UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

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

                   For the Fiscal year ended January 31, 1999

                           Commission File No. 0-16999

                             URBAN OUTFITTERS, INC.
             (Exact name of registrant as specified in its charter)


      PENNSYLVANIA                                      23-2003332
- ------------------------                   ------------------------------------
(State of incorporation)                   (I.R.S. Employer Identification No.)


                   1809 Walnut Street, Philadelphia, PA 19103
                   ------------------------------------------
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (215) 564-2313
                                                           --------------

        Securities registered pursuant to Section 12(b) of the Act: None

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

                         Common Shares, $.0001 par value
                         -------------------------------
                                (Title of class)


     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 [x/] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

           17,377,541 Common Shares were outstanding at April 10, 1999

     The aggregate market value of voting shares held by non-affiliates at April
10, 1999 was $163,563,137

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement for Registrant's 1999 Annual Meeting of
Shareholders -- Part III.





<PAGE>

                                TABLE OF CONTENTS



                                     PART I


<TABLE>

<S>               <C>                                                                          <C>

Item 1.           Business....................................................................  3


Item 2.           Properties................................................................... 7


Item 3.           Legal Proceedings........................................................... 10


Item 4.           Submission of Matters to a Vote of Security Holders......................... 10



                                             PART II


Item 5.           Market for Registrant's Common Equity and Related Shareholder Matters....... 11


Item 6.           Selected Financial Data..................................................... 13


Item 7.           Management's Discussion and Analysis of Financial Condition and
                  Results of Operations....................................................... 14


Item 8.           Financial Statements and Supplementary Data................................. 23


Item 9.           Changes in and Disagreements with Accountants on Accounting and
                  Financial Disclosure........................................................ 23



                                            PART III


Item 10.          Directors and Executive Officers of the Registrant.......................... 24


Item 11.          Executive Compensation...................................................... 26


Item 12.          Security Ownership of Certain Beneficial Owners and Management.............. 26


Item 13.          Certain Relationships and Related Transactions.............................. 26



                                             PART IV


Item 14.          Exhibits, Financial Statement Schedules and Reports on Form 8-K ............ 27


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS....................................................F-1

FINANCIAL STATEMENT SCHEDULES.................................................................S-1

</TABLE>


                             ---------------------

As used in this Report on Form 10-K, "Fiscal 1994," "Fiscal 1995," "Fiscal
1996," "Fiscal 1997" and "Fiscal 1998" refer to the Company's Fiscal years ended
January 31 in each of those Fiscal years.




<PAGE>


                                     PART I


Item 1. Business

General

     Urban Outfitters, Inc. ("Urban Outfitters" or the "Company") operates two
business segments - a lifestyle-oriented general merchandise retailing segment
and a wholesale apparel business ("Wholesale"). The retailing segment operates
through retail stores and through direct response, including a catalog and a
website. The two retail concepts are Urban Outfitters ("Urban Retail") and
Anthropologie each of which sells a broad array of fashion apparel, accessories
and household and gift merchandise in an exciting and dynamic retail
environment. The Company's wholesale subsidiary ("Wholesale") designs and
markets young women's casual wear which it provides to the Company's retail
operations and sells to over 1,300 better specialty stores worldwide.

     Founded and originally operated by a predecessor partnership, the Company
opened its first store in 1970 near the University of Pennsylvania campus in
Philadelphia. The Company was incorporated in Pennsylvania in 1976, and opened
its second store in Harvard Square, Cambridge, Massachusetts in 1980. The
Company has since expanded to 34 Urban Retail stores in 25 metropolitan areas
throughout the United States, in Canada and in the British Isles. The Company
has opened 14 Anthropologie stores in 13 metropolitan areas in the United
States, most of which overlap the Urban Retail areas. The Company is in the
process of identifying new retail locations, negotiating new leases and planning
to accelerate its rate of new store openings in the coming years.

     Urban Retail: Urban Retail has established a strong reputation among urban,
style-conscious young adults aged 18 to 30. Urban Retail stores, which average
approximately 9,500 net selling square feet and carry 50,000 to 60,000 SKUs, are
typically located near large universities or other youth enclaves. A smaller
format store has been developed that averages 6,000 net selling square feet, and
carries somewhat fewer SKUs. The first store in this new format was opened in
March, 1998 in Bloomington, Indiana. The Company's lifestyle merchandise
offerings include women's and men's fashion apparel, footwear and accessories
and apartment wares and gifts. Urban Retail accounted for approximately 67.7%,
64.4% and 69.3% of the Company's net sales in Fiscal 1999, Fiscal 1998 and
Fiscal 1997, respectively.

     Anthropologie: Anthropologie, the Company's second retail format, mirrors
Urban Retail but tailors its merchandise and shopping environment to appeal to
an older, more established suburban customer, typically women aged 25 to 45. The
Company opened its first Anthropologie store in a suburb of Philadelphia in
October 1992. Anthropologie stores average approximately 8,200 net selling
square feet and carry 20,000 to 25,000 SKUs with a greater emphasis on home. The
stores are typically located in affluent suburban locations. A few very special
urban locations, such as Soho in New York City, will be part of the mix. Product
offerings include women's casual apparel

                                       3

<PAGE>

and accessories, home furnishings and an eclectic array of gifts and decorative
accessories for the home, garden, bed and bath. Anthropologie introduced a
direct response catalog in March, 1998. After evaluation of the initial test
results, the catalog mailings were expanded in the back half of the fiscal year.
The Company began accepting orders through its www.Anthropologie.com Internet
web site in December, 1998. Anthropologie accounted for approximately 22.8%,
18.0% and 12.6% of the Company's net sales in Fiscal 1999, Fiscal 1998 and
Fiscal 1997, respectively.

     Wholesale: Wholesale was established in 1984 to develop, side by side with
Urban Retail, apparel lines of young women's casual wear that could be
effectively sold in the Urban Retail stores at attractive pricing to the retail
customers. In order to provide the "attractive" prices, minimum production lots
are necessary. In order to reach these production minimums, Wholesale sells to
other retailers throughout the United States. The Wholesale design and
production staffs have expanded their involvement by designing and producing
private label merchandise categories such as apartment wares, gifts, accessories
and shoes.

     While continuing its role with Urban Retail and Anthropologie, Wholesale
also sells its products to over 1,300 better specialty stores worldwide under
three major labels: Free People, Co-Operative, and Bulldog. Wholesale accounted
for approximately 9.5%, 17.6% and 18.1% of the Company's net sales in Fiscal
1999, Fiscal 1998 and Fiscal 1997, respectively. Like Anthropologie and Urban
Retail, Wholesale has its own senior and creative management, while sharing
support services.

     The Company's home offices are in Philadelphia, Pennsylvania and occupy
approximately 25,000 square feet at 1809 Walnut Street, adjacent to the retail
store at 1801 Walnut Street, and approximately 22,000 square feet at 235 South
17th Street.


Retail Strategy

     The Company's overall retailing strategy is to concentrate on its target
customers and offer a wide assortment of distinctive products in a compelling
shopping environment. By executing this strategy, the Company believes that it
has successfully captured and developed unique market niches.

                                       4

<PAGE>

Suppliers

     To serve its target customers and to recognize changes in fashion trends
and seasonality, the Company purchases merchandise from numerous vendors -
foreign and domestic. During Fiscal 1999, the Company did business with
approximately 2,500 vendors. No single vendor accounted for more than 10% of
merchandise purchases. Certain of the Company's vendors have limited financial
resources and production capabilities. The Company believes that its
relationships with its vendors are good.


Store Expansion Strategy

     The Company strategy is to open at least five new stores each year for both
retail concepts. In Fiscal 1999, Urban Retail opened six new stores, including
the Company's first store in London, while Anthropologie opened five. The Fiscal
2000 plan anticipates six Urban Retail stores and five Anthropologie store
openings.


Company Operations

     Distribution: In October 1996, the Company completed construction and
occupied its new 100,000-square-foot distribution center. The majority of
merchandise purchased by Urban Retail, Anthropologie, and Wholesale is shipped
directly to this facility. The facility is owned by the Company and is
approximately 60 miles from the home office in Philadelphia. The facility has an
advanced computerized materials handling system and will be expanded in Fiscal
2000 by 85,000 square feet in order to serve the future needs of the growing
retail network and direct response fulfillment. The 185,000-square-foot
structure is expected to provide distribution capability through the year 2002.
The Anthropologie catalog and Internet direct response orders and fulfillment
are currently handled by third party processors.

     In June 1998, the Company opened a distribution facility in Reno, Nevada
operated by a third party. The purpose of this facility is to service the west
coast stores with a faster turn around from West Coast vendors at a lower
freight cost per unit. The Company currently uses third-party distribution in
Canada. As additional stores are added in Europe, a separate third-party
distribution center may be established.

                                       5

<PAGE>

     Management Information Systems: Very early in the Company's growth,
management recognized the need for high-quality information in order to manage
the merchandise planning/buying, inventory management and control functions. The
Company invested in a retail software package that it believes continues to meet
its processing and reporting requirements. The Company utilizes Point of Sale
("POS") register and polling systems which provide for register efficiencies,
improved customer checkout and overnight polling. A discussion of the Company's
Year 2000 readiness can be found in Management's Discussion and Analysis on Page
17.

     To manage its separate needs, Wholesale uses a software system for customer
service, order entry and allocations, production planning and inventory
management.

     The Company is in the process of converting its Anthropologie direct
response orders from third party call centers and fulfillment to an "in-house"
catalog management system which is scheduled to begin accepting orders with the
Fall catalog mailings.

     Inventory and Shrinkage Control: The Company's inventory management system
enables it to efficiently manage its inventory position. This system provides
management with accurate and timely information about inventory, pricing,
costing, markdowns, markups, transfers, damages, sales and perpetual inventory
levels. The system allows these items to be monitored by SKU, by location and by
day.

     The Company believes in investing to control its shrinkage levels because
many store locations are in typically higher theft areas. Merchandise shrinkage
control begins at the distribution center with the Company's information
systems, internal employee procedures, electronic article surveillance systems
and self-auditing controls. The Company educates and incentivizes store
employees to actively participate in loss prevention, and believes that its
store employees are its most effective deterrent to both internal and external
theft.


Competition

     The specialty retail and wholesale apparel businesses are highly
competitive. Retail competitive factors include store location; merchandise
breadth, quality, style, and availability; level of customer service; and price.
The Company's retail stores compete against a wide variety of smaller,
independent specialty stores as well as department stores and national specialty
chains. Wholesale competes with numerous companies, many of whose products have
wider distribution than the Company's. Certain of Urban Outfitters' retail and
wholesale competitors have greater name recognition and financial and other
resources than the Company.

                                       6

<PAGE>

Trademarks and Service Marks

     The Company is the registered owner in the United States of certain service
marks and trademarks (collectively "marks"), including without limitation,
"Urban Outfitters," "Anthropologie," "Ecote," "Co-Operative," "Urban Renewal,"
"Free People," "R.V.," "Slant," "Big Smokey," "Fink," "Lisa L.," "Lip Gloss,"
and "Shag." Each mark is renewable indefinitely, contingent upon continued use
at the time of renewal.

     In addition, the Company currently has pending registration applications
with the U.S. Patent and Trademark Office covering certain other marks. The
Company is also the owner of marks which have been registered in foreign
countries, including without limitation, Argentina, Australia, Benelux, Brazil,
Canada, Chile, the Czech Republic, Denmark, France, Germany, Hong Kong, Italy,
Japan, Mexico, Poland, Russia, Spain, Sweden, Switzerland, Taiwan and the UK.
Applications for marks are pending in various foreign countries as well.

