URBAN OUTFITTERS, INC. Overview
We operate under three reportable segments - Retail, Wholesale and Subscription.
Our Retail segment consists of our Anthropologie, Bhldn, Free People,
Our fiscal year ends on
Impact of the Coronavirus Pandemic
On
In response to the COVID-19 pandemic, the Company has taken many additional measures to protect its financial position and increase financial flexibility during this challenging time period. Those included:
• Furloughing a substantial number of store, wholesale and home office
associates through July 31, 2020 , with some furloughs resulting in
layoffs as of the same date,
• Limiting all new hiring commensurate with the operational needs of the
Company,
• Temporarily suspending and since reinstating at a reduced value, all
performance bonuses for fiscal 2021 and delaying merit increases for five
months until September 2020 ,
• Borrowing $220.0 million under its Amended Credit Facility (as defined
herein) to further protect its cash reserves, and subsequently repaying
$100.0 million on June 17, 2020 and $120.0 million on September 16, 2020
(see Note 8, "Debt," of the Notes to our Consolidated Financial
Statements included in this Annual Report on Form 10-K for additional
information),
• Reducing fiscal 2021 capital budget by over $100 million from
approximately $260 million to approximately $160 million by delaying or
cancelling projects,
• Adjusting inventory levels by cancelling or delaying many orders, asking
for price concessions on those remaining and maintaining tighter
management of inventory overall as stores reopened,
• Reducing all discretionary expenses, including creative and travel, among
others,
• Extending payment terms for both merchandise and non-merchandise vendor
invoices by 30 days,
• Reducing certain occupancy and occupancy related expenses,
• Reducing investments in two Company growth initiatives: Nuuly and
expansion into China ,
• Temporarily reducing senior leadership compensation through September 2020 ,
• Temporarily suspending Board of Directors' cash compensation, which has
since been reinstated, and
• Temporarily suspended share repurchases during fiscal 2021 (see Note 12,
"Shareholders' Equity," of the Notes to our Consolidated Financial
Statements included in this Annual Report on Form 10-K for additional
information).
As a result of the COVID-19 pandemic, during fiscal 2021, the Company recorded certain additional reserves and non-cash charges. The Company assessed the value of its inventory in the Retail and Wholesale segments and recorded an increase in inventory obsolescence reserves during the first quarter of fiscal 2021, and as a result of disciplined inventory control and better than planned product performance, during the remainder of fiscal 2021, the Company decreased a portion of its inventory obsolescence reserves. During the first quarter of fiscal 2021, the Company recorded an increase in allowance for doubtful accounts for Wholesale segment customer accounts receivables as a result of the significant disruption and uncertainty in the wholesale macro environment, and during the remainder of fiscal 2021, the Company reduced the allowance for doubtful accounts due to the collection of certain outstanding accounts receivables. Finally, during fiscal 2021, the Company determined that certain long-lived assets at the Company's retail
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locations were unable to recover their carrying value primarily due to the
impact of the mandated store closures as a result of the COVID-19 pandemic and
lower store productivity once opened. These assets were written down to their
fair value resulting in impairment charges of
As a result of the COVID-19 pandemic, governments in
Beginning
As we have reopened stores, we have followed newly established health protocols, provided personal protective equipment to our employees, and implemented social distancing working practices. Additionally, we have implemented occupancy limits, reduced operating hours, and instituted new cleaning regimens, including enhanced cleaning of high-touch surfaces throughout the day and making hand sanitizer available to our customers and employees. As a result, the Company has incurred incremental costs for personal protective equipment and additional payroll and other costs associated with implementing these health protocols in our stores, distribution and fulfillment centers, and corporate offices. The Company has not changed its remote work arrangements for its corporate employees.
Retail Segment
Our Retail segment omni-channel strategy enhances our customers' brand experience by providing a seamless approach to the customer shopping experience. All available Company-owned Retail segment shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers. 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. The Company did not remove stores that were closed due to the COVID-19 pandemic from the comparable stores net sales calculations. 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 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, average units per transaction at our stores and on our websites and mobile applications and average unit selling price 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.
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compared to 29.5% and 7.9%, respectively, for fiscal 2020. Asian Retail segment net sales accounted for less than 1.0% of consolidated net sales for fiscal 2021 and fiscal 2020.
The Menus & Venues brand focuses on a dining experience that provides excellence in food, beverage and service. The Menus & Venues brand net sales accounted for less than 1.0% of consolidated net sales for fiscal 2021 and fiscal 2020.
