# Urban Outfitters Inc: Form 10-Q for the period ended Apr 30, 2024

- Company: [Urban Outfitters Inc](/companies/urbn.md) (CIK 912615)
- Form: 10-Q
- Filed: 2024-06-10
- Accepted by EDGAR: Jun 10, 2024, 16:24 ET
- Period: 2024-04-30
- Accession: 0000950170-24-071322
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/912615/000095017024071322/urbn-20240430.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/912615/000095017024071322/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-04-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-02-01 to 2024-04-30 | $1.20bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-02-01 to 2024-04-30 | $787.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-02-01 to 2024-04-30 | $408.4m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-02-01 to 2024-04-30 | $333.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-02-01 to 2024-04-30 | $74.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-02-01 to 2024-04-30 | $19.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-02-01 to 2024-04-30 | $61.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-02-01 to 2024-04-30 | $0.65 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-02-01 to 2024-04-30 | $0.66 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-02-01 to 2024-04-30 | 95,000,706 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-02-01 to 2024-04-30 | $58.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-02-01 to 2024-04-30 | $41.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-04-30 | $174.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-04-30 | $1.37bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-04-30 | $4.19bn | us-gaap:Assets |
| Current liabilities | at 2024-04-30 | $1.03bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-04-30 | $2.03bn | us-gaap:Liabilities |
| Shareholders' equity | at 2024-04-30 | $2.16bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 29,574 characters.

*Certain matters contained in this filing with the United States Securities and Exchange Commission (“SEC”) may contain forward-looking statements and are being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 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: overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom's withdrawal from membership in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war, including geopolitical instability, impacts of the conflict in the Middle East and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises (such as the coronavirus (COVID-19)), labor shortages and increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs, border adjustment taxes or increases in duties or quotas), the unexpected closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the SEC, including those set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed on April 1, 2024. We disclaim any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.*

*Unless the context otherwise requires, all references to the “Company,” “we,” “us” or “our” refer to Urban Outfitters, Inc., together with its subsidiaries.*

### Overview

We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment includes our Anthropologie, Free People, FP Movement and Urban Outfitters brands. Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers and franchisee-owned stores. Our Wholesale segment includes our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment. Our Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Nuuly segment includes the Nuuly brand, which offers customers a more sustainable way to explore fashion through a monthly women’s apparel subscription rental service.

Our fiscal year ends on January 31. All references to our fiscal years refer to the fiscal years ended on January 31 in those years. For example, our fiscal year 2025 will end on January 31, 2025, and our fiscal year 2024 ended on January 31, 2024.

As used in this document, unless otherwise defined, "Anthropologie" refers to our Anthropologie and Terrain brands and "Free People" refers to our Free People and FP Movement brands.

#### Retail Segment

Our Retail segment omni-channel strategy enhances our customers’ brand experience by providing a seamless approach to the customer shopping experience. All Company-owned Retail segment shopping channels are closely integrated, including retail locations, websites, mobile applications, catalogs and customer contact centers. Our investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the Retail segment omni-channel and not the separate store or digital channels. We manage and analyze our performance based on a single Retail segment omni-channel rather than separate channels and believe that the Retail segment omni-channel results present the most meaningful and appropriate measure of our performance.

Our comparable Retail segment net sales data is equal to the sum of our comparable store and comparable digital channel net sales. A store is considered to be comparable if it has been open at least 12 full months, unless it was materially expanded or remodeled within that year or was not otherwise operating at its full capacity within that year due to store specific closures from events such as damage from fire, flood and natural weather events. A digital channel is considered to be comparable if it has been operational for at least 12 full months. Sales from stores and digital channels that do not fall within the definition of comparable store or digital channel are considered to be non-comparable. Franchise net sales and the effects of foreign currency translation are also considered non-comparable.