     The Company regards its marks as important to its business due to their
name recognition with the Company's customers. The Company believes that the
marks are so important that in order to protect them from infringement and to
defend against any claim of infringement, the Company established a separate
company whose primary purpose is to maintain and manage those and future marks
thereby increasing their value to the operating companies. The Company is not
aware of any claims of infringement or challenges to the Company's right to use
any of its marks in the United States; however, there can be no assurance that
the Company's marks do not or will not violate the proprietary rights of others,
that they would be upheld if challenged or that the Company would, in such an
event, not be prevented from using its marks, any of which could have an adverse
effect on the Company.

Employees

     The Company employs approximately 1,750 persons, 1,144 (65%) of whom are
full-time employees and 606 (35%) of whom are part-time employees. Of the
Company's total employees, 1,677 (96%) work at the retail segment, and 73 (4%)
work at Wholesale. The number of part-time employees fluctuates depending on
seasonal needs. None of the Company's employees are covered by collective
bargaining agreements and management believes that the Company's relations with
its employees are excellent.



I
tem 2. Properties

     The Company's home offices are located in Philadelphia at 1809 Walnut
Street, immediately adjacent to the retail store at 1801 Walnut Street. In March
1999, an additional near-by office facility was leased at 235 South 17th Street.

                                       7

<PAGE>

     All of the Urban Retail and Anthropologie stores are leased. The Company's
retail stores are typically leased for a term of ten years with renewal options
for an additional five to ten years. The following table shows the location of
the Company's existing retail stores. Net selling square feet can sometimes
change due to floor moves, use of staircases, cash register configuration, etc.
Total estimated net selling square feet under lease at January 31, 1999 by Urban
Retail was 304,000 and by Anthropologie was 115,000. The average store net
selling square feet is approximately 9,500 for Urban Retail and approximately
8,200 for Anthropologie. The new smaller format Urban Retail stores are expected
to average 6,000 net selling square feet. The Bloomington store contains 5,100
net selling square feet.

                                       8

<PAGE>

                             Urban Outfitters Stores


<TABLE>
<CAPTION>

LOCATION                              LOCATION                                              LOCATION

- ------------------------------------- ----------------------------- --------------------------------
<S>                                   <C>                                          <C>
Philadelphia, PA                      San Francisco, CA                              Bloomington, IN
110 South 36th Street                 80 Powell Street                 530 E. Kirkwood Ave., Box 101

Cambridge, MA                         Costa Mesa, CA                                    Columbus, OH
11 J.F. Kennedy Street                2930 Bristol Street                        1782 N. High Street

Philadelphia, PA                      Chicago. IL                                       New York, NY
1801 Walnut Street                    2352 N. Clark Street                            162 2nd Avenue

New York, NY                          Pasadena, CA                                   Los Angeles, CA
628 Broadway                          139 W. Colorado Blvd.                      7650 Melrose Avenue

Washington, DC                        Chicago, IL                                     Burlington, VT
3111 M Street, N.W.                   935 N. Rush Street                            81 Church Street

New York, NY                          Portland, OR                                   London, England
374 Avenue of Americas                2320 N.W. Westover Road           36-38 Kensington High Street

Madison, WI                           Austin, TX
604 State Street                      2406 Guadalupe Street

Ann Arbor, MI                         Tempe, AZ
231 S. State Street                   545 South Mill Ave.

Boston, MA                            Houston, TX
361 Newbury Street                    2501 University Blvd.

Minneapolis, MN                       Montreal, PQ
3006 Hennepin Ave., S.                1246 Ste. Catherine Street, W.

New York, NY                          Toronto, ON
127 East 59th Street                  235 Yonge Street

Seattle, WA                           Miami Beach, FL
401 Broadway, East                    653 Collins Avenue

Berkeley, CA                          San Diego, CA
2590 Bancroft Way                     665 Fifth Avenue

Santa Monica, CA                      Boulder, CO
1440 Third Street Promenade           934 Pearl Street

</TABLE>


                                       9

<PAGE>

                              Anthropologie Stores


LOCATION                                LOCATION

- ----------------------------   -----------------------------  
Wayne, PA                      Chicago, IL
201 W. Lancaster Ave.          1120 N. State Street

Rockville, MD                  Highland Park, IL
11500 Rockville Pike           1780 Green Bay Road

Westport, CT                   Beverly Hills, CA
1365 Post Road, East           320 N. Beverly Drive

Greenvale, NY                  Seattle, WA
9 Northern Blvd.               2520 NE University Village, #120

SoHo, NY                       Santa Barbara, CA
375 West Broadway              901 State Street

Newport Beach, CA              Birmingham, MI
823 Newport Center Drive       214 West Maple Road

Santa Monica, CA               Boston, MA
1402 Third Street Promenade    799 Boylston Street


     Wholesale's showroom in New York City is leased through July 31, 2004.
Retail and Wholesale distribution center properties are discussed in the
Distribution section on page 5.

     The Company believes that its facilities are well-maintained, in good
operating condition and adequate for its current needs.



Item 3. Legal Proceedings

     None.



Item 4. Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of security holders during the fourth
quarter of the Fiscal year ended January 31, 1999, through the solicitation of
proxies or otherwise.

Executive Officers of the Registrant

     The information concerning the Company's executive officers required by
this Item is incorporated by reference herein to Part III, Item 10 of this Form
10-K.

                                       10

<PAGE>


                                     PART II


Item 5. Market for Registrant's Common Equity and Related Shareholder Matters

     The Company's common shares are traded on the NASDAQ National Market System
under the symbol "URBN."


Market Information
                                                   Market Prices ($)*
                                            High Bid                 Low Bid
                                             Price                    Price
                                            --------                 -------
Fiscal 1997

Quarter ended April 30, 1996                16 15/16                  12
Quarter ended July 31, 1996                 27 3/8                    14 3/4
Quarter ended October 31, 1996              24 3/4                    13 5/8
Quarter ended January 31, 1997              17                        10 1/2


Fiscal 1998

Quarter ended April 30, 1997                14                        10 1/2
Quarter ended July 31, 1997                 18 1/2                    12
Quarter ended October 31, 1997              19 3/4                    15 1/8
Quarter ended January 31, 1998              19                        14 1/2


Fiscal 1999

Quarter ended April 30, 1998                24 3/4                    15 3/4
Quarter ended July 31, 1998                 20                        14 1/2
Quarter ended October 31, 1998              17                        11
Quarter ended January 31, 1999              18                        11 9/16


                                         *Post June 1, 1996 2-for-1 stock split

                                       11

<PAGE>

Holders

     On April 2, 1999, the Company had approximately 1,800 shareholders.


Dividends

     The Company has not paid any cash dividends since its inception and does
not anticipate paying any cash dividends on its common shares in the foreseeable
future.

                                       12


<PAGE>


Item 6. Selected Financial Data

     The following table sets forth selected consolidated income statement and
balance sheet data for the periods indicated. The selected consolidated balance
sheet and income statement data at the fiscal year end for each of the five
fiscal years presented below, are derived from the consolidated financial
statements of the Company. The data presented below should be read in
conjunction with the consolidated financial statements of the Company, including
the related notes thereto, included elsewhere in this document.


<TABLE>
<CAPTION>

                                                                      Fiscal Year Ended January 31,
                                                  -------------------------------------------------------------------
                                                      1999         1998          1997          1996          1995
                                                  -----------   -----------   -----------   -----------   -----------
                                                              (In thousands, except share and per share data)
Income Statement Data:
<S>                                               <C>           <C>           <C>           <C>           <C>        
Net sales .....................................   $   208,969   $   173,121   $   156,414   $   133,036   $   110,121
Gross profit ..................................        79,344        60,562        57,087        49,158        42,866
Income from operations ........................        25,117        22,062        21,356        19,867        17,576
Net income ....................................   $    15,760   $    13,880   $    13,260   $    12,308   $    10,817
                                                  ===========   ===========   ===========   ===========   ===========
Net income per common share ...................   $     0 .89   $      0.79   $      0.76   $      0.72   $      0.64
                                                  ===========   ===========   ===========   ===========   ===========
Weighted average common shares outstanding ....    17,702,922    17,576,203    17,429,375    17,028,856    16,790,740
Net income per common share -
  assuming dilution ...........................   $      0.88   $      0.78   $      0.75   $      0.70   $      0.62
                                                  ===========   ===========   ===========   ===========   ===========
Weighted average common shares outstanding -
  assuming dilution ...........................    17,929,109    17,843,873    17,722,629    17,487,673    17,407,608

Balance Sheet Data:
Working capital ...............................   $    47,527   $    52,133   $    39,239   $    36,487   $    26,872
Total assets ..................................       133,363       107,424        89,675        71,117        56,766
Total liabilities .............................        28,069        16,766        13,983        11,665        10,015
Long-term debt, excluding current maturities ..          --            --            --            --            --
Total shareholders' equity ....................       105,294        90,658        75,692        59,452        46,751

</TABLE>


                                       13

<PAGE>


Item 7. Management's Discussion and Analysis
        of Financial Condition and Results of Operations

     The following discussion of the Company's historical results of operations
and of its liquidity and capital resources should be read in conjunction with
the selected financial data and the consolidated financial statements of the
Company and related notes thereto appearing elsewhere in this Form 10-K.

General

     The Company's fiscal year ends on January 31. All references in this
discussion to fiscal years of the Company refer to the fiscal years ended on
January 31 in those years. For example, the Company's "Fiscal 1999" ended on
January 31, 1999. The comparable store net sales data presented in this
discussion are calculated based on the net sales of all stores open at least
twelve full months at the beginning of the period for which such data is
presented.

     The Company operates two business segments - a lifestyle-oriented general
merchandise retailing segment and a wholesale apparel business ("Wholesale").
The retailing segment operates through retail stores and through direct
response, including a catalog and a website. The two retail concepts are Urban
Outfitters ("Urban Retail") and Anthropologie. Urban Retail is the larger of the
two and generates most of the Company's revenues and profits. Urban Retail had
32 stores open at January 31, 1999 and 26 at January 31, 1998. The Company's
first Anthropologie store opened in October 1992. Anthropologie had 14 stores
open at January 31, 1999 and 9 at January 31, 1998. The Company has plans to
open six Urban Retail stores and five Anthropologie stores in Fiscal 2000. An
Anthropologie catalog was tested in the first half of Fiscal 1999 and, based
upon the success of the test, was launched during the second half of the year.
To support the catalog, a website was established in August 1998. In response to
customer requests, the site began accepting orders in December 1998. The direct
response operation incurred a loss for the year, and management expects the
catalog and the Company's "e-commerce" efforts to also incur a loss for Fiscal
2000.

     Fiscal 1999 and 1998 continued as profitable years for Urban Outfitters
with earnings to net sales of 7.6% and 8.0%, respectively, as well as return on
beginning shareholders' equity of 17.4% and 18.3%, respectively. The slight
contraction of earnings as a percent of sales in Fiscal 1999 and the reduction
in return on shareholders' equity in that year resulted primarily from the
start-up costs of the catalog effort and the 35% decrease in sales by Wholesale
to unrelated entities. The Wholesale company had recorded sales growth of 8% in
Fiscal 1998. The Wholesale company is anticipated to grow at a modest rate in
Fiscal 2000.

     The Company previously established a European subsidiary - Urban Outfitters
(U.K.) Ltd. - and opened its first Urban Retail store in London in June 1998. 
The success of the London store opening enabled the subsidiary to make a small
profit during Fiscal 1999.