Net sales from the Retail segment accounted for approximately 93.6%, 91.6% and 91.2% of total consolidated net sales for fiscal 2021, 2020 and 2019, respectively.
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Store data for fiscal 2021 was as follows:
January 31, Stores Stores January 31,
2020 Opened Closed 2021
Urban Outfitters
United States 177 5 (8 ) 174
Canada 17 - - 17
Europe 54 2 - 56
Urban Outfitters Global Total 248 7 (8 ) 247
Anthropologie Group
United States 200 5 (1 ) 204
Canada 11 - - 11
Europe 20 2 - 22
Anthropologie Group Global Total 231 7 (1 ) 237
Free People Group
United States 134 5 (1 ) 138
Canada 6 - - 6
Europe 4 1 - 5
Free People Group Global Total 144 6 (1 ) 149
Menus & Venues
United States 11 - - 11
Menus & Venues Total 11 - - 11
Total Company-Owned Stores 634 20 (10 ) 644
Franchisee-Owned Stores (1) 7 - (6 ) 1
Total URBN 641 20 (16 ) 645
(1) Franchisee-owned stores in fiscal 2021 were located in Israel and the
United Arab Emirates . The Company had agreed with its Israeli franchise
partner to end franchise store operations in Israel . The Company closed
four Urban Outfitters franchisee-owned stores, one Anthropologie Group
franchisee-owned store and one Free People franchisee-owned store in
fiscal 2021. The Company does not plan to close the franchisee-owned store
in the United Arab Emirates .
Selling square footage by brand as of
January 31, January 31,
2021 2020 Change
Selling square footage (in thousands):
Urban Outfitters 2,195 2,218 -1.0 %
Anthropologie Group 1,815 1,776 2.2 %
Free People Group 331 325 1.8 %
Total URBN (1) 4,341 4,319 0.5 %
(1) Menus & Venues restaurants and franchisee-owned stores are not included in
selling square footage.
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We plan for future store growth for all three brands to come from expansion
domestically and internationally, which may include opening stores (including
standalone
Projected openings and closings for fiscal 2022 are as follows:
January 31, Projected Projected January 31,
2021 Openings Closings 2022
Urban Outfitters 247 17 (10 ) 254
Anthropologie Group 237 12 (9 ) 240
Free People Group (1) 149 25 (2 ) 172
Menus & Venues 11 1 - 12
Total Company-Owned Stores 644 55 (21 ) 678
Franchisee-Owned Stores 1 3 - 4
Total URBN 645 58 (21 ) 682
(1) Includes 16
Wholesale Segment
Our Wholesale segment consists of the Free People,
Subscription Segment
Our Subscription segment consists of the Nuuly brand, which is a monthly women's
apparel subscription rental service that launched on
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements have been prepared in accordance with
generally accepted accounting principles in
Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies," in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K. We believe that the following discussion addresses our critical accounting policies, which 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. Other than the impact of the COVID-19 pandemic on our inventory obsolescence reserves in the Retail and Wholesale segments, the allowance for doubtful accounts on our Wholesale segment accounts receivable and the obsolescence reserves on our Subscription segment rental product, 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.
Revenue Recognition
Merchandise: Merchandise is sold through retail stores, catalogs and the digital sales channel, as well as to wholesale customers, franchise partners and subscription customers. Revenue is recognized when control of the promised goods is transferred to the customer. We have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. Accordingly, we will recognize merchandise revenue for the Retail segment for our single performance obligation at the point of sale or at the time of shipment, which is when transfer of control to the customer occurs. A Subscription segment customer may purchase merchandise in her possession that was included in the order that was delivered as part of the monthly subscription rental service. We recognize merchandise revenue for the Subscription segment for our single performance obligation when the customer purchases the merchandise
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through the website or mobile application. Revenue does not include taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. Revenue is recognized net of estimated customer returns. Retail segment return policies vary by brand, but generally provide for no time limit on returns and the refund to be issued in either the form of original payment or as a gift card. Payment for merchandise is tendered primarily by cash, check, credit card, debit card, gift card or alternative payment methods. Uncollectible accounts receivable primarily results from unauthorized credit card transactions. We maintain an allowance for doubtful accounts for our Wholesale segment accounts receivable, which we review on a regular basis and believe is sufficient to cover potential credit losses and billing adjustments. Payment terms in our Wholesale segment vary by customer with the most common being a net 30-day policy.
Menus & Venues: Revenue from restaurant sales and events is recognized upon completion of the service when we satisfy our single performance obligation. Customer deposits may be received in advance for events, which represents a contract liability until we satisfy our performance obligation.