We monitor Retail segment metrics including customer traffic, conversion rates and average units per transaction at our stores and on our websites and mobile applications. We also monitor average unit selling price and transactions at our stores and average order value on our websites and mobile applications. We believe that changes in any of these metrics may be caused by a response to our brands’ fashion offerings, our marketing campaigns, circulation of our catalogs and an overall growth in brand recognition.

Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, social media and third-party digital platforms, websites and mobile applications and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. Urban Outfitters’ North American Retail segment net sales accounted for approximately 14.8% of consolidated net sales for the three months ended April 30, 2024, compared to approximately 19.2% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 7.3% of consolidated net sales for the three months ended April 30, 2024, compared to approximately 8.0% for the comparable period in fiscal 2024.

The Anthropologie brand tailors its merchandise to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party branded product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. Anthropologie stores are located in specialty centers, upscale street locations and enclosed malls. Anthropologie operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers catalogs in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East. Anthropologie's North American Retail segment net sales accounted for approximately 42.3% of consolidated net sales for the three months ended April 30, 2024, compared to approximately 41.0% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.5% of consolidated net sales for both the three months ended April 30, 2024, and the comparable period in fiscal 2024.

The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides a unique merchandise mix of casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People stores are located in enclosed malls, upscale street locations and specialty centers. Free People operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all of the Free People and FP Movement wholesale offerings. Free People also offers catalogs that market select merchandise, most of which is also available in our Free People stores. Free People's North American Retail segment net sales accounted for approximately 20.9% of consolidated net sales for the three months ended April 30, 2024, compared to approximately 19.0% for the comparable period in fiscal 2024. European Retail segment net sales accounted for approximately 1.0% of consolidated net sales for the three months ended April 30, 2024, compared to less than 1.0% for the comparable period in fiscal 2024.

Net sales from the Retail segment accounted for approximately 88.5% of consolidated net sales for the three months ended April 30, 2024, compared to 90.2% for the comparable period in fiscal 2024.

Store data for the three months ended April 30, 2024 was as follows:

| Urban Outfitters | January 31, 2024 | Stores Opened | Stores Closed | April 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| United States | 179 | 2 | (2) | 179 |
| Canada | 17 | — | — | 17 |
| Europe | 66 | 2 | — | 68 |
| **Urban Outfitters Global Total** | **262** | **4** | **(2)** | **264** |
| **Anthropologie** |  |  |  |  |
| United States | 209 | 2 | (1) | 210 |
| Canada | 9 | — | — | 9 |
| Europe | 19 | — | — | 19 |
| **Anthropologie Global Total** | **237** | **2** | **(1)** | **238** |
| **Free People Brand** |  |  |  |  |
| United States | 145 | 1 | (1) | 145 |
| Canada | 3 | — | — | 3 |
| Europe | 12 | — | — | 12 |
| **Free People Brand Global Total** | **160** | **1** | **(1)** | **160** |
| **FP Movement Brand** |  |  |  |  |
| United States | 38 | 1 | — | 39 |
| **FP Movement Brand Global Total** | **38** | **1** | **—** | **39** |
| **Free People** |  |  |  |  |
| United States | 183 | 2 | (1) | 184 |
| Canada | 3 | — | — | 3 |
| Europe | 12 | — | — | 12 |
| **Free People Global Total** | **198** | **2** | **(1)** | **199** |
| **Menus & Venues (1)** |  |  |  |  |
| United States | 9 | — | — | 9 |
| **Menus & Venues Total** | **9** | **—** | **—** | **9** |
| **Total Company-Owned Stores** | **706** | **8** | **(4)** | **710** |
| **Franchisee-Owned Stores (2)** | 9 | — | — | 9 |
| **Total URBN** | **715** | **8** | **(4)** | **719** |

(1) Menus & Venues includes various casual restaurants and event venues.

(2) Franchisee-owned stores are located in the Middle East.