                                       14

<PAGE>

Results of Operations

     The following tables set forth, for the periods indicated, the percentage
of the Company's net sales represented by certain income statement data and the
growth of certain income statement data from period to period. The Company has
revised its manner of reporting gross profit to group certain buying,
distribution and occupancy costs with cost of goods sold in order to enhance the
comparability of its results with other specialty apparel retailers. Prior
period amounts have been reclassified to conform to the current year's
presentation.


<TABLE>
<CAPTION>

                                                                                          Fiscal Year Ended
                                                                                             January 31,
                                                                                   --------------------------------
As a Percentage of Net Sales                                                       1999          1998          1997
                                                                                   ----          ----          ----
<S>                                                                                <C>           <C>           <C>   
Net sales...................................................................       100.0%        100.0%        100.0%
Cost of goods sold, including certain buying, distribution
   and occupancy costs......................................................        62.0          65.0          63.5
                                                                                   -----         -----         -----
  Gross profit..............................................................        38.0          35.0          36.5
Selling, general and administrative expenses................................        26.0          22.3          22.8
                                                                                   -----         -----         -----
  Income from operations....................................................        12.0          12.7          13.7
Net interest and other expenses (income)....................................        (0.8)         (1.0)         (0.8)
                                                                                   -----         -----         -----
  Income before income taxes................................................        12.8          13.7          14.5
Income tax expense..........................................................         5.2           5.7           6.0
                                                                                   -----         -----         -----
  Net income................................................................         7.6%          8.0%          8.5%
                                                                                   =====         =====         =====

Period over Period Dollar Growth

Net sales...................................................................        20.7%         10.7%         17.6%
Gross profit................................................................        31.0%          6.1%         16.1%
Income from operations......................................................        13.8%          3.3%          7.5%
Net income..................................................................        13.5%          4.7%          7.7%
                                                                                    ====         =====         =====
</TABLE>



Fiscal 1999 Compared to Fiscal 1998

     Net sales in Fiscal 1999 increased to $209.0 million from $173.1 million in
the prior fiscal year, a 20.7% increase. The $35.9 million increase was
attributable to a combination of comparable store net sales increases of $15.1
million, net sales increases of $25.6 million from stores opened during Fiscal
1998 and Fiscal 1999, and catalog and e-commerce revenues of $5.7 million,
offset in part by a decrease of $10.5 million from the Wholesale company.

                                       15

<PAGE>

     In Fiscal 1999, increases in the number of transactions in comparable
stores and an increase in average sales prices resulting from a lower proportion
of markdowns accounted for the comparable store sales dollar increase. Eleven
new stores were opened in Fiscal 1999 and three new stores were opened in Fiscal
1998. The Wholesale sales decrease reflected lower purchases by larger retail
chains, as well as customer issues regarding quality, delivery and fashion,
which have been addressed by management.

     Gross profit margins increased to 38.0% of sales in Fiscal 1999 from 35.0%
of sales in Fiscal 1998. This increase is attributable to higher initial
mark-ups and lower markdown percentages in the Urban Retail and Anthropologie
stores. Comparable store sales increases in existing stores offset the higher
occupancy costs of noncomparable and new stores. Reduced sales in the Wholesale
segment necessitated an increased proportion of merchandise to be sold in the
"off-price" sector, offsetting in part, the higher retail segment performance.

     Selling, general and administrative expenses increased to 26.0% of sales in
Fiscal 1999 from 22.3% of sales in Fiscal 1998 due to the costs incurred for the
start-up of the catalog and European operations as well as the substantial
negative leverage associated with the decline in Wholesale segment sales. The
increase in dollars in selling, general and administrative expenses is
attributable to the opening of additional stores as well as the catalog
start-up.


Fiscal 1998 Compared to Fiscal 1997

     Net sales in Fiscal 1998 increased to $173.1 million from $156.4 million in
the prior fiscal year, a 10.7% increase. The $16.7 million increase was
attributable to a combination of comparable store net sales decreases of $1.6
million, net sales increases of $16.1 million from stores opened or enlarged
during Fiscal 1997 and Fiscal 1998 and net sales increases of $2.2 million from
the Wholesale company.

     The decrease in comparable store sales of 1% or $1.6 million resulted
primarily from one merchandise division that did not perform to prior year
levels. Average selling prices were not a significant determinant of Fiscal 1998
sales levels. New and enlarged stores included seven stores opened in Fiscal
1997 and three opened in Fiscal 1998. The Company believes increased net sales
from the Wholesale subsidiary during Fiscal 1997 and Fiscal 1998 were
attributable to increased orders and order size due to the popularity of its
product lines.

     The Company's gross profit margin declined from 36.5% in Fiscal 1997 to
35.0% in Fiscal 1998 due to higher cost of goods sold and higher occupancy
costs. The primary contributor to the cost of goods sold increase was higher
markdowns in the retail segment. Markdowns were triggered by lower than planned
comparable store sales. Occupancy costs as a percentage of sales increased due
to the impact of new stores and the comparable store sales decline.

                                       16

<PAGE>

     Selling, general and administrative expenses grew to $38.5 million in
Fiscal 1998 from $35.7 million in the prior fiscal year, a 7.7% increase. As a
percentage of net sales, selling, general and administrative costs decreased
from 22.8% of sales in Fiscal 1997 to 22.3% of sales in Fiscal 1998. The
increase in dollars is due to the opening of new stores during Fiscal 1997 and
Fiscal 1998. The decrease in such expenses as a percentage of sales was
attributable to cost containment measures at store level.


Liquidity and Capital Resources

     During the last three years, the Company has satisfied its cash
requirements through cash flow from operations. The Company's primary uses of
cash have been to open new stores and purchase inventories. Most recently, the
Company invested in the Anthropologie direct response effort and in a new
European subsidiary. An investment has also been made in a direct response
company aimed at teen shoppers (see "HMB Publishing" below). In addition to cash
generated from operations, sources of cash have included the net proceeds from
the exercise of certain employee stock options in each of Fiscal 1999, 1998 and
1997. Over the next few years, the Company expects to incur capital expenditures
in support of its expansion program. Accumulated cash and future cash from
operations are expected to fund such expansion-related uses of cash, including
additional investments in the direct response operations.

     Although the Company has not borrowed short-term or long-term funds during
the last five fiscal years, it maintains a line of credit of $16.2 million, all
of which is available for cash borrowings or for the issuance of letters of
credit. The line is unsecured and any cash borrowings under the line would
accrue interest upon an as-offered basis not to exceed LIBOR plus 1/2 of 1
percent. The Company uses letters of credit primarily to purchase private label
and Wholesale merchandise from offshore suppliers. Outstanding balances of
letters of credit at January 31, 1999 and 1998 were $4.1 million and $4.7
million, respectively. There were no short-term or long-term borrowings
outstanding at January 31, 1999 or at January 31, 1998. The Company expects that
accumulated cash and cash from operations will be sufficient to meet the
Company's cash needs for at least the next three years.


Other Matters

Year 2000

     The Year 2000 problem concerns the inability of information and technology-
based operating systems to function properly after December 31, 1999. This could
result in system failures and miscalculations which may cause business
disruptions.

                                       17

<PAGE>

     The Company does not generally sell products that must be brought into Year
2000 compliance. However, the Company does rely upon many vendors and suppliers
for their products and services, as well as utilities, financial institutions
and governmental entities that provide critical services to the Company and to
its customers. The Company has conducted a comprehensive review of its computer
systems to identify the systems that could be affected by the Year 2000 issue.
Based on the review, the Company's major information technology systems ("IT")
that would be adversely affected by Year 2000 dates will be upgraded or replaced
through the normal course of business prior to December 31, 1999. Internal
resources will be used in a timely manner to evaluate, modify and test the
Company's less critical systems that are not scheduled to be upgraded or
replaced through the normal course of business. The Company's core merchandising
and financial system upgrade and the store register system upgrades have been
completed; testing of these upgrades is substantially completed. In addition,
the Company is in the process of completing the inventory and assessment of its
non-information technology systems ("non-IT"), including those with embedded
processor chips -- heating, ventilation and air conditioning systems, elevators,
etc.

     The Company has also reviewed and continues to monitor the implemented
changes or planned changes of its major suppliers that management believes could
be affected by Year 2000 dates. The Company is evaluating key vendor
preparedness by conducting interviews, obtaining compliance representation
letters and, if deemed necessary, conducting comprehensive tests.

     The Company expects to complete its Year 2000 compliance evaluation program
by June 30, 1999. At this time, management continues to believe that the
incremental costs associated with major system upgrades and/or replacements, as
well as internal efforts to evaluate, modify and test the Company's other
systems to ensure Year 2000 compliance, will not be material to the Company.
There can be no guarantee, however, that the Company's efforts will prevent Year
2000 issues from having a material adverse impact on its results of operations,
financial condition and cash flows. The possible consequences to the Company if
its vendors and suppliers are not fully Year 2000 compliant (including the
global banking systems, communications and other public utilities and the
transportation industry) include temporary store closings and delays in the
receipt of key merchandise. Accordingly, the Company is in the process of
developing contingency plans to mitigate the potential disruptions that may
result from the Year 2000 issue. Such plans may include earlier receipt of key
merchandise, preparing alternative merchandise delivery methodologies and
securing alternative suppliers. It is anticipated that these contingency plans
to manage identified IT and non-IT areas of high risk will be completed by June
30, 1999. There can be no guarantee, however, that any contingency plans
developed by the Company will prevent such material adverse effects.

                                       18

<PAGE>

Recent Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133") which is required to be adopted in
fiscal years beginning after June 15, 1999. The Company plans to adopt SFAS No.
133 effective February 1, 2000. The Company currently enters into short-term
foreign currency forward exchange contracts to manage exposures related to its
Canadian dollar denominated investments and anticipated cash flow. The amounts
of the contracts and related gains and losses have not been material. The
adoption of SFAS No. 133 is not expected to have a significant effect on the
financial position or results of operations of the Company.

Market Risks

     The Company is exposed to the following types of market risks -
fluctuations in the purchase price of merchandise, as well as other goods and
services; the value of foreign currencies in relation to the U.S. dollar; and
changes in interest rates. Due to the Company's inventory turn and its
historical ability to pass through the impact of any generalized changes in its
cost of goods to its customers through pricing adjustments, commodity and other
product risks are not expected to be material. The Company purchases
substantially all its merchandise in U.S. dollars, including a portion of the
goods for its stores located in Canada and the United Kingdom. As explained in
the section above on "Recent Accounting Pronouncements," the market risk is
further limited by the Company's purchase of foreign currency forward exchange
contracts.

     Since the Company has not been a borrower, its exposure to interest rate
fluctuations is limited to the impact on its marketable securities portfolio.
This exposure is minimized by the limited investment maturities and "put"
options available to the Company as explained in the notes to the financial
statements appearing elsewhere in this report. The impact of a hypothetical two
percent increase or decrease in prevailing interest rates would not materially
affect the Company's consolidated financial position or results of operations.

HMB Publishing, Inc.

     On February 5, 1998 the Company entered into an agreement with HMB
Publishing, Inc. ("HMB") for the purchase of securities convertible into a
minority interest in the company through Series B Convertible Preferred Stock
("Series B Preferred") and certain convertible debentures. The agreement called
for additional investments and ownership if HMB met certain performance
milestones. HMB is a development stage company that publishes mXg(TM), a
combination magazine and catalog and operates a website - www.mXgonline.com -
that caters to teenage girls. The original business plan contemplated
substantial losses in the first two fiscal years.

                                       19

<PAGE>

     As of January 31, 1999, the Company has invested approximately $2.0 million
in the Series B Preferred and an additional $1.75 million in the convertible
debentures. Since January 31, 1999, the Company has advanced an additional $1.1
million to fund further marketing efforts and additional development of the
website and, together with additional investors, will seek to position HMB for
more rapid expansion. The Company expects to realize a return on its investment,
and it is the Company's intent to maintain an equity interest following any
public offering by HMB.

