that have previously been subject to the one-time deemed repatriation transition tax required by the U.S.

Tax Cuts and Jobs Act.

With respect to outside basis differences in all other non-U.S.

subsidiaries, the Company expects that either (i) such basis differences will not reverse in the foreseeable future, or (ii) such basis differences will reverse in a tax-neutral manner.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

6 unchanged sentences

Balance at the end of the period

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

The total amount of net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $ 21,288 and $ 23,497 as of January 31, 2022 and 2021, respectively.

4 unchanged sentences

federal jurisdiction and various state and foreign jurisdictions.

The Company is under audit in certain foreign jurisdictions.

The Company is under audit in certain state and foreign jurisdictions.

Certain federal, foreign and state jurisdictions are subject to audit from fiscal 2010 to 2021.

12 unchanged sentences

Stock Options

Stock Appreciation Rights

Performance Stock Units (1)

Restricted Stock Units

(i) the reversal of $ 1,017 of previously recognized compensation expense in fiscal 2021, related to 87,997 PSU’s that will not vest as the achievement of the related performance target is not probable;

(ii) the reversal of $ 803 of previously recognized compensation expense in fiscal 2020, related to 54,356 PSU’s that will not vest as the achievement of the related performance target is not probable;

and (iii) the reversal of $ 4,213 of previously recognized compensation expense in fiscal 2019, related to 313,077 PSU’s that will not vest as the achievement of the related performance target is not probable.

(i) the reversal of $ 1,017 of previously recognized compensation expense in fiscal 2021, related to 87,997 PSU’s that were not projected to vest as the achievement of the related performance target was deemed not probable, of which $ 364 related to 41,332 PSU’s was subsequently recognized in fiscal 2022 due to the Company’s better than projected performance that resulted in the performance target being achieved;

and (ii) the reversal of $ 803 of previously recognized compensation expense in fiscal 2020, related to 54,356 PSU’s that will not vest as the achievement of the related performance target is not probable.

The total tax benefit associated with share-based compensation expense for the fiscal years ended January 31, 2022, 2021 and 2020 was $ 6,311 , $ 4,899 and $ 5,230 , respectively.

The tax benefit realized from share-based compensation for the fiscal years ended January 31, 2022, 2021 and 2020 was $ 5,573 , $ 2,528 and $ 4,425 , respectively.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Stock Options

2 unchanged sentences

Stock options granted to non-employee directors generally vest over a period of one year .

There were no stock options granted in the fiscal year ended January 31, 2021, as beginning in fiscal 2021, the Company began to grant restricted stock units to non-employee directors instead of stock options.

A Black-Scholes model was used to estimate the fair value of stock options granted in the fiscal years ended January 31, 2020 and 2019.

There were no stock options granted in the fiscal year ended January 31, 2022 and 2021, as beginning in fiscal 2021, the Company began to grant restricted stock units to non-employee directors instead of stock options.

A Black-Scholes model was used to estimate the fair value of stock options granted in the fiscal year ended January 31, 2020.

The model uses assumptions including the risk-free rate of interest, expected volatility of the Company’s stock price and expected life of the awards.

2 unchanged sentences

Government Securities Treasury Constant Maturities over the expected term of the equity instrument.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

expected volatility is based on a weighted-average of the implied volatility and the Company’s most recent historical volatility .

The expected volatility is based on a weighted-average of the implied volatility and the Company’s most recent historical volatility.

The following weighted-average assumptions were used in the models to estimate the fair value of stock options at the date of grant:

15 unchanged sentences

There were no unrecognized compensation costs of stock options granted, but not yet vested, as of January 31, 2022.

Stock Appreciation Rights

The Company may grant SAR’s that generally vest over a five year period.

Each vested SAR entitles the holder the right to the differential between the value of the Company’s common share price at the date of exercise and the value of the Company’s common share price at the date of grant.

There were no SAR’s granted during the fiscal years ended January 31, 2021, 2020 and 2019.

The following table summarizes other information related to SAR’s during the years ended January 31, 2021, 2020 and 2019:

Fiscal Year Ended January 31,

Intrinsic value of awards exercised

There were no unrecognized compensation costs of SAR’s granted, but not yet vested, as of January 31, 2021.

Performance Stock Units

1 unchanged sentence

The fair value of the PSU’s awarded during fiscal 2022, 2021 and 2020 equaled the stock price on the date of the grant.

The fair value of the PSU’s awarded during fiscal 2019 was determined using a Monte Carlo simulation.

A Monte Carlo simulation uses assumptions including the risk-free interest rate, expected volatility of the Company’s stock price and expected life of the awards.