Selling square footage by brand as of April 30, 2024 and 2023 was as follows:

| Selling square footage (in thousands): | April 30, 2024 | April 30, 2023 | Change |
| --- | ---: | ---: | ---: |
| Urban Outfitters | 2,260 | 2,249 | 0.5% |
| Anthropologie | 1,808 | 1,805 | 0.2% |
| Free People Brand | 363 | 360 | 0.8% |
| FP Movement Brand | 50 | 44 | 13.6% |
| **Total URBN (1)** | **4,481** | **4,458** | **0.5%** |

(1) Menus & Venues locations and franchisee-owned stores are not included in selling square footage.

We plan for future store growth for our brands to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements. We plan for future digital channel growth to come from expansion domestically and internationally.

Projected store openings and closings for fiscal 2025 are as follows:

|  | January 31, 2024 | Projected Openings | Projected Closings | January 31, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Urban Outfitters | 262 | 6 | (12) | 256 |
| Anthropologie | 237 | 13 | (6) | 244 |
| Free People Brand | 160 | 13 | (3) | 170 |
| FP Movement Brand | 38 | 25 | — | 63 |
| Menus & Venues | 9 | — | — | 9 |
| **Total Company-Owned Stores** | **706** | **57** | **(21)** | **742** |
| Franchisee-Owned Stores | 9 | — | — | 9 |
| **Total URBN** | **715** | **57** | **(21)** | **751** |

#### Wholesale Segment

Our Wholesale segment includes the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People and FP Movement brands and the BDG and “iets frans” apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately 5.0% of consolidated net sales for the three months ended April 30, 2024, compared to 5.2% for the comparable period in fiscal 2024.

#### Nuuly Segment

Our Nuuly segment includes the Nuuly brand, which is a monthly women’s apparel subscription rental service. For a monthly fee, Nuuly subscribers can rent product from a wide selection of the Company’s own brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase the rented product. Our Nuuly segment net sales accounted for approximately 6.5% of consolidated net sales for the three months ended April 30, 2024, compared to approximately 4.6% for the comparable period in fiscal 2024.

### Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States. These generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period.

Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended January 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on April 1, 2024. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates. There have been no significant changes to our critical accounting policies during the three months ended April 30, 2024.

### Results of Operations

#### As a Percentage of Net Sales

The table below sets forth, for the periods indicated, certain income statement data and the percentage of our net sales represented by such data. The table should be read in conjunction with the discussion that follows.

### Three Months Ended April 30, 2024 (Fiscal 2025) Compared To

### Three Months Ended April 30, 2023 (Fiscal 2024)

*(amounts in millions)*

|  | Three Months Ended April 30, 2024 |  | 2023 |  |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $1,200.7 | 100.0% | $1,113.7 | 100.0% |
| Cost of sales (excluding store impairment and lease abandonment charges) | 787.7 | 65.6 | 742.5 | 66.7 |
| Store impairment and lease abandonment charges | 4.6 | 0.4 | — | — |
| Gross profit | 408.4 | 34.0 | 371.2 | 33.3 |
| Selling, general and administrative expenses | 333.8 | 27.8 | 299.8 | 26.9 |
| Income from operations | 74.6 | 6.2 | 71.4 | 6.4 |
| Other income, net | 6.3 | 0.5 | 1.0 | 0.1 |
| Income before income taxes | 80.9 | 6.7 | 72.4 | 6.5 |
| Income tax expense | 19.1 | 1.6 | 19.6 | 1.8 |
| Net income | $61.8 | 5.1% | $52.8 | 4.7% |

Net sales for the first quarter of fiscal 2025 were $1.20 billion, compared to $1.11 billion in the first quarter of fiscal 2024. The $87.1 million increase was attributable to a $58.6 million, or 5.8%, increase in Retail segment net sales, a $26.5 million, or 51.4%, increase in Nuuly segment net sales and a $2.0 million, or 3.4%, increase in Wholesale segment net sales.