Subsequent Event 

     In accordance with its previously announced stock buyback program, that
authorized the Company to repurchase up to 800,000 of its shares, the Company
has repurchased 279,000 shares of its common stock at a cost of $3.7 million
during the period from February 1, 1999 through March 12, 1999 in a series of
individual open market transactions.

Forward-Looking Statements

     Pursuant to the "Safe Harbor" provisions of the Private Securities
Litigation Reform Act of 1995, this report contains forward-looking statements
which may be identified by their use of words such as "plans," "expects,"
"will," "anticipates," "intends," "projects," "estimates" or other words of
similar meaning. Any one or all of the following factors could cause actual
financial results to differ materially from those financial results mentioned in
the forward-looking statements: industry competition factors, unavailability of
suitable retail space for expansion, difficulty in predicting and responding to
fashion trend shifts, seasonal fluctuations in gross sales, the level of returns
experienced by the business segments, the levels of margins achievable in the
marketplace, the departure of one or more key senior managers, the failure of
the Company or third parties to become Year 2000 capable and other risks
identified in filings with the Securities and Exchange Commission. The Company
disclaims any intent or obligation to update forward-looking statements and
cannot guarantee that the assumptions and expectations are accurate or will be
realized.

                                       20

<PAGE>

Seasonality and Quarterly Results

     While Urban Outfitters has been profitable in each of its last 36 operating
quarters, its operating results are subject to seasonal fluctuations. The
Company's highest sales levels have historically occurred during the five-month
period from August 1 to December 31 of each year (the "Back-to-School" and
Holiday periods). Sales generated during these periods have traditionally had a
significant impact on the Company's results of operations. Any decreases in
sales for these periods or in the availability of working capital needed in the
months preceding these periods could have a material adverse effect on the
Company's results of operations. The Company's results of operations in any one
fiscal quarter are not necessarily indicative of the results of operations that
can be expected for any other fiscal quarter or for the full fiscal year.

     The Company's results of operations may also fluctuate from quarter to
quarter as a result of the amount and timing of expenses incurred in connection
with, and sales contributed by, new stores, store expansions and the integration
of new stores into the operations of the Company or by the size and timing of
mailings of the Company's Anthropologie catalog. Fluctuations in the bookings
and shipments of Wholesale products between quarters can also have positive or
negative effects on earnings during the quarters.

                                       21

<PAGE>

     The following tables, which are unaudited, set forth the Company's net
sales, gross profit, net income and income per share for each quarter during the
last three fiscal years and the amount of such net sales and net income,
respectively, as a percentage of annual net sales and annual net income. The
Company has revised its manner of reporting gross profit to group certain
buying, distribution and occupancy costs with cost of goods sold in order to
enhance comparability of its results with other specialty apparel retailers.
Prior period amounts have been reclassified to conform to the current year's
presentation.


<TABLE>
<CAPTION>

                                                                              Fiscal 1997 Quarter Ended
                                                             -----------------------------------------------------------
                                                                    (Dollars in thousands, except per share data)

                                                             April 30,         July 31,         Oct. 31,        Jan. 31,
                                                                1996             1996             1996            1997
                                                             ---------        ---------        ---------       ---------
<S>                                                          <C>              <C>              <C>             <C>      
Net sales............................................        $  33,635        $  35,898        $  44,884       $  41,997
Gross profit.........................................           12,235           13,368           16,809          14,675
Net income...........................................            2,927            2,849            4,632           2,852
Net income per share - assuming dilution.............        $    0.17        $    0.16        $    0.26       $    0.16

As a Percentage of Fiscal Year:
Net sales............................................              21%              23%              29%             27%
Net income...........................................              22%              21%              35%             22%

</TABLE>



<TABLE>
<CAPTION>

                                                                                 Fiscal 1998 Quarter Ended                        
                                                             -----------------------------------------------------------
                                                                    (Dollars in thousands, except per share data)

                                                             April 30,         July 31,         Oct. 31,        Jan. 31,
                                                               1997             1997            1997             1998
                                                             ---------        ---------        ---------       ---------
<S>                                                          <C>              <C>              <C>             <C>      
Net sales............................................        $  37,197        $  41,316        $  48,373       $  46,235
Gross profit.........................................           12,674           14,091           17,575          16,222
Net income...........................................            2,423            2,855            4,783           3,819
Net income per share - assuming dilution.............        $    0.14        $    0.16        $    0.27       $    0.21

As a Percentage of Fiscal Year:
Net sales............................................              21%              24%              28%             27%
Net income...........................................              17%              21%              34%             28%

</TABLE>


                                       22

<PAGE>


<TABLE>
<CAPTION>
                                                                                 Fiscal 1999 Quarter Ended                        
                                                             -----------------------------------------------------------
                                                                    (Dollars in thousands, except per share data)

                                                             April 30,         July 31,         Oct. 31,        Jan. 31,
                                                               1998             1998            1998             1999
                                                             ---------        ---------        ---------       ---------
<S>                                                          <C>              <C>              <C>             <C>      
Net sales............................................         $ 39,384         $ 48,068         $ 60,462        $ 61,055
Gross profit.........................................           13,974           17,758           23,520          24,092
Net income...........................................            2,100            3,440            5,035           5,185
Net income per share - assuming dilution.............         $   0.12         $   0.19         $   0.28        $   0.29

As a Percentage of Fiscal Year:
Net sales............................................              19%              23%              29%             29%
Net income...........................................              13%              22%              32%             33%

</TABLE>




I
tem 8. Financial Statements and Supplementary Data

     The information required by this Item is incorporated by reference to Pages
F-1 through F-20.



Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

     Not applicable.

                                       23

<PAGE>


                                    PART III


Item 10. Directors and Executive Officers of the Registrant

     The Company's bylaws provide for the Board of Directors to be comprised of
as many directors as are designated from time to time by the Board of Directors,
which designation is presently five. Each director shall be elected for the term
of one year and shall serve until his successor is elected and qualified. The
officers of the corporation are elected or appointed by the Board of Directors
and each shall serve at the pleasure of the Board.

     The directors and executive officers of the Company are as follows:


 NAME                        AGE             POSITION
 ----                        ---             --------
 Richard A. Hayne            52      Chairman of the Board of Directors and
                                     President

 Stephen A. Feldman          51      Chief Financial Officer and Treasurer

 Glen A. Bodzy               46      General Counsel and Secretary

 Michael A. Schultz          45      President, Urban Outfitters Wholesale, Inc.

 Glen T. Senk                42      President, Anthropologie, Inc.

 Scott A. Belair(1)(2)       51      Director

 Harry S. Cherken, Jr.       49      Director

 Kenneth K. Cleeland         58      Director

 Joel S. Lawson III(1)(2)    51      Director

 Burton M. Sapiro            72      Director

- ----------------------------------

(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.

                                       24

<PAGE>

     Mr. Hayne co-founded the Company in 1970 and has been its President and
Chairman of the Board of Directors since the Company's incorporation in 1976.

     Mr. Feldman became Chief Financial Officer of the Company in June 1998.
Prior to that time, Mr. Feldman served as Executive Vice President and Chief
Financial Officer of One Price Clothing Stores, a regional chain of off-price
retail women's specialty stores, from January 1995 to June 1998 and Senior Vice
President - Chief Financial Officer of Bradlees, Inc. a northeastern regional
discount department store chain from October 1992 to December 1994. In June
1995, Bradlees, Inc. filed a plan of reorganization under Chapter 11 of the
Bankruptcy Code and emerged from bankruptcy in February 1999.

     Mr. Bodzy joined the Company as its General Counsel in December 1997 and
was appointed Secretary in February 1999. Previously Mr. Bodzy was Vice
President, General Counsel and Secretary of Service Merchandise Company, Inc.
and was responsible for legal affairs, the store development program and various
other corporate areas.

     Mr. Schultz has served as President of Urban Outfitters Wholesale, Inc.
since 1986.

     Mr. Senk has served as President of Anthropologie, Inc. since joining the
company in April 1994. Prior to joining Anthropologie, Mr. Senk was Senior Vice
President and General Merchandise Manager of Williams-Sonoma, Inc. and Chief
Executive of the Habitat International Merchandise and Marketing Group in
London, England.

     Mr. Belair co-founded the Company, has been a director since its
incorporation in 1976 and has served as Principal of the ZAC Group, a provider
of financial services, during the last seven years. Previously, he was a
managing director of Drexel Burnham Lambert Incorporated. Mr. Belair is a
director and President of Balfour MacLaine Corporation.

     Mr. Cherken, a director since 1989, has been a partner in the law firm of
Drinker Biddle & Reath LLP in Philadelphia, Pennsylvania since 1984 and has
served as a Managing Partner of that firm since February 1996.

     Mr. Lawson, a director since 1985, has since 1980 been the Managing Partner
and Chief Executive Officer of Howard, Lawson, & Co., an investment banking and
corporate finance firm located in Philadelphia, Pennsylvania.

     Mr. Sapiro, a director since 1989, has been a retail marketing consultant
since his retirement in 1985. Previously, he was Senior Vice President/General
Merchandise Manager and a member of the Executive Committee of both Macy's New
York and Gimbels Philadelphia/Gimbels East. He was also a director of Macy's New
York.

                                       25

<PAGE>


Item 11. Executive Compensation

     Information required by this item is incorporated herein by reference from
the Company's Proxy Statement for the 1999 Annual Meeting of Shareholders.



Item 12. Security Ownership of Certain Beneficial Owners and Management

     Information required by this item is incorporated herein by reference from
the Company's Proxy Statement for the 1999 Annual Meeting of Shareholders.



Item 13. Certain Relationships and Related Transactions

     Information required by this item is incorporated herein by reference from
the Company's Proxy Statement for the 1999 Annual Meeting of Shareholders.

                                       26

<PAGE>


                                     PART IV


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K


                        (a) The following documents are filed as part of this
                            report:

                            (1)     Financial Statements
                                    --------------------
                            Financial Statements filed herewith are listed in
                            the accompanying index on page F-1.

                            (2)     Financial Statement Schedules          Page
                                    -----------------------------          ----
                            Schedule II-Valuation and Qualifying Accounts S-1

All other schedules are omitted because they are not applicable or not required,
or because the required information is included in the consolidated financial
statements or notes thereto.

                            (3) Exhibits

Exhibit Number                         Description
- --------------                         -----------
3.1                         Amended and Restated Articles of
                            Incorporation are incorporated by
                            reference to Exhibit 3.1 of the Company's
                            Registration Statement on Form S-1
                            (File No. 33-69378) filed on
                            September 24, 1993.

3.2                         Amended and Restated bylaws are
                            incorporated by reference to Exhibit 3.2
                            of the Company's Registration Statement
                            on Form S-1 (File No. 33-69378)
                            filed on September 24, 1993.

10.1                        1987 Incentive Stock Option Plan is
                            incorporated by reference to Exhibit 10.1 of
                            the Company's Registration Statement on
                            Form S-1 (File No. 33-69378) filed on
                            September 24, 1993.

                                       27

<PAGE>

10.2                        1992 Non-Qualified Stock Option Plan
                            is incorporated by reference to Exhibit 10.2
                            of the Company's Registration Statement
                            on Form S-1 (File No. 33-69378)
                            filed on September 24, 1993.

10.3                        Consulting Agreement, dated September 22, 1995
                            and effective October 1, 1995, between the
                            Company and Burton M. Sapiro, incorporated by
                            reference to Exhibit 10.3 of the Company's
                            Annual Report on Form 10-K for the Fiscal
                            year ended January 31, 1996.

