Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common shares, $0.0001 par value—~~116,233,781~~115,790,358 shares outstanding on ~~December 5, 2016.~~June 2, 2017.


	October 31, 2016			January 31, 2016			October 31, 2015			April 30, 2017			January 31, 2017			April 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	234,886		$	265,276		$	149,597		$	252,484		$	248,140		$	228,144
Marketable securities		24,644			61,061			69,545			118,493			111,067			59,564
Accounts receivable, net of allowance for doubtful accounts of $568, $664 and $675, respectively		68,896			75,723			68,332
Accounts receivable, net of allowance for doubtful accounts of $578, $588 and $1,063, respectively											83,949			54,505			72,165
Inventory		453,826			330,223			441,550			359,493			338,590			359,865
Prepaid expenses, deferred taxes and other current assets		107,767			102,078			118,202
Prepaid expenses and other current assets											110,431			129,095			89,793

Total current assets		890,019			834,361			847,226			924,850			881,397			809,531
Property and equipment, net		872,309			863,137			891,871			851,259			867,786			871,504
Marketable securities		5,605			36,600			54,138			38,451			44,288			18,710
Deferred income taxes and other assets		117,258			99,203			83,300			113,515			109,166			115,149

Total Assets	$	1,885,191		$	1,833,301		$	1,876,535		$	1,928,075		$	1,902,637		$	1,814,894

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	199,421		$	118,035		$	190,542		$	157,153		$	119,537		$	151,983
Accrued expenses, accrued compensation and other current liabilities		205,812			211,196			187,345			196,328			233,391			190,378

Total current liabilities		405,233			329,231			377,887			353,481			352,928			342,361
Long-term debt		—			150,000			115,000			—			—			75,000
Deferred rent and other liabilities		232,325			216,843			211,979			241,904			236,625			223,480

Total Liabilities		637,558			696,074			704,866			595,385			589,553			640,841

Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—			—			—			—			—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 116,233,584, 117,321,120 and 121,545,740 shares issued and outstanding, respectively		12			12			12
Common shares; $.0001 par value, 200,000,000 shares authorized, 116,290,358, 116,233,781 and 117,116,520 shares issued and outstanding, respectively											12			12			12
Additional paid-in-capital		—			—			—			6,628			—			—
Retained earnings		1,285,268			1,160,666			1,184,308			1,358,319			1,347,141			1,187,906
Accumulated other comprehensive loss		(37,647	)		(23,451	)		(12,651	)		(32,269	)		(34,069	)		(13,865	)

Total Shareholders’ Equity		1,247,633			1,137,227			1,171,669			1,332,690			1,313,084			1,174,053

Total Liabilities and Shareholders’ Equity	$	1,885,191		$	1,833,301		$	1,876,535		$	1,928,075		$	1,902,637		$	1,814,894

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


	Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
	2016		2015		2016		2015			2017		2016
Net sales	$	862,491	$	825,258	$	2,515,636	$	2,431,728		$	761,190	$	762,577
Cost of sales		562,594		537,070		1,611,337		1,579,014			521,410		500,686

Gross profit		299,897		288,188		904,299		852,714			239,780		261,891
Selling, general and administrative expenses		229,592		207,863		665,299		615,584			218,744		211,408

Income from operations		70,305		80,325		239,000		237,130			21,036		50,483
Other income (expense), net		854		63		348		(2,654	)		319		(1,577	)

Income before income taxes		71,159		80,388		239,348		234,476			21,355		48,906
Income tax expense		23,804		28,394		85,516		82,865			9,417		19,344

Net income	$	47,355	$	51,994	$	153,832	$	151,611		$	11,938	$	29,562

Net income per common share:
Basic	$	0.41	$	0.42	$	1.31	$	1.19		$	0.10	$	0.25

Diluted	$	0.40	$	0.42	$	1.31	$	1.18		$	0.10	$	0.25

Weighted-average common shares outstanding:
Basic		116,829,912		123,442,931		117,087,696		127,478,092			116,276,289		117,304,736

Diluted		117,393,710		123,725,581		117,453,005		128,506,955			116,539,305		117,587,009

