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, 2024

OR

☐ 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—92,260,283 shares outstanding on September 3, 2024.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of July 31, 2024, January 31, 2024 and July 31, 2023	1
	Condensed Consolidated Statements of Income for the three and six months ended July 31, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 31, 2024 and 2023	3
	Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended July 31, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2024 and 2023	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	29
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and the Use of Proceeds	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
	Signatures	32

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,
	2024			2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	209,129		$	178,321		$	224,744
Marketable securities		352,360			286,744			250,832
Accounts receivable, net of allowance for doubtful accounts of    $1,429, $1,465 and $1,481, respectively		78,749			67,008			79,118
Inventory		604,667			550,242			586,514
Prepaid expenses and other current assets		228,966			200,188			224,254
Total current assets		1,473,871			1,282,503			1,365,462
Property and equipment, net		1,314,923			1,286,541			1,222,343
Operating lease right-of-use assets		941,404			920,396			961,458
Marketable securities		209,469			314,152			122,356
Other assets		319,156			307,617			298,317
Total Assets	$	4,258,823		$	4,111,209		$	3,969,936
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	299,351		$	253,342		$	270,464
Current portion of operating lease liabilities		227,987			226,645			227,669
Accrued expenses, accrued compensation and other current liabilities		483,080			514,218			459,343
Total current liabilities		1,010,418			994,205			957,476
Non-current portion of operating lease liabilities		875,174			851,853			882,841
Other non-current liabilities		131,798			152,611			162,228
Total Liabilities		2,017,390			1,998,669			2,002,545
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,    92,260,283, 92,787,522 and 92,773,249 shares issued and    outstanding, respectively		9			9			9
Additional paid-in-capital		—			37,943			23,214
Retained earnings		2,279,856			2,113,735			1,982,970
Accumulated other comprehensive loss		(38,432	)		(39,147	)		(38,802	)
Total Shareholders’ Equity		2,241,433			2,112,540			1,967,391
Total Liabilities and Shareholders’ Equity	$	4,258,823		$	4,111,209		$	3,969,936

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

1

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,
	2024		2023		2024		2023
Net sales	$	1,351,959	$	1,272,195	$	2,552,691	$	2,385,869
Cost of sales (excluding store impairment and lease abandonment charges)		858,674		816,614		1,646,420		1,559,057
Store impairment and lease abandonment charges		—		—		4,601		—
Gross profit		493,285		455,581		901,670		826,812
Selling, general and administrative expenses		348,150		323,483		681,911		623,331
Income from operations		145,135		132,098		219,759		203,481
Other income, net		7,429		3,399		13,675		4,418
Income before income taxes		152,564		135,497		233,434		207,899
Income tax expense		35,079		31,405		54,184		50,990
Net income	$	117,485	$	104,092	$	179,250	$	156,909
Net income per common share:
Basic	$	1.26	$	1.12	$	1.93	$	1.69
Diluted	$	1.24	$	1.10	$	1.89	$	1.67
Weighted-average common shares outstanding:
Basic		93,071,401		92,741,888		93,097,694		92,610,499
Diluted		94,684,003		94,228,185		94,842,065		94,026,950

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

2

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands)

(unaudited)

	Three Months Ended				Six Months Ended
	July 31,				July 31,
	2024		2023		2024		2023
Net income	$	117,485	$	104,092	$	179,250	$	156,909
Other comprehensive income:
Foreign currency translation		3,760		4,515		462		7,692
Change in unrealized gains on marketable securities, net of tax		2,555		21		253		2,141
Total other comprehensive income		6,315		4,536		715		9,833
Comprehensive income	$	123,800	$	108,628	$	179,965	$	166,742

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

3

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, 2024		93,379,211		$	9	$	31,572		$	2,175,500		$	(44,747	)	$	2,162,334
Comprehensive income		—			—		—			117,485			6,315			123,800
Share-based compensation		—			—		7,957			—			—			7,957
Share-based awards		93,666			—		376			—			—			376
Share repurchases, inclusive of excise tax		(1,212,594	)		—		(39,905	)		(13,129	)		—			(53,034	)
Balances as of July 31, 2024		92,260,283		$	9	$	—		$	2,279,856		$	(38,432	)	$	2,241,433

											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

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

4

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, 2024		92,787,522		$	9	$	37,943		$	2,113,735		$	(39,147	)	$	2,112,540
Comprehensive income		—			—		—			179,250			715			179,965
Share-based compensation		—			—		15,556			—			—			15,556
Share-based awards		1,028,200			—		851			—			—			851
Share repurchases, inclusive of excise tax		(1,555,439	)		—		(54,350	)		(13,129	)		—			(67,479	)
Balances as of July 31, 2024		92,260,283		$	9	$	—		$	2,279,856		$	(38,432	)	$	2,241,433

											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

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

5

URBAN OUTFITTERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

	Six Months Ended
	July 31,
	2024			2023
Cash flows from operating activities:
Net income	$	179,250		$	156,909
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		56,552			47,471
Non-cash lease expense		103,146			101,277
Provision for deferred income taxes		9,208			526
Share-based compensation expense		15,556			15,556
Amortization of tax credit investment		8,760			7,953
Store impairment and lease abandonment charges		4,601			—
Loss on disposition of property and equipment, net		420			146
Changes in assets and liabilities:
Receivables		(11,606	)		(8,160	)
Inventory		(54,050	)		3,299
Prepaid expenses and other assets		(48,318	)		(48,256	)
Payables, accrued expenses and other liabilities		16,858			54,573
Operating lease liabilities		(116,563	)		(120,047	)
Net cash provided by operating activities		163,814			211,247
Cash flows from investing activities:
Cash paid for property and equipment		(98,854	)		(78,517	)
Cash paid for marketable securities		(166,428	)		(229,446	)
Sales and maturities of marketable securities		204,145			149,921
Initial cash payment for tax credit investment		—			(20,000	)
Net cash used in investing activities		(61,137	)		(178,042	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		851			594
Share repurchases related to share repurchase program		(52,262	)		—
Share repurchases related to taxes for share-based awards		(14,977	)		(8,184	)
Tax credit investment liability payments		(2,713	)		(1,724	)
Net cash used in financing activities		(69,101	)		(9,314	)
Effect of exchange rate changes on cash and cash equivalents		(2,768	)		(407	)
Increase in cash and cash equivalents		30,808			23,484
Cash and cash equivalents at beginning of period		178,321			201,260
Cash and cash equivalents at end of period	$	209,129		$	224,744
Supplemental cash flow information:
Cash paid during the year for income taxes	$	39,763		$	24,801
Non-cash investing activities—Accrued capital expenditures	$	17,641		$	16,011
Right-of-use assets obtained in exchange for operating lease liabilities	$	148,099		$	113,184
Non-cash investing activities—Accrued tax credit investment installments	$	—		$	62,120

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

6

URBAN OUTFITTERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed financial statements should be read in conjunction with Urban Outfitters, Inc.’s (the “Company’s”) Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the United States Securities and Exchange Commission on April 1, 2024.

The Company’s 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. Historically, and consistent with the retail industry, this seasonality also impacts our working capital requirements, particularly with regard to inventory. Accordingly, the results of operations for the three and six months ended July 31, 2024 are not necessarily indicative of the results to be expected for the full year.

The Company’s fiscal year ends on January 31. All references in these notes to the Company’s fiscal years refer to the fiscal years ended on January 31 in those years. For example, the Company’s fiscal year 2025 will end on January 31, 2025.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which includes amendments that further enhance income tax disclosures. The update requires disaggregated information about an entity's effective tax rate reconciliation and income taxes paid by jurisdiction, among other changes. The update will be effective for the Company in its annual consolidated financial statements for the fiscal year ending January 31, 2026, and can be applied prospectively or retrospectively. The Company is currently assessing this update and the additional disclosures that will be required within the notes to its consolidated financial statements.

In November 2023, the FASB issued an accounting standards update that introduces additional segment disclosure requirements. The update requires entities to quantitatively disclose significant segment expenses that are regularly provided to the chief operating decision maker for each reportable segment as well as an amount for other segment items for each reportable segment and a description of their composition. Entities are also required to disclose how reported measures of segment profit or loss are used in assessing segment performance and deciding how to allocate resources. The update will be effective for the Company in its annual consolidated financial statements for the fiscal year ending January 31, 2025, and interim periods thereafter. The Company is currently assessing this update and expects adoption of this update to result in additional disclosures in the notes to its consolidated financial statements. The update will be applied retrospectively to all prior periods presented.

2. Revenue from Contracts with Customers

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 the Company's wholesale segment customers and franchisees. For the six month period ended July 31, 2024, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $67,008 and $78,749, respectively. For the six month period ended July 31, 2023, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $70,339 and $79,118, respectively. Contract receivables are included in “Accounts receivable, net of allowance for doubtful accounts” in the Condensed Consolidated Balance Sheets.

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

7

liabilities result from the issuance of gift cards, customer deposits, Nuuly Rent deferred subscription fee revenue and customer loyalty programs. Gift cards are expected to be redeemed within two years of issuance, with the majority of redemptions occurring in the first year. For the six month period ended July 31, 2024, the opening and closing balances of contract liabilities were $91,408 and $86,160, respectively. For the six month period ended July 31, 2023, the opening and closing balances of contract liabilities were $82,867 and $73,065, respectively. Contract liabilities are included in “Accrued expenses, accrued compensation and other current liabilities” in the Condensed Consolidated Balance Sheets. During the six month period ended July 31, 2024, the Company recognized $37,981 of revenue that was included in the contract liability balance at the beginning of the period. During the six month period ended July 31, 2023, the Company recognized $27,085 of revenue that was included in the contract liability balance at the beginning of the period.

3. Marketable Securities

During all periods shown, marketable securities are classified as available-for-sale. The amortized cost, gross unrealized gains (losses) and fair value of available-for-sale securities by major security type and class of security as of July 31, 2024, January 31, 2024 and July 31, 2023 were as follows:

	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
As of July 31, 2024
Short-term Investments:
Corporate bonds	$	179,538	$	26	$	(567	)	$	178,997
Federal government agencies		73,850		7		(115	)		73,742
US Treasury securities		29,150		—		(59	)		29,091
Municipal and pre-refunded municipal bonds		47,174		17		(65	)		47,126
Certificates of deposit		20,499		—		—			20,499
Commercial paper		2,905		—		—			2,905
		353,116		50		(806	)		352,360
Long-term Investments:
Corporate bonds		79,873		147		(87	)		79,933
Federal government agencies		35,635		7		(105	)		35,537
US Treasury securities		49,951		200		(45	)		50,106
Municipal and pre-refunded municipal bonds		25,250		19		(69	)		25,200
Certificates of deposit		1,000		—		—			1,000
Mutual funds, held in rabbi trust		16,011		1,682		—			17,693
		207,720		2,055		(306	)		209,469
	$	560,836	$	2,105	$	(1,112	)	$	561,829
As of January 31, 2024
Short-term Investments:
Corporate bonds	$	123,418	$	27	$	(883	)	$	122,562
Federal government agencies		68,730		35		(94	)		68,671
US Treasury securities		27,231		—		(36	)		27,195
Municipal and pre-refunded municipal bonds		47,915		9		(414	)		47,510
Certificates of deposit		10,249		—		—