10.4                        Urban Outfitters, Inc. Profit-Sharing
                            Fund is incorporated by reference to Exhibit 10.4
                            of the Company's Registration Statement on
                            Form S-1 (File No. 33-69378) filed on
                            November 3, 1993.

10.5                        1993 Non-Employee Directors' Non-Qualified
                            Stock Option Plan (as amended and restated)
                            incorporated by reference to Exhibit 10.5 of the
                            Company's Annual Report on Form 10-K for the
                            Fiscal year ended January 31, 1995.

10.6                        1997 Stock Option Plan is incorporated by
                            reference to Exhibit 10.6 of the Company's Annual
                            Report on Form 10-K for the Fiscal year ended
                            January 31, 1997.

21.1                        List of Subsidiaries.

22.0                        Income Per Share Calculation

23.1                        Consent of Independent Accountants


                        (b) Reports on Form 8-K: No reports on Form 8-K have
                            been filed during the period covered by this report.

                                       28

<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                     URBAN OUTFITTERS, INC.

                                                     By: /s/ Richard A. Hayne
                                                         --------------------
                                                         Richard A. Hayne
                                                         President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

               Signature                                               Title                        Date
               ---------                                               -----                        ----

<S>                                                              <C>                            <C> 
/s/ Richard A. Hayne                                             Chairman of the               April 19, 1999
- --------------------------------------                         Board, President and
Richard A. Hayne                                                     Director      
(Principal Executive Officer)

/s/ Stephen A. Feldman                                       Chief Financial Officer           April 19, 1999
- --------------------------------------                                 and   
Stephen A. Feldman                                                  Treasurer
(Principal Financial and
 Accounting Officer)

/s/ Scott A. Belair                                                  Director                  April 19, 1999
- --------------------------------------
Scott A. Belair

/s/ Harry S. Cherken, Jr.                                            Director                  April 19, 1999
- --------------------------------------
Harry S. Cherken, Jr.

/s/ Kenneth K. Cleeland                                              Director                  April 19, 1999
- --------------------------------------
Kenneth K. Cleeland

/s/ Joel S. Lawson III                                               Director                  April 19, 1999
- --------------------------------------
Joel S. Lawson III


/s/ Burton M. Sapiro                                                 Director                  April 19, 1999
- -------------------------------------- 
Burton M. Sapiro

</TABLE>


                                       29

<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                             URBAN OUTFITTERS, INC.


Page
- ----

Report of Independent Accountants..........................................F-2

Consolidated Balance Sheets at January 31, 1999
and January 31, 1998.......................................................F-3

Consolidated Statements of Income for the
years ended January 31, 1999, 1998 and 1997................................F-4

Consolidated Statements of Shareholders' Equity for the
years ended January 31, 1999, 1998 and 1997................................F-5

Consolidated Statements of Cash Flows for the
years ended January 31, 1999, 1998 and 1997................................F-6

Notes to Consolidated Financial Statements.................................F-7

                                       F-1

<PAGE>


                        Report of Independent Accountants



To the Board of Directors and Shareholders of Urban Outfitters, Inc.


In our opinion, the consolidated financial statements listed under Item 14(a)(1)
present fairly, in all material respects, the financial position of Urban
Outfitters, Inc. and its subsidiaries at January 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years in
the period ended January 31, 1999, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedules listed under Item 14(a)(2) present fairly, in all material respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedules are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.


PricewaterhouseCoopers LLP


Philadelphia, Pennsylvania
March 12, 1999


                                       F-2

<PAGE>

                             URBAN OUTFITTERS, INC.
                           Consolidated Balance Sheets
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                                           January 31,
                                                                                                 ------------------------------
                                                                                                   1999                 1998
                                                                                                 ---------            ---------
                                    Assets
<S>                                                                                              <C>                  <C>      
Current assets:
   Cash and cash equivalents..........................................................           $  25,165            $  26,712
   Marketable securities..............................................................              13,032               10,865
   Accounts receivable, net of allowance for doubtful accounts of $603 and $616
      at January 31, 1999 and 1998, respectively .....................................               4,824                4,497
   Inventory..........................................................................              21,881               17,128
   Prepaid expenses and other current assets..........................................               4,729                4,662
   Deferred taxes.....................................................................               1,924                1,929
                                                                                                 ---------            ---------
Total current assets..................................................................              71,555               65,793

Property and equipment, less accumulated depreciation and amortization................              43,066               26,893
Marketable securities.................................................................              12,218               11,993
Other assets..........................................................................               6,524                2,745
                                                                                                 ---------            ---------
                                                                                                  $133,363             $107,424
                                                                                                 =========            =========

                                    Liabilities and Shareholders' Equity
Current liabilities:
   Trade accounts payable.............................................................           $  14,763            $  10,386
   Income taxes payable...............................................................               1,300                  366
   Current portion of capital lease obligations.......................................                  88                    -
   Accrued compensation...............................................................               2,011                1,024
   Accrued expenses and other current liabilities.....................................               5,866                1,884
                                                                                                 ---------            ---------
Total current liabilities.............................................................              24,028               13,660

Capital lease obligations, net of current portion.....................................                 185                    -

Accrued rent and other liabilities....................................................               3,856                3,106
                                                                                                 ---------            ---------
Total liabilities.....................................................................              28,069               16,766
                                                                                                 ---------            ---------

Commitments and contingencies

Shareholders' equity:.................................................................
   Preferred shares; $.0001 par, 10,000,000 authorized, none issued                                      -                    -
   Common shares; $.0001 par, 50,000,000 shares authorized, 17,639,754,
      and 17,649,360 issued at January 31, 1999 and 1998, respectively................                   2                    2
   Additional paid-in capital.........................................................              20,825               21,482
   Retained earnings..................................................................              84,934               69,174
   Accumulated other comprehensive income (loss)......................................               (467)                   --
                                                                                                 ---------            ---------
Total shareholders' equity............................................................             105,294               90,658
                                                                                                 ---------            ---------
                                                                                                 $ 133,363            $ 107,424
                                                                                                 =========            =========
</TABLE>


                             See accompanying notes

                                       F-3

<PAGE>

                             URBAN OUTFITTERS, INC.
                        Consolidated Statements of Income
                 (in thousands, except share and per share data)



<TABLE>
<CAPTION>

                                                                                    Fiscal Year Ended January 31,
                                                                            1999                1998                 1997
                                                                        -----------          -----------          -----------

<S>                                                                     <C>                  <C>                  <C>        
Net sales...................................................            $   208,969          $   173,121          $   156,414
Cost of sales, including certain buying,
  distribution and occupancy costs..........................                129,625              112,559               99,327
                                                                        -----------          -----------          -----------
          Gross profit......................................                 79,344               60,562               57,087
Selling, general and administrative expenses................                 54,227               38,500               35,731
                                                                        -----------          -----------          -----------
          Income from operations............................                 25,117               22,062               21,356
Interest income.............................................                  2,126                1,772                1,506
Other expenses, net.........................................                  (531)                (209)                (193)
                                                                        -----------          -----------          -----------
          Income before income taxes........................                 26,712               23,625               22,669
Income tax expense..........................................                 10,952                9,745                9,409
                                                                        -----------          -----------          -----------
          Net income........................................            $    15,760          $    13,880          $    13,260
                                                                        ===========          ===========          ===========

Net income per common share:
       Basic................................................            $      0.89          $      0.79          $      0.76
                                                                        ===========          ===========          ===========
       Diluted..............................................            $      0.88          $      0.78          $      0.75
                                                                        ===========          ===========          ===========

Weighted average common shares outstanding:
       Basic................................................             17,702,922           17,576,203           17,429,375
                                                                        ===========          ===========          ===========
       Diluted..............................................             17,929,109           17,843,873           17,722,629
                                                                        ===========          ===========          ===========

</TABLE>


                             See accompanying notes

                                       F-4


<PAGE>

                             URBAN OUTFITTERS, INC.
                 Consolidated Statements of Shareholders' Equity
                        (In thousands, except share data)


<TABLE>
<CAPTION>

                                                                                          Common Shares
                                                                  -------------------------------------------------------
                                                                                                                           
                                                                                                                           
                                               Comprehensive                                                               
                                                      Income       Number of         Par        Additional       Retained  
                                                      (Loss)          Shares        Value  Paid-in Capital       Earnings  
                                               -------------      ----------        -----  ---------------   ------------  
<S>                                            <C>                <C>               <C>       <C>            <C>           
Balances at January 31, 1996.............                         17,080,372        $   1     $     17,417   $     42,034  

Net income................................     $      13,260              --           --               --         13,260  
Foreign currency translation..............                --              --           --               --             --  
                                               -------------

Comprehensive income......................            13,260
                                               =============
Exercise of stock options.................                           448,326           --              806             --  
Tax effect of exercises...................                                --           --            2,173             --  
Effect of stock split.....................                                --            1               --             --  
                                                                  ----------        -----     ------------   ------------  
Balances at January 31, 1997..............                        17,528,698            2           20,396         55,294  

Net income................................     $      13,880              --           --               --         13,880  
Foreign currency translation..............                --              --           --               --             --  
                                               -------------
Comprehensive income......................     $      13,880
                                               =============
Exercise of stock options.................                           120,662           --              558             --  
Tax effect of exercises...................                                --           --              528             --  
                                                                  ----------        -----     ------------   ------------  
Balances at January 31, 1998..............                        17,649,360            2           21,482         69,174  

Net income................................     $      15,760              --           --               --         15,760  
Foreign currency translation..............              (467)             --           --               --             --  
                                               -------------
Comprehensive income......................     $      15,293
                                               =============
Exercise of stock options.................                           157,594           --              688             --  
Tax effect of exercises...................                                --           --              909             --  
Purchase and retirement of common shares..                          (167,200)          --           (2,254)            --  
                                                                  ----------        -----     ------------   ------------  
Balances at January 31, 1999.............                         17,639,754        $   2     $     20,825   $     84,934  
                                                                  ==========        =====     ============   ============  


<CAPTION>

                                            
                                            
                                               Accumulated
                                                     Other
                                             Comprehensive
                                                    Income
                                                    (Loss)        Total
                                             -------------  -----------
<S>                                           <C>           <C>        
Balances at January 31, 1996.............     $        --   $    59,452

Net income................................             --        13,260
Foreign currency translation..............             --            --
                                            

Comprehensive income......................  
                                            
Exercise of stock options.................             --           806
Tax effect of exercises...................             --         2,173
Effect of stock split.....................             --             1
                                              -----------   -----------
Balances at January 31, 1997..............             --        75,692

Net income................................             --        13,880
Foreign currency translation..............             --            --
                                            
Comprehensive income......................  
                                            
Exercise of stock options.................             --           558
Tax effect of exercises...................             --           528
                                              -----------   -----------
Balances at January 31, 1998..............                       90,658

Net income................................             --   $    15,760
Foreign currency translation..............           (467)         (467)
                                            
Comprehensive income......................  
                                            
Exercise of stock options.................             --           688
Tax effect of exercises...................             --           909
Purchase and retirement of common shares..             --        (2,254)
                                              -----------   -----------
Balances at January 31, 1999.............     $      (467)  $   105,294
                                              ===========   ===========

</TABLE>


                             See accompanying notes

                                       F-5

<PAGE>



                             URBAN OUTFITTERS, INC.
                      Consolidated Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>


                                                                                          Fiscal Year Ended January 31,
                                                                                -------------------------------------------------
                                                                                   1999                1998               1997
                                                                                ----------           ---------          ---------

<S>                                                                             <C>                 <C>                <C>       
Cash flows from operating activities:
   Net income............................................................       $   15,760          $   13,880         $   13,260
   Adjustments to reconcile net income to net cash provided by
      operating activities:
      Depreciation and amortization......................................            5,621               4,588              3,461
      Provision for deferred income taxes................................            (561)                (794)              (705)
      Provision for losses (recovery) of accounts receivable.............             (13)                 (27)               112
      Changes in assets and liabilities:
         Increase in receivables.........................................             (314)             (1,643)            (1,366)
         Increase in inventory...........................................           (4,753)               (163)            (6,488)
         Decrease (increase) in prepaid expenses and other assets........              474                 249             (1,549)
         Increase in payables, accrued expenses and other liabilities....           11,030               2,783              2,318
                                                                                ----------           ---------          ---------
   Net cash provided by operating activities.............................           27,244              18,873              9,043
                                                                                ----------           ---------          ---------

Cash flows from investing activities:
   Capital expenditures..................................................          (21,521)             (6,272)           (11,980)
   Purchases of marketable securities held-to-maturity...................          (11,068)             (9,333)           (20,522)
   Purchases of marketable securities available-for-sale.................           (3,110)             (8,075)            (2,425)
   Sales of marketable securities available-for-sale.....................            1,900               6,100              5,035
   Maturities of marketable securities held-to-maturity..................            9,886               9,752             12,356
   Purchase of investment................................................           (3,754)                 --                 --
                                                                                ----------           ---------          ---------
   Net cash used in investing activities.................................          (27,667)             (7,828)           (17,536)
                                                                                ----------           ---------          ---------

Cash flows from financing activities:
   Exercise of stock options.............................................            1,597               1,086              2,979
   Purchases and retirement of common stock..............................           (2,254)                 --                 --
                                                                                ----------           ---------          ---------
   Net cash (used in) provided by financing activities...................             (657)              1,086              2,979
                                                                                ----------           ---------          ---------

Effect of exchange rate changes on cash and cash equivalents.............             (467)                 --                 --
                                                                                ----------           ---------          ---------

Increase (decrease) in cash and cash equivalents.........................           (1,547)             12,131             (5,514)

Cash and cash equivalents at beginning of period.........................           26,712              14,581             20,095
                                                                                ----------           ---------          ---------
Cash and cash equivalents at end of period...............................       $   25,165           $  26,712          $  14,581
                                                                                ==========           =========          =========
</TABLE>


                             See accompanying notes

                                       F-6


<PAGE>

Urban Outfitters, Inc.

Notes to Consolidated Financial Statements
(dollars in thousands, except per share data)


1. Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the accounts of Urban
Outfitters, Inc. and its wholly owned subsidiaries. All significant intercompany
transactions have been eliminated in consolidation. The principal business
activity of the Company is the operation of a general consumer product retail
business through retail stores, a catalog and a website. In addition, the
Company engages in the wholesale distribution of apparel to over 1,300 better
specialty stores worldwide.

Cash and Cash Equivalents

     Cash and cash equivalents are defined as cash and highly liquid investments
with original maturities of less than three months. They are carried at
amortized cost, which approximates fair value because of the short maturity of
these instruments.

Marketable Securities

     The Company's debt and equity securities are classified as either
held-to-maturity or available-for-sale. Held-to-maturity securities represent
those securities that the Company has both the positive intent and ability to
hold to maturity and are carried at amortized cost. Interest on these securities
as well as amortization is included in interest income. Available-for-sale
securities represent those securities that do not meet the classification of
held-to-maturity, are not actively traded and are carried at fair value.
Unrealized gains and losses on these securities are excluded from earnings and
should be reported as a separate component of shareholders' equity, net of
applicable taxes, until realized. Gross unrealized gains and losses, net of the
related deferred taxes, have not been material. When available-for-sale
securities are sold, the cost of the securities is specifically identified and
is used to determine the realized gain or loss. These amounts have not been
material.

Concentration of Credit Risk

     Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash equivalents and
investments. The Company manages the credit risk associated with cash
equivalents and investments by investing with high-quality institutions and, by
policy, limiting the amount of credit exposure to any one institution.

Inventories

     Inventories, which consist of general consumer merchandise held for sale,
are valued at the lower of cost or market. The cost is determined on the
first-in, first-out method.

                                       F-7

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)


Depreciation and Amortization

     Property and equipment are stated at cost. Depreciation and amortization
are computed using the straight-line method over five years for furniture and
fixtures, "life of lease" for leasehold improvements and three to ten years for
other operating equipment.

     The Company reviews long-lived assets for possible impairment whenever
events or changes in circumstances indicate the carrying amount may not be
recoverable. This determination includes evaluation of factors such as current
market value, future asset utilization and future net undiscounted cash flows
expected to result from the use of the assets.

Income Taxes

     The Company utilizes the asset and liability method of accounting for
income taxes. Under this method, deferred tax assets and liabilities are
recognized for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.

Net Income Per Share

     Basic earnings per share are based upon the weighted average number of
common shares outstanding. Diluted earnings per share are based upon the
weighted average number of common shares outstanding and the potential dilution
that could occur if stock options were exercised.

Accounting Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosure of contingencies at the date of the financial statements and the
reported amounts of net sales and expenses during the reporting period.
Differences from those estimates, if any, are recorded in the period they become
known.

Accounting for Stock-Based Compensation

     In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). SFAS No. 123 defines a fair value-based method
of accounting for employee stock options or other similar equity instruments.
Companies must either adopt the new method or disclose the pro forma income
statement effects in their financial statements. The Company has chosen to
disclose the pro forma income statement effects of SFAS No. 123 only.

                                       F-8

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)

Advertising

     The Company expenses the costs of advertising when the advertising occurs,
except for direct response advertising, which is capitalized and amortized over
its expected period of future benefit. Advertising costs reported as prepaid
expenses are not material. Advertising expense was $4,486 for the fiscal year
ended January 31, 1999. Advertising expenses incurred for the fiscal years ended
January 31, 1998 and January 31, 1997 were immaterial.

Foreign Currency Translation

     The financial statements of the Company's foreign operations are translated
into U.S. dollars. Assets and liabilities are translated at current exchange
rates while income and expense accounts are translated at the average rates in
effect during the year. Translation adjustments are not included in determining
net income, but are included in accumulated other comprehensive income within
shareholders' equity.

Recent Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133") which is required to be adopted in
fiscal years beginning after June 15, 1999. The Company plans to adopt SFAS No.
133 effective February 1, 2000. The Company currently enters into short-term
foreign currency forward exchange contracts to manage exposures related to its
Canadian dollar denominated investments and anticipated cash flow. The amounts
of these contracts and related gains and losses have not been material. The
adoption of SFAS No. 133 is not expected to have a significant effect on the
financial position or results of operations of the Company.

Reclassifications

     Certain reclassifications of prior years' data have been made to conform to
the Fiscal 1999 presentation.

                                       F-9

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)

2. Marketable Securities

     The amortized cost and estimated fair value of the marketable securities
are as follows:


<TABLE>
<CAPTION>

                                                               January 31, 1999                     January 31, 1998
                                                             -----------------------             -----------------------

                                                            Amortized        Fair               Amortized         Fair
                                                               Cost          Value                 Cost           Value 
                                                             --------       --------             --------       --------
<S>                                                          <C>            <C>                  <C>            <C>     
Current portion
   Held-to-maturity
     Tax-exempt municipal securities                         $  9,206       $  9,273             $  7,272       $  7,294
     U.S. government securities                                    --             --                1,318          1,318
                                                             --------       --------             --------       --------
   Total current held-to-maturity                               9,206          9,273                8,590          8,612

   Available-for-sale
     Tax-exempt municipal securities, putable                   3,826          3,844                2,275          2,275
                                                             --------       --------             --------       --------
   Total current marketable securities                         13,032         13,117               10,865         10,887
                                                             --------       --------             --------       --------

Noncurrent portion
   Held-to-maturity
     Tax-exempt municipal securities                           12,218         12,367               11,993         12,111
     U.S. government securities                                    --             --                   --             --
                                                             --------       --------             --------       --------
   Total noncurrent held-to-maturity                           12,218         12,367               11,993         12,111
                                                             --------       --------             --------       --------

Total marketable securities                                  $ 25,250       $ 25,484             $ 22,858       $ 22,998
                                                             ========       ========             ========       ========
</TABLE>



     The noncurrent portion of investments held-to-maturity has contractual
maturities of one to four years. The investments available-for-sale have a
contractual maturity of greater than five years. Actual maturities may differ
from contractual maturities as a result of put and call options that enable
either the Company and/or the issuer to redeem particular securities at an
earlier date. The fair value of the securities is determined based upon market
prices.

                                      F-10

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



3.       Inventory

         Inventory is summarized as follows:

<TABLE>
<CAPTION>

                                                                             January 31,
                                                                    ----------------------------
                                                                      1999                1998
                                                                    --------            --------
<S>                                                                 <C>                 <C>     
         Work-in-progress................................           $    711            $    861
         Finished goods..................................             21,170              16,267
                                                                    ---------           --------
                      Total..............................           $ 21,881            $ 17,128
                                                                    ========            ========


4.       Property and Equipment

         Property and equipment is summarized as follows:

                                                                             January 31,
                                                                    ----------------------------
                                                                      1999                1998
                                                                    --------            --------
<S>                                                                 <C>                 <C>     
         Land............................................           $    543            $    543
         Furniture and fixtures..........................             17,901              13,739
         Leasehold improvements..........................             45,045              28,267
         Other operating equipment.......................              2,888               2,034
                                                                    --------            --------
                                                                      66,377              44,583
         Accumulated depreciation
                and amortization.........................            (23,311)            (17,690)
                                                                    --------            --------
                      Total..............................           $ 43,066            $ 26,893
                                                                    ========            ========


5.       Accrued Expenses

         Accrued expenses consist of the following:

                                                                             January 31,
                                                                    ----------------------------
                                                                      1999                1998
                                                                    --------            --------
<S>                                                                 <C>                 <C>     
         Accrued sales taxes . . . . . . . . . . . . . . .          $    956            $    489
            Accruals for construction in progress. .                   1,223                  --
         Other current liabilities . . . . . . . . . . . .             3,687               1,395
                                                                    --------            --------
                      Total..............................            $ 5,866            $  1,884
                                                                    ========            ========
</TABLE>


         The reported amounts approximate fair value because of the short
maturity of these obligations.

                                      F-11

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



6. Line of Credit

     The Company has available a $16,200 revolving line of credit to facilitate
letter of credit transactions and cash advances. Interest on outstanding
balances is payable monthly based on an "as offered" rate not to exceed the
London Interbank Offered Rate (LIBOR) plus 1/2%. No principal amounts were
outstanding under this line at January 31, 1999 and 1998. Outstanding letters of
credit totaled $4,096 and $4,706 as of January 31, 1999 and 1998, respectively.
These letters of credit, which have terms from one month to one year,
collateralize the Company's obligation to third parties for the purchase of
inventory. The fair value of these letters of credit is estimated to be the same
as the contract values.


7. Segment Reporting

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and related Information" ("SFAS No. 131"). The adoption of SFAS No.
131 has no impact on the Company's consolidated results of operations, financial
position or cash flows. Its effect is limited to the disclosures contained in
the financial statements.

     Urban Outfitters is a national retailer of lifestyle-oriented general
merchandise through 46 stores operating under the retail names "Urban
Outfitters" and "Anthropologie," and through a catalog and website. Sales from
this retail segment account for over 90% of total consolidated sales for the
fiscal year ended January 31, 1999. The remainder is derived from a wholesale
division that manufactures and distributes apparel to the retail segment and to
over 1,300 better specialty stores worldwide.

     The Company has aggregated its operations into these two reportable
segments based upon their unique management, customer base and economic
characteristics. Reporting in this format provides management with the financial
information necessary to evaluate the success of the segments and the overall
business. The Company evaluates the performance of the segments based on the net
sales and pre-tax income from operations (excluding intercompany royalty and
interest charges) of the segment. Corporate expenses include expenses incurred
in and directed by the corporate office that are not allocated to segments. The
principal identifiable assets for each operating segment are inventory and fixed
assets. Other assets are comprised primarily of general corporate assets, which
principally consist of cash and cash equivalents, marketable securities and
other assets. Intersegment sales were immaterial in each of the last three
fiscal years. The Company accounts for intersegment sales and transfers as if
the sales and transfers were made to third parties making similar volume
purchases.

                                      F-12

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)

     Both the retail and wholesale segment are highly diversified. No customer
comprises more than 10% of sales. Foreign operations are immaterial relative to
the overall Company.

         The accounting policies of the operating segments are the same as the
policies described above in Note 1, "Significant Accounting Policies". A summary
of the information about the Company's operations by segment is as follows:


<TABLE>
<CAPTION>

                                                                                        Fiscal Year
                                                                      ----------------------------------------------
                                                                         1999              1998              1997
                                                                      ----------        ----------        ----------
<S>                                                                   <C>               <C>               <C>       
Operating revenues
Retail operations                                                     $  189,034        $  142,638        $  128,081
Wholesale operations                                                      23,652            35,343            31,944
Intersegment elimination                                                  (3,717)           (4,860)           (3,611)
                                                                      ----------        ----------        ----------
Total net sales                                                       $  208,969        $  173,121        $  156,414
                                                                      ==========        ==========        ==========

Income from operations
Retail operations                                                     $   25,886        $   17,600        $   16,104
Wholesale operations                                                         985             5,397             5,995
                                                                      ----------        ----------        ----------
Total segment operating income                                            26,871            22,997            22,099

General corporate expenses                                                (1,754)             (935)             (743)
                                                                      ----------        ----------        ----------
Total income from operations                                          $   25,117        $   22,062        $   21,356
                                                                      ==========        ==========        ==========

Depreciation and amortization expense
Retail operations                                                     $    5,409        $    4,382        $    3,400
Wholesale operations                                                         211               205                60
Corporate                                                                      1                 1                 1
                                                                      ----------        ----------        ----------
Total depreciation and amortization expense                           $    5,621        $    4,588        $    3,461
                                                                      ==========        ==========        ==========

Inventory
Retail operations                                                     $   19,397        $   14,353        $   13,323
Wholesale operations                                                       2,484             2,775             3,642
                                                                      ----------        ----------        ----------
Total inventory                                                       $   21,881        $   17,128        $   16,965
                                                                      ==========        ==========       ===========

Net fixed assets
Retail operations                                                     $   42,230        $   25,993        $   24,736
Wholesale operations                                                         835               898               471
Corporate                                                                      1                 2                 2
                                                                      ----------        ----------        ----------
Total net fixed assets                                                $   43,066        $   26,893        $   25,209
                                                                      ==========        ==========        ==========

Capital expenditures
Retail operations                                                     $   21,373        $    5,640        $   11,935
Wholesale operations                                                         148               632                45
                                                                      ----------        ----------        ----------
Total capital expenditures                                            $   21,521        $    6,272        $   11,980
                                                                      ==========        ==========        ==========
</TABLE>


                                      F-13

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)


8. Profit-Sharing Plan

     The Company has a profit-sharing plan that covers all employees who are at
least 18 years of age and have completed at least one thousand hours of service.
Plan contributions are at the discretion of management but may not exceed 15% of
qualified employee earnings.

     A contribution of $198 was made by the Company for the fiscal year ended
January 31, 1999; no contributions were made by the Company for the fiscal years
ended January 31, 1998 or January 31, 1997.


9. Income Taxes

         Income tax expense consists of:


<TABLE>
<CAPTION>

                                                                  Fiscal Year Ended January 31,
                                                         ------------------------------------------------
                                                           1999                1998                1997
                                                         --------            --------            --------
<S>                                                      <C>                 <C>                 <C>     
Current:
  Federal...................................             $  9,069            $  8,433            $  8,041
  State and local ..........................                1,955               2,106               2,073
  Foreign...................................                  489                  --                  --
Deferred:                                                                              
  Federal...................................                (494)               (499)               (613)
  State and local...........................                 (98)                (32)                (92)
  Foreign ..................................                   31               (263)                  --
                                                         --------            --------            --------
Total.......................................             $ 10,952            $  9,745            $  9,409
                                                         ========            ========            ========
</TABLE>


                                      F-14

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)

     The effective tax rate was different than the statutory U.S. federal income
tax rate for the following reasons:

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended January 31,
                                                                    ---------------------------------------
                                                                    1999              1998             1997
                                                                    ----              ----             ----
<S>                                                                  <C>               <C>              <C>
Expected provision
   at federal statutory rate..........................               35%               35%              35%
State and local income taxes,
   net of federal tax benefit, and other..............                6                 6                7
                                                                     ---               ---              ---
Effective rate........................................               41%               41%              42%
                                                                     ===               ===              ===
</TABLE>



         The significant components of deferred tax assets and liabilities at
January 31, 1999 and 1998 are as follows:


<TABLE>
<CAPTION>


                                                                                  1999            1998
                                                                               ----------       ---------
<S>                                                                             <C>             <C>       
Deferred tax liability:
  Prepaid expenses....................................                          $    (303)      $    (242)

Deferred tax assets:
  Depreciation and lease transactions.................                              2,640           2,221
  Inventory...........................................                              1,687           1,328
  Accounts receivable.................................                                461             533
  Loss carryforwards..................................                                232             263
  Accrued salaries and benefits.......................                                 91             145
  Other...............................................                                 16              15
                                                                               ----------       ---------

Net deferred tax assets...............................                         $    4,824       $   4,263
                                                                               ==========       =========
</TABLE>



     At January 31, 1999, the Company had net operating loss carry forwards for
tax purposes of approximately $750 in the United Kingdom that do not expire. At
January 31, 1999 and 1998, a deferred tax asset of $2,900 and $2,334,
respectively, is included in Other assets.

     The cumulative amount of the Company's share of undistributed earnings of
non-U.S. subsidiaries for which no deferred taxes have been provided was $804 as
of January 31, 1999. These earnings are deemed to be permanently reinvested to
finance growth programs.

                                      F-15

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



10. Leases

     The Company leases its stores and certain warehouse space under
noncancelable operating leases. The following is a schedule by year of the
future minimum lease payments for operating leases with terms in excess of one
year:


Fiscal Year
- -----------
2000..................................................        $  15,686
2001..................................................           15,960
2002..................................................           15,913
2003..................................................           15,118
2004..................................................           14,178
Thereafter............................................           62,650
                                                              ---------
Total minimum lease payments..........................        $ 139,505
                                                              =========

     Certain store leases provide for predetermined escalations in future
minimum annual rentals. The pro rata portion of future minimum rent escalations,
amounting to $3,856 and $3,095, at January 31, 1999 and 1998, respectively, has
been included in Other liabilities in the accompanying consolidated balance
sheets. Subsequent to year end, the Company entered into leases for additional
locations. Commitments related to these leases are included in the above.

     The store leases provide for payment of direct operating costs including
real estate taxes. Certain store leases provide for contingent rentals when
sales exceed specified levels.

     Rent expense consisted of the following:


<TABLE>
<CAPTION>

                                                    Fiscal Year Ended January 31,
                                              ------------------------------------------
                                                1999             1998              1997
                                              -------           -------          -------
<S>                                           <C>               <C>              <C>    
    Minimum rentals................           $14,110           $11,631          $ 9,946
    Contingent rentals.............               484               380              599
                                              -------           -------          -------
           Total...................           $14,594           $12,011          $10,545
                                              =======           =======          =======
</TABLE>



     During the year ended January 31, 1999, the Company entered into a
three-year capitalized lease for certain computer equipment. The capital lease
obligation of $273 was recorded as a liability, and the offsetting asset is
being amortized over the lease period. Remaining principal payments for the next
three fiscal years are $88, $91 and $94, respectively.

                                      F-16

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued


11. Contingencies

     The Company is party to various legal proceedings arising from normal
business activities. Management believes that the ultimate resolution of these
matters will not have an adverse material effect on the Company's financial
condition or results of operations.


12. Stock Option Plans

     The 1997 Stock Option Plan authorizes up to an aggregate of 1,250,000
common shares which can be granted as either incentive stock options or
nonqualified stock options. The vesting period for this Plan can range from one
to ten years. This 1997 Plan replaced the previous 1987, 1992 and 1993 Plans
which were precluded from making additional grants due either to expiration or
insufficiently available shares. Individual grants outstanding under certain of
the superseded plans, however, have expiration dates which extend into the year
2008.

     The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). Accordingly, no compensation cost has been
recognized for the stock option plans. Had compensation cost for the Company's
four stock option plans been determined based on the fair value provisions of
SFAS No. 123 at the grant date for awards during Fiscal 1999, 1998 and 1997, the
Company's net earnings and earnings per share would have been reduced to the pro
forma amounts indicated below:


<TABLE>
<CAPTION>

                                                                             For the year ended January 31,
                                                                       ------------------------------------------
                                                                          1999            1998              1997 
                                                                       -------          -------           -------
<S>                                                                    <C>              <C>               <C>    
Net income - as reported                                               $15,760          $13,880           $13,260
Net income - pro forma                                                 $14,412          $12,693           $12,649
Net income per share - assuming dilution - as reported                 $  0.88          $  0.78           $  0.75
Net income per share - assuming dilution - pro forma                   $  0.80          $  0.72           $  0.72

</TABLE>



     The pro forma results may not be representative of the effects on reported
operations for future years.

                                      F-17

<PAGE>

Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions:


<TABLE>
<CAPTION>

                                                        1999                         1998                   1997 
                                                       ------                       -----                  ------
<S>                                                      <C>                          <C>                    <C>
         Expected life (years)                           7.0                          6.7                    5.7
         Risk-free interest rate                         5.8%                         6.9%                   6.1%
         Volatility                                     50.0%                        50.7%                  49.5%
         Dividend rate                                     0%                           0%                     0%
</TABLE>



     Information regarding these option plans for Fiscal 1999, 1998, and 1997 is
as follows:


<TABLE>
<CAPTION>
                                                      FY 1999                      FY 1998                      FY 1997
                                           --------------------------   -------------------------    ---------------------------
                                                             Weighted                    Weighted                       Weighted
                                                              Average                     Average                       Average
Fixed Options                                Shares      Exercise Price    Shares     Exercise Price    Shares       Exercise Price
- -------------                              ------------      -------    ------------      -------    -------------      --------
<S>                                           <C>            <C>           <C>            <C>           <C>             <C>     
Options outstanding at beginning
  of year                                     1,305,094      $ 10.60       1,010,756      $  9.50       1,274,582       $   5.99
Options granted                                 545,500        15.10         415,000        11.54         185,000          15.02
Options exercised                              (157,594)        4.37        (120,662)        4.62        (448,326)          1.80
Options canceled                                (10,500)       12.61              --          n/a            (500)         15.19
                                           ------------      -------    ------------      -------    -------------      --------
Options outstanding at end of year           1,682,5000      $ 12.63       1,305,094      $ 10.60       1,010,756       $   9.50
                                           ============      =======    ============      =======    ============       ========
Options exercisable at end of year              614,999                      603,426                      472,920
                                           ============                 ============                 ============
Weighted average fair value of grants
  per share                                $       8.49                 $       6.89                 $       7.99
                                           ============                 ============                 ============
</TABLE>