Subscription Fees: Revenue for the Subscription segment is generated through monthly subscription fees and the purchase of merchandise in a customer's possession. The monthly subscription rental fee is recognized as revenue on the date the customer is billed. A customer may pause the monthly subscription, at which point the customer will not be billed for future months until the subscription is no longer on hold. Merchandise sales to Subscription segment customers are discussed above under Merchandise.
Gift Cards: We account for a gift card transaction by recording a liability at the time the gift card is issued to the customer in exchange for consideration from the customer. At the time of issuance, we have an open performance obligation for the future delivery of promised goods or services. The liability remains outstanding until the card is redeemed by the customer, at which time we recognize revenue. Over time, a portion of the outstanding gift cards will not be redeemed by the customer which we refer to as "breakage". Revenue is recognized from breakage over time in proportion to gift card redemptions. Judgment is used in determining the amount of breakage revenue to be recognized and is based on historical gift card redemption patterns. Gift card breakage revenue is included in net sales and is not material. Our gift cards do not expire.
Sales Return Reserve
We record a reserve for estimated product returns where the sale has occurred
during the period reported, but the return is likely to occur subsequent to the
period reported. The reserve for estimated product returns is based on our most
recent historical return trends. If the actual return rate is materially
different than our estimate, sales returns would be adjusted in the future. The
costs of returns are recorded as a current asset rather than net with the sales
return reserve liability. As of
Inventory
We value our inventory, which consists primarily of general consumer merchandise
held for sale, at the lower of cost or net realizable value. Cost is determined
on the first-in, first-out method and includes the cost of merchandise and
import-related costs, including freight, import duties and taxes and agent
commissions. A periodic review of inventory is performed in order to determine
if inventory is properly stated at the lower of cost or net realizable value.
Factors we consider in our review, such as future expected consumer demand and
fashion trends, current aging, current and anticipated retail markdowns or
wholesale discounts and class or type of inventory, are analyzed to determine
estimated net realizable value. Criteria that we consider in our review of aging
trends include average selling cycle and seasonality of merchandise, the
historical rate at which merchandise has sold below cost during the prior 12
months and the value and nature of merchandise currently held in inventory and
priced below original cost. A provision is recorded to reduce the cost of
inventory to its estimated net realizable value, if appropriate. Any significant
unanticipated changes in the factors noted above could have a significant impact
on the value of our inventory and our reported operating results. Our estimates
generally have been accurate, and our reserve methods have been applied on a
consistent basis. We expect the amount of our provision and related inventory to
increase over time as we increase our sales. The majority of inventory at
Rental Product
The cost of our Subscription segment rental product is amortized to cost of
sales based on the cost of each unit rented, which is estimated based on the
number of times the unit is expected to be rented and the cost of the rental
product. Lost, damaged and retired rental product is also charged to cost of
sales. We make assumptions as to the number of times each unit can be rented. If
the actual number of times a unit can be rented were to vary significantly from
our estimates, it could materially affect the amount of rental product
amortization included in cost of sales. Rental product represented less than
1.0% of total assets as of
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Impairment of Long-lived Assets
We review the carrying values of our definite-lived, long-lived assets whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. Events that result in an impairment review include plans to close a
retail location, distribution or fulfillment center, a significant decrease in
the operating results of a long-lived asset or significant adverse changes in
the business climate. Our retail locations are reviewed for impairment at the
retail location level, which is the lowest level at which individual cash flows
can be identified. Newly opened retail locations may take time to generate
positive operating and cash flow results. Factors such as store type (e.g., mall
versus free-standing), location (e.g., urban area versus college campus or
suburb), current marketplace awareness of our brands, local customer demographic
data and current fashion trends are all considered in determining the time frame
required for a retail location to achieve positive financial results. When
events indicate that an asset may be impaired and the estimated undiscounted
cash flows are less than the carrying amount of the asset, the impaired asset is
adjusted to its estimated fair value and an impairment loss is recorded. The
estimated fair value of the asset or asset group is based on future cash flows
of the asset or asset group. For lease right-of-use assets, the Company
determines the estimated fair value of the assets by comparing the discounted
contractual rent payments to estimated market rent using an acceptable valuation
methodology. During fiscal 2021, we recorded impairment charges for 42 retail
locations, totaling
Leases
On
We have operating leases for stores, distribution and fulfillment centers, corporate offices and equipment. We sublease certain properties to third parties. We have elected not to record a lease liability and right-of-use asset for leases with original terms of 12 months or less. We have elected the practical expedient to not separate non-lease components from lease components as it pertains to real estate leases.