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


	Common Shares					Additional Paid-in Capital			Retained Earnings				Accumulated Other Compre- hensive Loss				Total				Common Shares					Additional Paid-in Capital			Retained Earnings			Accumulated Other Compre- hensive Loss			Total
	Number of Shares			Par Value		Additional Paid-in Capital							Accumulated Other Compre- hensive Loss			Number of Shares						Par Value				Additional Paid-in Capital			Retained Earnings			Accumulated Other Compre- hensive Loss			Total
Balances as of January 31, 2016		117,321,120		$	12	$	—		Retained Earnings		$	1,160,666			$	(23,451	Total	)		$	1,137,227
Balances as of January 31, 2017																						116,233,781		$	12	$	—		$	1,347,141		$	(34,069	)	$	1,313,084
Comprehensive income		—			—		—			153,832				(14,196	)			139,636				—			—		—			11,938			1,800			13,738
Share-based compensation		—			—		20,032			—				—				20,032				—			—		6,163			—			—			6,163
Stock options and awards		292,847			—		4,096			—				—				4,096				100,000			—		—			—			—			—
Excess tax deficiencies from share-based awards, net		—			—		(5,522	)		—				—				(5,522	)
Cumulative effect of change in accounting pronouncement																						—			—		1,607			(760	)		—			847
Share repurchases		(1,380,383	)		—		(18,606	)		(29,230	)			—				(47,836	)			(43,423	)		—		(1,142	)		—			—			(1,142	)

Balances as of October 31, 2016		116,233,584		$	12	$	—		$	1,285,268			$	(37,647	)		$	1,247,633
Balances as of April 30, 2017																						116,290,358		$	12	$	6,628		$	1,358,319		$	(32,269	)	$	1,332,690

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


	Nine Months Ended October 31,						Three Months Ended April 30,
	2016			2015			2017			2016
Cash flows from operating activities:
Net income	$	153,832		$	151,611		$	11,938		$	29,562
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		101,181			106,751			32,136			34,844
(Benefit) provision for deferred income taxes		(11,087	)		448
Excess tax benefits from share-based awards		(333	)		(6,419	)
Benefit for deferred income taxes								(3,872	)		(3,107	)
Share-based compensation expense		20,032			12,141			6,163			5,760
Loss on disposition of property and equipment, net		2,801			910			528			780
Changes in assets and liabilities:
Receivables		6,261			(6,217	)		(29,308	)		3,812
Inventory		(126,934	)		(82,780	)		(20,365	)		(27,357	)
Prepaid expenses and other assets		(7,331	)		19,972			2,356			13,240
Payables, accrued expenses and other liabilities		90,592			32,188			13,454			12,573

Net cash provided by operating activities		229,014			228,605			13,030			70,107

Cash flows from investing activities:
Cash paid for property and equipment		(112,069	)		(109,128	)		(23,541	)		(31,111	)
Cash paid for marketable securities		(152,340	)		(213,423	)		(50,272	)		(37,328	)
Sales and maturities of marketable securities		218,400			296,172			64,903			57,219
Acquisition of business		(15,325	)		—			—			(15,325	)

Net cash used in investing activities		(61,334	)		(26,379	)		(8,910	)		(26,545	)

Cash flows from financing activities:
Borrowings under long-term debt		—			191,612
Repayments of long-term debt		(150,000	)		(76,612	)		—			(75,000	)
Proceeds from the exercise of stock options		4,096			46,400			—			2,472
Excess tax benefits from share-based awards		333			6,419
Share repurchases related to share repurchase program		(45,787	)		(365,527	)		—			(10,704	)
Share repurchases related to taxes for share-based awards		(2,049	)		(10,119	)		(1,142	)		—

Net cash used in financing activities		(193,407	)		(207,827	)		(1,142	)		(83,232	)

Effect of exchange rate changes on cash and cash equivalents		(4,663	)		640			1,366			2,538

Decrease in cash and cash equivalents		(30,390	)		(4,961	)
Increase (decrease) in cash and cash equivalents								4,344			(37,132	)
Cash and cash equivalents at beginning of period		265,276			154,558			248,140			265,276

Cash and cash equivalents at end of period	$	234,886		$	149,597		$	252,484		$	228,144

Supplemental cash flow information:
Cash paid during the period for:
Cash paid during the year for:
Income taxes	$	85,179		$	60,521		$	6,865		$	10,106

Non-cash investing activities—Accrued capital expenditures	$	16,012		$	14,596		$	7,961		$	15,507

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

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed financial statements should be read in conjunction with Urban Outfitters, Inc.’s (the “Company’s”) Annual Report on Form 10-K for the fiscal year ended January 31, ~~2016,~~2017, filed with the United States Securities and Exchange Commission on ~~March 31, 2016.~~April 3, 2017.

The Company’s business experiences seasonal fluctuations ~~and realizes greater~~in net sales and ~~operating~~net income, with a more significant portion typically realized in the ~~fourth quarter~~second half of each year ~~reflecting~~predominantly due to the year-end holiday period. Historically, and consistent with the retail industry, this seasonality also impacts our working capital requirements, particularly with regard to inventory. Accordingly, the results of operations for the three ~~and nine~~ months ended ~~October 31, 2016~~April 30, 2017 are not necessarily indicative of the results to be expected for the full year.