A different methodology was used to value fiscal 2021 and 2020 grants due to the removal of certain conditions in the grant provisions.

The Company makes certain estimates about the number of awards that will vest.

Once the Company determines that it is probable that the performance targets will be met, compensation expense is recorded for these awards.

If any of these performance targets are not met, the

If any of these performance targets are not met, the awards are forfeited.

Each PSU is equal to one common share with varying maximum award value limitations.

PSU’s typically vest over a two to five-year period.

URBAN OUTFITTERS, INC.

1 unchanged sentence

(in thousands, except share and per share data)

awards are forfeited.

Each PSU is equal to one common share with varying maximum award value limitations.

PSU’s typically vest over a t wo to five -year period.

The following table summarizes the Company’s PSU activity for the fiscal year ended January 31, 2022:

5 unchanged sentences

The Company may grant RSU’s that vest based on the achievement of specified service conditions.

The fair value of the RSU’s awarded during fiscal 2022, 2021 and 2020 equaled the stock price on the date of the grant.

RSU’s typically vest over a two to five-year period.

10 unchanged sentences

Average cost per share, including commissions

The shares repurchased during fiscal 2021 were prior to the known spread of the COVID-19 pandemic in the United States, which forced the Company to close its stores for an extended period of time.

As discussed in Note 1, “Nature of Business,” the Company temporarily suspended share repurchases during fiscal 2021.

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

1 unchanged sentence

As of January 31, 2022, 23,892,795 common shares were remaining under the programs.

Subsequent to January 31, 2022, the Company repurchased and subsequently retired a total of 1,194,699 common shares for approximately $ 31,802 , at an average price of $ 26.62 per share, including commissions.

In addition to the common shares repurchased under the share repurchase programs, during the fiscal years ended January 31, 2022 and 2021, the Company acquired and subsequently retired 229,082 and 161,335 common shares at a total cost of $ 7,790 and $ 3,876 , respectively, from employees to meet payroll tax withholding requirements.

URBAN OUTFITTERS, INC.

1 unchanged sentence

(in thousands, except share and per share data)

In addition to the common shares repurchased under the share repurchase programs, during the fiscal years ended January 31, 2021 and 2020, the Company acquired and subsequently retired 161,335 and 185,430 common shares at a total cost of $ 3,876 and $ 5,600 , respectively, from employees to meet minimum statutory tax withholding requirements.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

Other Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss

The following tables present the changes in “Accumulated other comprehensive loss,” by component, net of tax, for the fiscal years ended January 31, 2022 and 2021, respectively:

29 unchanged sentences

As of January 31, 2022 and 2021, 60,001 and 470,815 contingently issuable awards, respectively, were excluded from the calculation of diluted net income per common share as they did not meet certain performance criteria.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Commitments and Contingencies

Purchase Commitments

As of January 31, 2021, the Company has commitments for unfulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are satisfied within 12 months, as well as commitments for products and services including information technology contracts, of $ 672,133 .

As of January 31, 2022, the Company has commitments for unfulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are primarily satisfied within 12 months, as well as commitments for products and services including information technology contracts, of $ 941,847 .

The majority of the Company’s merchandise commitments are cancellable with no or limited recourse available to the vendor until the merchandise shipping date.

2 unchanged sentences

Construction and distribution equipment contracts include $ 96,626 related to the omni-channel fulfillment center in Kansas City, Kansas.

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Benefit Plans

2 unchanged sentences

Under the Plan, employees can defer 1 % to 25 % of compensation as defined.

Beginning January 1, 2019, the Company made matching contributions in cash of $ 0.50 per employee contribution dollar on the first 6 % of the employee contribution.

Prior to January 1, 2019, the Company made matching contributions in cash of $ 0.25 per employee contribution dollar on the first 6 % of the employee contribution.

The Company makes matching contributions in cash of $ 0.50 per employee contribution dollar on the first 6 % of the employee contribution.

The employees’ contribution is 100 % vested while the Company’s matching contribution vests at 20 % per year of employee service.

15 unchanged sentences

Amounts due to Faegre Drinker Biddle & Reath LLP as of January 31, 2022 and 2021 were approximately $ 104 and $ 67 , respectively.

Morgenfeld, a director of the Company, is Chief Financial Officer of Pinterest, Inc., which provided digital marketing services to the Company in fiscal 2021 and is expected to continue to do so in the future.

Morgenfeld, a director of the Company, is Chief Financial Officer and Head of Business Operations of Pinterest, Inc., which provided digital marketing services to the Company in fiscal 2022 and 2021 and is expected to continue to do so in the future.

The amount paid to Pinterest, Inc.