Store leases have remaining lease terms that range from less than one year up to 15 years, some of which contain options to extend the lease for one or two 5-year periods. Payments related to a renewal period are included in the lease liability and right-of-use asset only when we are reasonably certain that we will exercise the option to renew the lease for an extended period of time. Certain leases may contain variable lease payments such as rent based on a percentage of net sales. Variable lease payments may be subject to a breakpoint threshold of fixed rent. Variable lease payments, other than those that depend on an index or a rate, are not included in the measurement of the lease liability. The lease liability is calculated at the present value of certain future payments, discounted using our incremental borrowing rate, which approximates the rate of interest we would pay to borrow an amount equal to the lease payments on a fully collateralized basis over a similar term. Significant judgment is used in determining the incremental borrowing rate related to estimates for credit rating, credit spread and the impact of collateral. We developed incremental borrowing rates at a lease portfolio level. The right-of-use asset is initially equal to the value of the lease liability less any amounts received from the landlord as incentives or tenant improvement allowances.
Accounting for Income Taxes
As part of the process of preparing our Consolidated Financial Statements, we
are required to estimate our income taxes in each of the tax jurisdictions in
which we operate. This process involves estimating our actual current tax
obligations together with assessing temporary differences resulting from
differing treatment of certain items for tax and accounting purposes, such as
depreciation of property and equipment and valuation of inventories. These
temporary differences result in deferred tax assets and liabilities, which are
included within our Consolidated Balance Sheets. We then assess the likelihood
that our deferred tax assets will be recovered from future taxable income. A
valuation allowance is recognized if, based on the weight of available evidence,
it is more-likely-than-not that some portion, or all, of the deferred tax asset
will not be realized. In making such a determination, we consider all material
available positive and negative evidence, including future reversals of existing
taxable temporary differences, projected future taxable income, tax-planning
strategies and results of recent operations. Actual results could differ from
this assessment if adequate taxable income is not generated in future periods.
Net deferred tax assets as of
To the extent we believe that recovery of a deferred tax asset is at risk, we
establish valuation allowances. To the extent we establish valuation allowances
or increase the allowances in a period, we record additional income tax expense
in the Consolidated Statements of Income. Valuation allowances were
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would be required to reduce our valuation allowances, resulting in a reduction in "Income tax expense" in the Consolidated Statements of Income. On a quarterly basis, management evaluates the likelihood that we will realize the deferred tax assets and adjusts the valuation allowances, if appropriate.
We record uncertain tax positions on the basis of a two-step process whereby (1) we determine whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
Our tax liability for uncertain tax positions contains uncertainties because we are required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions. Although we believe that the judgments and estimates discussed herein are reasonable, actual results may differ, and we may be exposed to income tax expenses or benefits that could be material.
We consider certain earnings of non-
Accounting for Contingencies
From time to time, we are named as a defendant in legal actions arising from our normal business activities. We are required to record a reserve for estimated losses when information available prior to issuance of our financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies arising from contractual disputes or legal proceedings requires management to use its best judgment when estimating an accrual related to such contingencies. As additional information becomes known, our reserves for loss contingencies could fluctuate, thereby creating variability in our results of operations from period to period. Likewise, an actual loss arising from a loss contingency which significantly exceeds our reserve could have a material adverse impact on our operating results for the period in which such actual loss becomes known. We believe that our reserves adequately reflect the anticipated final outcome of any matter currently pending against us and the ultimate settlement of such matters will not materially affect our financial position or results of operations.
Share-Based Compensation
Accounting for share-based compensation requires measurement of compensation cost for all share-based awards at fair value on the date of grant and recognition of compensation over the service period.
A Black-Scholes model was used to determine the fair value of our stock options
granted in the fiscal years ended
Additionally, we make certain estimates about the number of awards that will become vested under performance-based incentive plans. We record expense for performance-based awards based on our current expectations of the probable number of awards that will ultimately vest. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised and could be materially different from share-based compensation expense recorded in prior periods.
We elect to account for forfeitures as they occur rather than estimate the expected forfeitures.
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Results of Operations
As a Percentage of
As a result of the COVID-19 pandemic, our stores were closed for a portion of the first half of fiscal 2021 (see further details under Impact of the Coronavirus Pandemic above). In addition to lost revenues, we incurred expenses that were not commensurate with the current level of sales. As a result, comparisons of expense ratios and year-over-year trends were impacted in a meaningful way.