The increase in our Retail segment net sales during the first quarter of fiscal 2025 was due to an increase of $44.9 million, or 4.6%, in Retail segment comparable net sales, and an increase of $13.7 million in non-comparable net sales. Retail segment comparable net sales increased 17.1% at Free People and 10.4% at Anthropologie and decreased 13.7% at Urban Outfitters. Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel net sales and low single-digit positive growth in retail store net sales. The digital channel comparable net sales increase was driven by increases in sessions, while average order value, conversion rate and units per transaction decreased. Comparable store net sales increased as a result of higher store traffic, transactions and conversion rate, which were partially offset by decreases in average unit retail and units per transaction. The increase in non-comparable net sales during the first quarter of fiscal 2025 was primarily due to the impact of the 10 net new

Company-owned stores and restaurants opened since the prior comparable period and the positive impact of foreign currency translation.

The increase in Nuuly segment net sales was primarily driven by a 44.8% increase in the average number of active subscribers in the first quarter of fiscal 2025 as compared to the first quarter of fiscal 2024. The increase in Wholesale segment net sales in the first quarter of fiscal 2025, as compared to the first quarter of fiscal 2024, was primarily due to a $3.3 million, or 6.3%, increase in Free People wholesale net sales, partially offset by a $1.3 million decrease in Urban Outfitters wholesale net sales. The increase in Free People wholesale net sales was due to an increase in net sales to department stores and specialty customers.

Gross profit percentage for the first quarter of fiscal 2025 increased to 34.0% of net sales from 33.3% of net sales in the first quarter of fiscal 2024. Gross profit increased to $408.4 million in the first quarter of fiscal 2025 from $371.2 million in the first quarter of fiscal 2024. The increase in gross profit rate was primarily due to higher initial merchandise markups for all brands, primarily driven by Company initiatives, and was partially offset by higher merchandise markdowns, primarily at the Urban Outfitters brand, and a deleverage in logistics expenses. The deleverage in logistics expenses was primarily driven by the increase in the percentage of total Company net sales represented by Nuuly segment net sales, as well as transition and start-up expenses related to the additional Nuuly fulfillment facility that opened during the first quarter of fiscal 2025. The increase in gross profit dollars was due to higher net sales and the improved gross profit rate. Additionally, the Company recorded store impairment and lease abandonment charges of $4.6 million, or 38 basis points, during the first quarter of fiscal 2025.

Total inventory at April 30, 2024, as compared to April 30, 2023, decreased by $11.3 million, or 1.9%, to $579.0 million. Total Retail segment inventory decreased by 2.3%, while Retail segment comparable inventory decreased by 4.7%. Wholesale segment inventory increased by 2.1%.

Selling, general and administrative expenses increased by $33.9 million, or 11.3%, in the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024. Selling, general and administrative expenses as a percentage of net sales increased in the first quarter of fiscal 2025 to 27.8% of net sales, compared to 26.9% of net sales for the first quarter of fiscal 2024. The deleverage in selling, general and administrative expenses as a percentage of net sales was primarily related to the Urban Outfitters brand being unable to reduce expenses at the same rate as net sales. The dollar growth in selling, general and administrative expenses was primarily related to increased marketing expenses to support double-digit customer traffic growth and increased net sales at the Free People, FP Movement, Anthropologie and Nuuly brands and increased store payroll expenses to support the retail store net sales comparable sales growth.

Income from operations was 6.2% of net sales, or $74.6 million, for the first quarter of fiscal 2025 compared to 6.4% of net sales, or $71.4 million, for the first quarter of fiscal 2024. The increase in operating income dollars was primarily driven by the improved gross profit. The decrease in operating income rate was primarily due to the store impairment and lease abandonment charges of $4.6 million, or 38 basis points, during the first quarter of fiscal 2025.

Our effective tax rate for the first quarter of fiscal 2025 was 23.6% compared to 27.1% in the first quarter of fiscal 2024. The decrease in the effective tax rate for the three months ended April 30, 2024 was primarily due to the favorable impact of equity activity in the current year quarter.