9 unchanged sentences

The Company offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands.

The Company operates three reportable segments—“Retail,” “Wholesale” and “Subscription.”

The Company operates three reportable segments—“Retail,” “Wholesale” and “Nuuly.”

The Company’s Retail segment consists of the Anthropologie, Bhldn, Free People, FP Movement, Terrain, Urban Outfitters and Menus & Venues brands.

1 unchanged sentence

The Free People and FP Movement brands make up the Free People Group.

As of January 31, 2021, there were 247 Urban Outfitters stores, 237 Anthropologie Group stores, 149 Free People Group stores, 11 Menus & Venues restaurants and one Urban Outfitters franchisee-owned store.

Each of, Urban Outfitters, the Anthropologie Group and the Free People Group, including their Company-owned and franchisee-owned store and

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

digital channels, and Menus & Venues restaurants, are considered an operating segment.

As of January 31, 2022, there were 261 Urban Outfitters stores, 238 Anthropologie Group stores, 173 Free People Group stores, 10 Menus & Venues restaurants, two Urban Outfitters franchisee-owned stores, and one Anthropologie franchisee-owned store.

Each of, Urban Outfitters, the Anthropologie Group and the Free People Group, including their Company-owned and franchisee-owned store and digital channels, and Menus & Venues restaurants, are considered an operating segment.

Net sales from the Retail segment accounted for approximately 93.4 %, 93.6 % and 91.6 % of total consolidated net sales for fiscal 2022, 2021 and 2020, respectively.

2 unchanged sentences

The Company’s Retail segment omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience.

All available Company-owned Retail segment shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers.

All available Company-owned Retail segment

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

shopping channels are fully integrated, including retail locations , websites, mobile applications, catalogs and customer contact centers.

The Company’s investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the Retail segment omni-channel and not the separate store or digital channels.

6 unchanged sentences

Our Wholesale segment net sales accounted for approximately 5.5 %, 5.7 % and 8.2 % of total consolidated net sales for fiscal 2022, 2021 and 2020, respectively.

The Subscription segment consists of the “Nuuly” brand, which is a monthly women’s apparel subscription rental service that launched on July 30, 2019.

For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party labels and one-of-a-kind vintage pieces via a custom-built, digital platform.

The Nuuly segment, formerly known as the Subscription 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 that launched in July 2019.

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.

Subscribers are also able to purchase the rented product.

Subscription segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2021 and 2020.

Nuuly Thrift, which launched in October 2021, is a peer-to-peer resale marketplace where customers can buy and sell women’s, men’s, and kids’ apparel, shoes, and accessories from any brands.

Sellers on Nuuly Thrift can transfer their earnings to their bank account or convert them to “Nuuly Cash,” a gift card with a bonus, to be used at any of the Company’s brands.

The Company earns a commission based on sales made in the marketplace.

Nuuly segment net sales accounted for approximately 1.1 % of consolidated net sales for fiscal 2022 and less than 1.0 % of consolidated net sales for fiscal 2021 and 2020, respectively.

The Company evaluates the performance of each segment based on the net sales and pre-tax income from operations (excluding intercompany charges) of the segment.

1 unchanged sentence

The principal identifiable assets for the Retail and Wholesale segments are inventory and property and equipment.

The principal identifiable assets for the Subscription segment are rental product and property and equipment.

The principal identifiable assets for the Nuuly segment are rental product and property and equipment.

Other assets are comprised primarily of general corporate assets, which principally consist of cash and cash equivalents, marketable securities, deferred taxes and prepaid expenses, and are typically not allocated to the Company’s segments.

5 unchanged sentences

Wholesale operations

Subscription operations

Nuuly operations

Intersegment elimination

3 unchanged sentences

Wholesale operations

Subscription operations

Nuuly operations

Intersegment elimination

9 unchanged sentences

Wholesale operations

Subscription operations

Nuuly operations

Total depreciation expense for property and equipment

3 unchanged sentences

Rental product, net (1)

Subscription operations

Nuuly operations

Total rental product, net

3 unchanged sentences

Wholesale operations

Subscription operations

Nuuly operations

Total property and equipment, net

2 unchanged sentences

Wholesale operations

Subscription operations

Nuuly operations

Total cash paid for property and equipment

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

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

7 unchanged sentences

(3) Accessories includes footwear, jewelry and handbags

(4) Other includes beauty, shipping and handling, the Menus & Venues brand and the Subscription segment

(4) Other includes beauty, shipping and handling, the Menus & Venues brand and the Nuuly segment

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

Apparel, Home, and Accessories are sold through both the Retail and Wholesale segments.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures