UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
For the Quarterly Period Ended
OR
For the transition period from to
Commission File No.
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common shares, $0.0001 par value—
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
Item 1. |
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Condensed Consolidated Balance Sheets as of April 30, 2023, January 31, 2023 and April 30, 2022 |
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Condensed Consolidated Statements of Income for the three months ended April 30, 2023 and 2022 |
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Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2023 and 2022 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II OTHER INFORMATION |
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Item 1. |
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Item 1A. |
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Item 6. |
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
URBAN OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(unaudited)
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April 30, |
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January 31, |
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April 30, |
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2023 |
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2023 |
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2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net of allowance for doubtful accounts of |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Marketable securities |
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Deferred income taxes and other assets |
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Total Assets |
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$ |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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$ |
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Current portion of operating lease liabilities |
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Accrued expenses, accrued compensation and other current liabilities |
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Total current liabilities |
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Non-current portion of operating lease liabilities |
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Deferred rent and other liabilities |
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Total Liabilities |
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(see Note 11) |
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Shareholders’ equity: |
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Preferred shares; $ |
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Common shares; $ |
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Additional paid-in-capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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Total Shareholders’ Equity |
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Total Liabilities and Shareholders’ Equity |
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$ |
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$ |
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$ |
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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)
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Three Months Ended |
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April 30, |
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2023 |
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2022 |
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Net sales |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expenses |
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Income from operations |
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Other income (loss), net |
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Income before income taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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Net income per common share: |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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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)
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Three Months Ended |
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April 30, |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation |
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Change in unrealized gains (losses) on marketable securities, net of tax |
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Total other comprehensive income (loss) |
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Comprehensive income |
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$ |
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$ |
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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)
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Accumulated |
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Common Shares |
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Additional |
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Other |
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Number of |
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Par |
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Paid-in |
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Retained |
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Comprehensive |
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Shares |
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Value |
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Capital |
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Earnings |
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Loss |
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Total |
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Balances as of January 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Comprehensive income |
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— |
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— |
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— |
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Share-based compensation |
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— |
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— |
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Share-based awards |
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— |
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— |
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— |
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— |
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— |
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Share repurchases |
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— |
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— |
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— |
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Balances as of April 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Accumulated |
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Common Shares |
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Additional |
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Other |
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Number of |
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Par |
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Paid-in |
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Retained |
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Comprehensive |
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Shares |
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Value |
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Capital |
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Earnings |
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Loss |
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Total |
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Balances as of January 31, 2022 |
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$ |
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$ |
— |
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$ |
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$ |
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$ |
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Comprehensive income |
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— |
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— |
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Share-based compensation |
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— |
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Share-based awards |
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— |
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Share repurchases |
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— |
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Balances as of April 30, 2022 |
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$ |
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$ |
— |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
URBAN OUTFITTERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
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Three Months Ended |
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April 30, |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Non-cash lease expense |
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Provision for deferred income taxes |
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Share-based compensation expense |
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Amortization of tax credit investment |
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Loss on disposition of property and equipment, net |
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Changes in assets and liabilities: |
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Receivables |
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Inventory |
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Prepaid expenses and other assets |
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Payables, accrued expenses and other liabilities |
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Operating lease liabilities |
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Net cash provided by (used in) operating activities |
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Cash flows from investing activities: |
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Cash paid for property and equipment |
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Cash paid for marketable securities |
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Sales and maturities of marketable securities |
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Initial cash payment for tax credit investment |
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Net cash (used in) provided by investing activities |
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Cash flows from financing activities: |
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Share repurchases related to share repurchase program |
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Share repurchases related to taxes for share-based awards |
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Tax credit investment liability payments |
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Net cash used in financing activities |
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Effect of exchange rate changes on cash and cash equivalents |
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Decrease in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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Supplemental cash flow information: |
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Cash paid during the year for income taxes |
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$ |
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Non-cash investing activities—Accrued capital expenditures |
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$ |
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$ |
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Right-of-use assets obtained in exchange for operating lease liabilities |
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$ |
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$ |
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Non-cash investing activities—Accrued tax credit investment installments |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
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, 2023, filed with the United States Securities and Exchange Commission on April 3, 2023.
The Company’s business experiences seasonal fluctuations in net sales and net income, with a more significant portion typically realized in the second half of each year predominantly due to the year-end holiday period. Historically, and consistent with the retail industry, this seasonality also impacts our working capital requirements, particularly with regard to inventory. Accordingly, the results of operations for the three months ended April 30, 2023 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 2024 will end on January 31, 2024.
Recent Accounting Pronouncements
The Company has considered all new accounting standards updates issued by the Financial Accounting Standards Board (“FASB”) and has concluded that there are no recent accounting standard updates that will have a material impact on its consolidated financial statements and related disclosures.
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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, debit card and alternative payment method transactions throughout all segments and sales to the Company’s Wholesale segment customers and franchisees. For the three month period ended April 30, 2023, the opening and closing balances of contract receivables, net of allowance for doubtful accounts, were $
Contract liabilities represent unearned revenue and result from the Company receiving consideration in a contract with a customer for which it has not satisfied all of its performance obligations. The Company’s contract liabilities result from customer deposits, customer loyalty programs and the issuance of gift cards. Gift cards are expected to be redeemed within
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3. Marketable Securities
During all periods shown, marketable securities are classified as available-for-sale.
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Amortized |
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Unrealized |
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Unrealized |
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Fair |
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Cost |
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Gains |
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(Losses) |
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Value |
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As of April 30, 2023 |
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Short-term Investments: |
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Corporate bonds |
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$ |
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Municipal and pre-refunded municipal bonds |
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Commercial paper |
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