The Company’s fiscal year ends on January 31. All references in these notes to the Company’s fiscal years refer to the fiscal years ended on January 31 in those years. For example, the Company’s fiscal year ~~2017~~2018 will end on January 31, ~~2017.~~2018.

In ~~October~~March 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the new guidance on February 1, 2017 and recorded a cumulative effect reduction to beginning retained earnings of $(984) related to the Company’s election to record forfeitures as they occur and $224 related to the recognition of previously unrecognized excess tax benefits. In addition, the Company elected to retrospectively adopt the provision regarding the presentation of excess tax benefits (deficits) in the statement of cash flows, which resulted in an increase in net cash provided by operating activities and a decrease in net cash used in financing activities of $150 for the three months ended April 30, 2016. The provision requiring the inclusion of excess tax benefits (deficits) as a component of the provision for income taxes in the consolidated results of operations will be applied prospectively. The Company recorded excess tax deficits of $442 during the three months ended April 30, 2017.

In October 2016, the FASB issued an accounting standards update that amends the existing guidance on the income tax effects of intra-entity asset transfers with the exception of transfers of inventory. The update requires the recognition of tax expense when an intra-entity asset transfer occurs as opposed to being deferred under the existing guidance. The update will be effective for the Company on February 1, 2018 and early adoption is permitted in the first interim period of a fiscal year. The update requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings. The Company is currently assessing the potential effects this update may have on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued an accounting standards update that introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. This includes loan commitments, accounts receivable, trade receivables, and certain off-balance sheet credit exposures. The guidance also modifies the impairment model for available-for-sale debt securities. The update will be effective for the Company on February 1, 2020 and early adoption is permitted. The Company is currently assessing the potential effects this update may have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued an accounting standards update that makes several modifications to the accounting for employee share-based payment transactions, including the requirement to recognize excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement rather than in additional-paid-in capital. The guidance also clarifies the classification of components of share-based awards on the statement of cash flows. The update will be effective for the Company on February 1, 2017 and early adoption is permitted. The Company is currently assessing the potential effects this update may have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued an accounting standards update that amends the existing accounting standards for lease accounting. This update requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than ~~twelve~~12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of ~~twelve~~12 months or less. The update will be effective for the Company on February 1, 2019 and early adoption is permitted. The update requires a modified retrospective transition approach, which includes a number of practical expedients. While the Company expects adoption to result in a significant increase in the assets and liabilities recorded on its balance sheet, the Company is currently assessing the overall impact on ~~its consolidated financial statements and related disclosures.~~

In July 2015, the FASB issued an accounting standards update that clarifies the measurement of inventory. The update applies to entities which utilize the first-in, first-out (“FIFO”) and average cost methods of measuring inventory and states that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value represents the estimated selling price less costs associated with completion, disposal and transportation. The update will be effective for the Company on February 1, 2017 and early adoption is permitted. The update is to be adopted on a prospective basis. The Company has performed an assessment of its inventory measurement process and determined that the effects of this update will be immaterial to its consolidated financial statements and related disclosures.

In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue from contracts with customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Entities are required to apply the following steps when recognizing revenue under the update: (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The update allows for a “full retrospective” adoption, meaning the update is applied to all periods presented, or a “modified retrospective” adoption, meaning the update is applied only to the most current periods presented in the financial statements. In August 2015, the FASB issued an accounting standards update which approved a one-year deferral of the effective date that allows the Company to defer the effective date to February 1, 2018, but still permits the Company to adopt the update as of the original February 1, 2017 effective date. The Company ~~is currently evaluating the adoption method to apply~~has determined it will adopt this update on February 1, 2018 and ~~the impact~~has concluded that the effects of this update will not have a material impact on its consolidated financial statements and related disclosures.

On February 1, 2016, the Company acquired certain assets of the Vetri Family group of restaurants, headquartered in Philadelphia, PA, for a total aggregate purchase price of approximately $18,937, of which $15,325 was paid in cash, $2,687 was satisfied through the settlement of a note receivable and up to an additional $925 that will be paid in cash in ~~the fourth quarter of~~ fiscal ~~2017.~~2018. No liabilities were assumed. Pro forma information related to this acquisition is not included because the impact on the Company’s Condensed Consolidated Statements of Income is not considered to be material.