The following table sets forth, for the periods indicated, the percentage of our net sales represented by certain income statement data and the change in certain income statement data from period to period. This table should be read in conjunction with the discussion that follows:
Fiscal Year Ended
January 31,
2021 2020 2019
Net sales 100.0 % 100.0 % 100.0 %Cost of sales (excluding store impairment) 74.6 68.5 65.8 Store impairment (1)
0.4 0.4 0.1
Gross profit 25.0 31.1 34.1
Selling, general and administrative expenses 24.9 25.0 24.4
Goodwill impairment (2) - 0.3 -
Income from operations 0.1 5.8 9.7
Interest income 0.1 0.3 0.2
Interest expense (0.1 ) (0.0 ) (0.0 )
Other (expense) income (0.0 ) (0.1 ) (0.1 )
Income before income taxes 0.1 6.0 9.8
Income tax expense 0.1 1.8 2.3
Net income 0.0 % 4.2 % 7.5 %
Period over Period Change:
Net sales -13.4 % 0.8 % 9.3 %
Gross profit -30.5 % -7.9 % 14.6 %
Income from operations -98.3 % -39.2 % 46.7 %
Net income -99.3 % -43.6 % 175.3 %
(1) During fiscal 2021, we recorded store impairment charges for 42 retail
locations, totaling $15.5 million . During fiscal 2020, we recorded store
impairment charges for eight retail locations, totaling $14.6 million . During
fiscal 2019, we recorded store impairment charges for four retail locations,
totaling $3.5 million .
(2) During fiscal 2020, we recorded a charge of
impairment of the Menus & Venues brand.
Fiscal 2021 Compared to Fiscal 2020
Net sales in fiscal 2021 decreased by 13.4% to
The decrease in our Retail segment net sales during fiscal 2021 was due to a
decrease of
The decrease in Wholesale segment net sales during fiscal 2021, as compared to
fiscal 2020, was primarily due to a 40.1% decrease in sales for the Free People
brand, due to most of the brand's wholesale partners having a meaningful portion
of their businesses closed during the year due to the COVID-19 pandemic and
lower customer demand once reopened. The segment decrease was also due to a
decrease of
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2021 and the impact of the COVID-19 pandemic on the brand's wholesale partners'
operations, partially offset by an increase of
Gross profit percentage for fiscal 2021 decreased to 25.0% of net sales, from
31.1% of net sales in fiscal 2020. Gross profit decreased to
Total inventory at
Selling, general and administrative expenses decreased by
Income from operations was 0.1% of net sales, or
Our effective tax rate for fiscal 2021 was 64.8% of income before income taxes
compared to 29.9% of income before income taxes in fiscal 2020. The increase in
the effective tax rate for fiscal 2021 was primarily due to the ratio of foreign
taxable losses to global taxable profits and lower income before income taxes as
compared to the prior year comparable period. See Note 10, "Income Taxes," in
the Notes to our Consolidated Financial Statements included in this Annual
Report on Form 10-K, for a reconciliation of the statutory
Fiscal 2020 Compared to Fiscal 2019
Net sales in fiscal 2020 increased by 0.8% to
The growth in our Retail segment net sales during fiscal 2020 was due to an
increase of
The decrease in Wholesale segment net sales during fiscal 2020, as compared to
fiscal 2019, was due to a decrease of 7.7% for the Free People brand, primarily
resulting from lower sales to North American department stores. This decrease
was partially offset by an increase of
Gross profit percentage in fiscal 2020 decreased to 31.1% of net sales, from
34.1% of net sales in fiscal 2019. Gross profit decreased to
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logistics expenses was primarily due to the increase in penetration of the
digital channel. Additionally, store impairment charges were
Total inventory at
Selling, general and administrative expenses increased by
Income from operations decreased to 5.8% of net sales, or
Our effective tax rate for fiscal 2020 was 29.9% of income before income taxes
compared to 22.7% of income before income taxes in fiscal 2019. The increase in
the effective tax rate for fiscal 2020 was primarily due to the ratio of foreign
taxable profits to global taxable profits and an increase in valuation
allowances attributable to net losses of certain foreign operations. See Note
10, "Income Taxes," in the Notes to our Consolidated Financial Statements
included in this Annual Report on Form 10-K, for a reconciliation of the
statutory
Liquidity and Capital Resources
Cash, cash equivalents and marketable securities were
Our working capital was
During the last three years, we have satisfied our cash requirements primarily
through our cash flow from operating activities. Additionally, during fiscal
2021, and in response to the COVID-19 pandemic, we had borrowings of
Cash Flows from Operating Activities
Cash provided by operating activities for fiscal 2021 increased by
Cash Flows from Investing Activities