     The following table summarizes information concerning currently outstanding
and exercisable options:


<TABLE>
<CAPTION>

                                          Options Outstanding                                    Options Exercisable
                         --------------------------------------------------                -------------------------------
                            Amount              Wtd. Avg.         Wtd. Avg.                  Amount              Wtd. Avg.
   Range of              Outstanding            Remaining         Exercise                 Exercisable           Exercise
Exercise Prices          at 1/31/99          Contractual Life      Price                    at 1/31/99             Price
- ---------------          -----------         ----------------     ---------                -----------           ---------
<S>                        <C>                      <C>           <C>                        <C>                   <C>   
$ 8.35 - $10.44            227,000                  1.9           $9.19                      160,332               $ 9.27
$10.44 - $12.53            737,000                  4.9           $11.00                     320,000               $11.15
$12.53 - $14.61            350,000                  9.7           $14.02                      40,000               $13.25
$14.61 - $16.70            243,500                  7.5           $15.92                      52,667               $15.34
$16.70 - $20.88            125,000                  8.6           $18.25                      42,000               $20.72

</TABLE>


                                      F-18

<PAGE>



Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



13. Net Income Per Share

     The following is a reconciliation of the denominators of the net income per
share and net income per share -- assuming dilution ("EPS") computations:


<TABLE>
<CAPTION>

                                                            Fiscal Year Ended January 31,
                                                                     (in shares)
                                                   -----------------------------------------------
                                                      1999              1998               1997
                                                   ----------        ----------         ----------

<S>                                                <C>               <C>                <C>       
Net income per share...............                17,702,922        17,576,203         17,429,375
Effect of dilutive options.........                   226,187           267,670            293,254
                                                   ----------        ----------         ----------

Net income per share -                             17,929,109        17,843,873         17,722,629
   assuming dilution                               ==========        ==========         ==========

</TABLE>


     Options to purchase 40,000 shares at $20.88 per share and 10,000 at $17.69
per share were outstanding during Fiscal 1999, but were not included in the
computation of diluted EPS because the options' exercise price was greater than
the average market price of the common shares.

     Options to purchase 40,000 shares at $20.88 per share, 10,000 shares at
$17.69 per share, 35,000 shares at $16.88 per share and 69,500 shares at $15.19
per share were outstanding during Fiscal 1998, but were not included in the
computation of diluted EPS because the options' exercise price was greater than
the average market price of the common shares.


14. Accumulated Other Comprehensive Income (Loss)

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130") that the Company adopted in the first quarter of Fiscal 1999. SFAS No.
130 requires presentation of comprehensive income and its components in the
financial statements. Comprehensive income includes charges and credits to
equity that are not the result of transactions with shareholders. Comprehensive
income is comprised of two subsets - net income and other comprehensive income.
All amounts in Accumulated Other Comprehensive Income (Loss) relate to foreign
currency translation adjustments. The foreign currency translation adjustments
are not adjusted for income taxes since these adjustments related to indefinite
investments in non-U.S. subsidiaries.

                                      F-19

<PAGE>


Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)



15. Supplemental Cash Flow Information


<TABLE>
<CAPTION>

                                                                          Fiscal year ended January 31,
                                                                      -----------------------------------------
                                                                        1999             1998             1997
                                                                      -------          -------          -------
<S>                                                                   <C>              <C>              <C>    
Cash paid during the year for:
   Interest.................................................          $     6          $    29          $    28
   Income taxes.............................................          $ 8,843          $ 9,668          $ 8,260

</TABLE>



16. Stock Split

     During 1996, the Board of Directors declared a two-for-one stock split in
the form of a stock dividend for shareholders of record on June 1, 1996.


17. Investment in HMB Publishing, Inc.

     On February 5, 1998 the Company entered into an agreement with HMB
Publishing, Inc. ("HMB") for the purchase of securities convertible into a
minority interest in the company through Series B Convertible Preferred Stock
("Series B Preferred") and certain convertible debentures. The agreement called
for additional investments and ownership if HMB met certain performance
milestones. HMB is a development stage company that publishes mXg(TM), a
combination magazine and catalog and operates a website - www.mXgonline.com -
that caters to teenage girls. The original business plan contemplated
substantial losses in the first two fiscal years and a public offering as soon
as feasible.

     As of January 31, 1999, the Company has invested approximately $2,000 in
the Series B Preferred and an additional $1,750 in the convertible debentures.
Since January 31, 1999, the Company has advanced an additional $1,100 to fund
further marketing efforts and additional development of the website and,
together with additional investors, will seek to position HMB for more rapid
expansion. It is the Company's intent to maintain an equity interest following
any public offering by HMB.

                                      F-20


<PAGE>


Urban Outfitters, Inc.
Notes to Consolidated Financial Statements (continued)


18. Subsequent Event

     In accordance with its previously announced stock buyback program that
authorized the Company to repurchase up to 800,000 of its shares, the Company
has repurchased 279,000 shares of its common stock at a cost of $3,729 during
the period from February 1, 1999 through March 12, 1999 in a series of
individual open market transactions.

                                      F-21

<PAGE>


                          FINANCIAL STATEMENT SCHEDULES
                             URBAN OUTFITTERS, INC.
 
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)



<TABLE>
<CAPTION>

                                                                       Charged
                                                  Balance at           to costs                            Balance
                                                  beginning              and                               at end
         Description                              of period            expenses       Deductions          of period
         -----------                              ----------           --------       ----------          ---------
<S>                                                 <C>                 <C>             <C>                 <C>   
Year ended January 31, 1997
  Inventory reserves                                $2,211              $2,471          $1,956              $2,726

Year ended January 31, 1998
  Inventory reserves                                $2,726              $2,190          $2,144              $2,772

Year ended January 31, 1999
  Inventory reserves                                $2,772              $3,081          $2,633              $3,220

</TABLE>


                                                        S-1







                                  Exhibit 21.1

                              LIST OF SUBSIDIARIES


Inter-Urban, Inc.,
a Delaware corporation

U.O. Fenwick, Inc.,
a Delaware corporation

U.O.D., Inc.,
a Delaware corporation

Anthropologie, Inc.,
a Pennsylvania corporation

Urban Outfitters Wholesale, Inc.,
a Pennsylvania corporation

Urban Outfitters UK, Limited,
a United Kingdom corporation

Urban Outfitters Canada, Inc.
a Canadian corporation








Urban Outfitters, Inc.                                                EXHIBIT 22
INCOME PER SHARE CALCULATION:
JANUARY 31, 1999 & 1998


INCOME PER SHARE CALCULATION:


<TABLE>
<CAPTION>
                                          Three Months Ended January 31,                   
                               -----------------------------------------------------  
                                       1999                        1998                 
                               -------------------------  --------------------------  
<S>                            <C>          <C>           <C>            <C> 
                                   $         Per Share       $            Per Share   
NET INCOME                     5,185,000         $0.29    3,819,000           $0.21
                               =========    ==========    =========      ==========   
 
WEIGHTED AVERAGE COMMON
   SHARES & COMMON SHARE
   EQUIVALENTS OUTSTANDING                  17,810,417                   17,967,161
                                            ==========                   ==========   
</TABLE>

                                     


<TABLE>
<CAPTION>
                                          Twelve Months Ended January 31,                      
                               --------------------------------------------------------
                                         1999                        1998                   
                               --------------------------   ---------------------------
                                     $         Per Share         $            Per Share
<S>                             <C>                <C>       <C>              <C>
NET INCOME                      15,760,000         $0.88     13,880,000           $0.78
                                ==========    ==========     ==========      ==========
 
WEIGHTED AVERAGE COMMON
   SHARES & COMMON SHARE
   EQUIVALENTS OUTSTANDING                    17,929,109                     17,843,873
                                              ==========                     ==========                             
</TABLE>







COMPUTATION OF COMMON SHARES
    & COMMON SHARE EQUIVALENTS OUTSTANDING:


<TABLE>
<CAPTION>
                                                           Three Months Ended January 31,                             
                                       ---------------------------------------------------------------------       
                                                    1999                                 1998                       
                                       -------------------------------     ---------------------------------       
                                       End of Period      Weighted Ave.    End of Period        Weighted Ave.      
                                       -------------     -------------     --------------      -------------       
<S>                                    <C>               <C>               <C>                 <C>
COMMON SHARES OUTSTANDING                17,639,754         17,632,859       17,649,360           17,646,288
                                                            ----------                            ----------       

COMMON SHARE EQUIVALENTS:
         OPTIONS                          1,682,500          1,547,884        1,305,094            1,311,440       
         ASSUMED REPURCHASED
                AT AVERAGE PRICE                            (1,370,326)                             (990,567)
                                                            ----------                             ---------      

WEIGHTED AVERAGE COMMON
    EQUIVALENTS                                                177,558                               320,873
                                                            ----------                             ---------       

TOTAL WEIGHTED AVERAGE
   COMMON SHARES & COMMON
   SHARE EQUIVALENTS OUTSTANDING                            17,810,417                            17,967,161
                                                            ==========                            ==========       

</TABLE>







<TABLE>
<CAPTION>

                                                                Twelve Months Ended January 31,                       
                                           -------------------------------------------------------------------
                                                       1999                                  1998                   
                                           -------------------------------     --------------------------------
                                           End of Period     Weighted Ave.     End of Period      Weighted Ave.
                                           -------------     -------------     --------------     ------------
<S>                                        <C>               <C>              <C>                 <C>
COMMON SHARES OUTSTANDING
                    17,639,754        17,702,922        17,649,360         17,576,203
                                                             ------------                          -----------

COMMON SHARE EQUIVALENTS:
         OPTIONS                              1,682,500         1,616,973         1,305,094          1,368,167
         ASSUMED REPURCHASED
                AT AVERAGE PRICE                               (1,390,786)                          (1,100,497)
                                                              -----------                          ----------- 

WEIGHTED AVERAGE COMMON
    EQUIVALENTS                                                   226,187                              267,670
                                                               ----------                           ----------

TOTAL WEIGHTED AVERAGE
   COMMON SHARES & COMMON
   SHARE EQUIVALENTS OUTSTANDING                               17,929,109                           17,843,873
                                                               ==========                           ==========
</TABLE>






                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-33603 and 33-75522) of Urban Outfitters, Inc.
of our report dated March 12, 1999 appearing on page F-2 of this Form 10-K.


PricewaterhouseCoopers LLP


Philadelphia, Pennsylvania
April 19, 1999









<TABLE> <S> <C>


<ARTICLE>                     5
<MULTIPLIER>                                     1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JAN-31-1999
<PERIOD-END>                               JAN-31-1999
<CASH>                                          25,165
<SECURITIES>                                    13,032
<RECEIVABLES>                                    4,824
<ALLOWANCES>                                         0
<INVENTORY>                                     21,881
<CURRENT-ASSETS>                                71,555
<PP&E>                                          43,066
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 133,363
<CURRENT-LIABILITIES>                           24,028
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                             2
<OTHER-SE>                                     105,294
<TOTAL-LIABILITY-AND-EQUITY>                   133,363
<SALES>                                        208,969
<TOTAL-REVENUES>                               208,969
<CGS>                                          129,625
<TOTAL-COSTS>                                  129,625
<OTHER-EXPENSES>                                54,227
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              (2,126)
<INCOME-PRETAX>                                 26,712
<INCOME-TAX>                                    10,952
<INCOME-CONTINUING>                             15,760
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    15,760
<EPS-PRIMARY>                                      .89
<EPS-DILUTED>                                      .88
        


</TABLE>