### Liquidity and Capital Resources

The following tables set forth certain balance sheet and cash flow data for the periods indicated. These tables should be read in the conjunction with the discussion that follows:

*(amounts in millions)*

|  | April 30, 2024 | January 31, 2024 | April 30, 2023 |
| --- | ---: | ---: | ---: |
| Cash, cash equivalents and marketable securities | $773.7 | $779.2 | $467.6 |
| Working capital | 339.5 | 288.3 | 373.6 |

|  | April 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $58.6 | $36.3 |
| Net cash used in by investing activities | (45.8) | (57.5) |
| Net cash used in financing activities | (15.3) | (8.3) |

The increase in working capital as of April 30, 2024, as compared to January 31, 2024, was primarily due to an increase in cash, cash equivalents and marketable securities and the timing of receivables and disbursements. The decrease in working capital as of April 30, 2024, as compared to April 30, 2023, was primarily due to the timing of disbursements, partially offset by the increase in cash, cash equivalents and marketable securities.

During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating activities. Our primary uses of cash have been to fund business operations, purchase inventory and rental product, expand and improve our fulfillment centers and open new stores.

#### Cash Flows from Operating Activities

Our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The increase in cash provided by operating activities in the first three months of fiscal 2025 compared to the first three months of fiscal 2024 was primarily due to higher net income and non-cash operating activity.

#### Cash Flows from Investing Activities

Cash used in investing activities in the first three months of fiscal 2025 primarily related to purchases of marketable securities and property and equipment, partially offset by the sales and maturities of marketable securities. Cash used in investing activities in the first three months of fiscal 2024 primarily related to purchases of marketable securities, property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash paid for property and equipment in the first three months of fiscal 2025 and 2024 was $41.1 million and $32.9 million, respectively, which was primarily used to expand our fulfillment center network and store base in both periods.

#### Cash Flows from Financing Activities

Cash used in financing activities in the first three months of fiscal 2025 and fiscal 2024 primarily related to repurchases of our common shares from employees to meet payroll tax withholding requirements on vested share-based awards.

#### Credit Facilities

See Note 5, “Debt,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s debt.

#### Capital and Operating Expenditures

During fiscal 2025, we plan to open approximately 57 new Company-owned retail locations, expand or relocate certain existing retail locations, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales volumes, upgrade our systems, improve and expand our digital capabilities and invest in omni-channel marketing when appropriate. We may also repurchase common shares. Additionally, in the first quarter of fiscal 2025, we opened a new Nuuly fulfillment center in Raymore, Missouri in response to the growth in the number of Nuuly subscribers. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales growth and plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal 2025 to be approximately $210 million, primarily to support new store openings and new and expanded fulfillment and distribution centers. All fiscal 2025 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents. We believe that our new store investments generally have the potential to generate positive cash flow within a year. We may also enter into one or more acquisitions or transactions related to the expansion of our brand offerings, including additional franchise and joint venture agreements. We believe that our existing cash and cash equivalents, availability under our current credit facilities and future cash flows provided by operations will be sufficient to fund these initiatives.

#### Share Repurchases

See Note 8, “Shareholders’ Equity,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s share repurchases.

### Other Matters

See Note 1, “Basis of Presentation,” *Recent Accounting Pronouncements*, of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements.

## Market risk

As filed, 250 characters.

There have been no material changes to our quantitative or qualitative disclosures found in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

## Controls and procedures

As filed, 1,244 characters.

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in our Securities Exchange Act of 1934 reports is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of these disclosure controls and procedures. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that our disclosure controls and procedures were effective.

There have been no changes in our internal controls over financial reporting during the three months ended April 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

### PART II

### OTHER INFORMATION

## Risk factors

As filed, 229 characters.

There have been no material changes in our risk factors since January 31, 2024. Please refer to our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on April 1, 2024, for our risk factors.

Filed Jun 10, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-071322. Last ingested by Listed: Nov 2, 2026, 19:14 ET. No prices; not investment advice.