Cash used in investing activities during fiscal 2021 decreased by
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offset by the sales and maturities of marketable securities. The Company
initially liquidated its marketable securities portfolio earlier in fiscal 2021
primarily to preserve financial flexibility and maintain liquidity in response
to the COVID-19 pandemic, but reinvested in a marketable securities portfolio in
the fourth quarter of fiscal 2021. Cash paid for property and equipment for
fiscal 2021, 2020 and 2019 was
Cash Flows from Financing Activities
Cash used in financing activities during fiscal 2021 decreased by
Credit Facilities
On
The Amended Credit Agreement extended the maturity date of the senior secured
revolving credit facility to
The Amended Credit Facility provides for interest on borrowings, at our option, at either (i) adjusted LIBOR, CDOR or EURIBOR plus an applicable margin ranging from 1.125% to 1.375%, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125% to 0.375%, each such applicable margin depending on the level of availability under the Amended Credit Facility. Currently, there has not been a replacement reference rate identified for LIBOR in the Amended Credit Facility. Depending on the type of borrowing, interest on the Amended Credit Agreement is payable monthly, quarterly or at the end of the interest period. A commitment fee of 0.20% is payable quarterly on the unused portion of the Amended Credit Facility.
All obligations under the Amended Credit Facility are unconditionally guaranteed
by the Company and certain of its
As of
Capital and Operating Expenditures
During fiscal 2022, we plan to continue construction on a new omni-channel
fulfillment center in
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Share Repurchases
See Note 12, "Shareholders' Equity," in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for certain financial information regarding the Company's share repurchases.
Contractual Obligations
The following table summarizes our contractual obligations as ofJanuary 31, 2021 : Payments Due by Period (in thousands) Less Than More Than Total One One Description Obligations Year Year Operating leases (1)$ 1,687,112 $ 329,501 $ 1,357,611 Purchase commitments (2) 672,133 627,585 44,548 Tax payable (3) 27,009 2,843 24,166 Construction contracts (4) 291,803 120,724 171,079 Total contractual obligations$ 2,678,057 $ 1,080,653 $ 1,597,404
(1) Refer to Note 9, "Leases," in the Notes to our Consolidated Financial
Statements included in this Annual Report on Form 10-K.
(2) Refer to Note 15, "Commitments and Contingencies," in the Notes to our
Consolidated Financial Statements included in this Annual Report on Form
10-K.
(3) Represents one-time transition tax payable related to cash taxes payable in
future years as a result of the Tax Act. Excluded from the above table are
tax contingencies of $25,108 because we cannot reasonably estimate in which
future periods these amounts will ultimately be settled. As a result, the
$25,108 liability was classified as a non-current liability in the Company's
Consolidated Balance Sheets as of January 31, 2021 .
(4) Refer to Note 15, "Commitments and Contingencies," in the Notes to our
Consolidated Financial Statements included in this Annual Report on Form
10-K.
Commercial Commitments
The following table summarizes our commercial commitments as of January 31,
2021 :
Amount of Commitment Per Period
(in thousands)
Total Less Than More Than
Amounts One One
Description Committed Year Year
Trade letters of credit (1) $ 52,579 $ 52,579 $ -
Stand-by letters of credit (2) 13,709 13,709 -
Total commercial commitments $ 66,288 $ 66,288 $ -
(1) Consists primarily of outstanding letter of credit commitments in connection
with import inventory purchases. Refer to Note 15, "Commitments and
Contingencies," in the Notes to our Consolidated Financial Statements
included in this Annual Report on Form 10-K.
(2) Consists primarily of stand-by letters of credit for customs, construction,
lease guarantees and insurance. Refer to Note 8, "Debt," in the Notes to our
Consolidated Financial Statements included in this Annual Report on Form
10-K.
Other Matters
Recent Accounting Pronouncements
See Note 2, "Summary of Significant Accounting Policies-Recent Accounting Pronouncements," in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of recently adopted and issued accounting pronouncements.
Seasonality
Our business experiences seasonal fluctuations in net sales and net income, with a more significant portion typically realized in the second half of each year predominantly due to the year-end holiday period. Historically, and consistent with the retail industry, the seasonality also impacts our working capital requirements, particularly with regard to inventory.
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