During all periods shown, marketable securities are classified as available-for-sale. The amortized cost, gross unrealized gains (losses) and fair value of available-for-sale securities by major security type and class of security as of ~~October 31, 2016,~~April 30, 2017, January 31, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016 were as follows:


	Amortized Cost		Unrealized Gains		Unrealized (Losses)			Fair Value		Amortized Cost		Unrealized Gains		Unrealized (Losses)			Fair Value
As of January 31, 2016
As of April 30, 2017
Short-term Investments:
Corporate bonds	$	33,885	$	10	$	(25	)	$	33,870	$	77,313	$	4	$	(58	)	$	77,259
Municipal and pre-refunded municipal bonds		26,243		33		—			26,276		40,788		24		(3	)		40,809
Certificates of deposit		915		—		—			915		425		—		—			425

		61,043		43		(25	)		61,061		118,526		28		(61	)		118,493

Long-term Investments:
Corporate bonds		12,227		9		(35	)		12,201		27,586		3		(36	)		27,553
Municipal and pre-refunded municipal bonds		18,028		58		(2	)		18,084		4,758		17		—			4,775
Mutual funds, held in rabbi trust		4,604		6		(247	)		4,363		5,011		62		(1	)		5,072
Certificates of deposit		1,952		—		—			1,952		1,051		—		—			1,051

		36,811		73		(284	)		36,600		38,406		82		(37	)		38,451

	$	97,854	$	116	$	(309	)	$	97,661	$	156,932	$	110	$	(98	)	$	156,944

As of January 31, 2017
Short-term Investments:
Corporate bonds										$	59,403	$	7	$	(90	)	$	59,320
Municipal and pre-refunded municipal bonds											51,731		28		(12	)		51,747

											111,134		35		(102	)		111,067

Long-term Investments:
Corporate bonds											19,102		9		(33	)		19,078
Municipal and pre-refunded municipal bonds											19,488		35		(9	)		19,514
Mutual funds, held in rabbi trust											4,583		91		(1	)		4,673
Certificates of deposit											1,023		—		—			1,023

											44,196		135		(43	)		44,288

										$	155,330	$	170	$	(145	)	$	155,355


	Amortized Cost		Unrealized Gains		Unrealized (Losses)			Fair Value		Amortized Cost		Unrealized Gains		Unrealized (Losses)			Fair Value
As of October 31, 2015
As of April 30, 2016
Short-term Investments:
Corporate bonds	$	37,260	$	4	$	(45	)	$	37,219	$	18,972	$	5	$	(7	)	$	18,970
Municipal and pre-refunded municipal bonds		31,100		46		(1	)		31,145		40,569		27		(2	)		40,594
Certificates of deposit		1,181		—		—			1,181

		69,541		50		(46	)		69,545		59,541		32		(9	)		59,564

Long-term Investments:
Corporate bonds		15,210		7		(28	)		15,189		5,356		2		(10	)		5,348
Municipal and pre-refunded municipal bonds		30,265		115		(2	)		30,378		9,060		20		(1	)		9,079
Mutual funds, held in rabbi trust		4,840		272		(1	)		5,111		3,907		30		(3	)		3,934
Certificates of deposit		3,460		—		—			3,460		349		—		—			349

		53,775		394		(31	)		54,138		18,672		52		(14	)		18,710

	$	123,316	$	444	$	(77	)	$	123,683	$	78,213	$	84	$	(23	)	$	78,274

Proceeds from the sales and maturities of available-for-sale securities were ~~$218,400~~$64,903 and ~~$296,172~~$57,219 for the ~~nine~~three months ended ~~October 31,~~April 30, 2017 and 2016, ~~and 2015,~~ respectively. The Company included in “Other income (expense), ~~net”~~net,” in the Condensed Consolidated Statements of Income, net realized ~~losses~~gains of ~~$96~~$14 and ~~$74~~$13 for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016, ~~respectively, and net realized gains of $11 and $53 for the three and nine months ended October 31, 2015,~~ respectively. Amortization of discounts and premiums, net, resulted in a reduction of “Other income (expense), net” of ~~$550~~$803 and ~~$1,711~~$594 for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016, ~~and $997 and $3,155 for the three and nine months ended October 31, 2015,~~ respectively. Mutual funds represent assets held in an irrevocable rabbi trust for the Company’s Non-qualified Deferred Compensation Plan (“NQDC”). These assets are a source of funds to match the funding obligations to participants in the NQDC but are subject to the Company’s general creditors. The Company elected the fair value option for financial assets for the mutual funds held in the rabbi trust resulting in all unrealized gains and losses being recorded in “Other income (expense), net” in the Condensed Consolidated Statements of Income.

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach that relate to its financial assets and financial liabilities). The levels of the hierarchy are described as follows:

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy. The Company’s financial assets that are accounted for at fair value on a recurring basis are presented in the tables below:


	Marketable Securities Fair Value as of October 31, 2016								Marketable Securities Fair Value as of April 30, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	18,014	$	—	$	—	$	18,014	$	104,812	$	—	$	—	$	104,812
Municipal and pre-refunded municipal bonds		—		7,160		—		7,160		—		45,584		—		45,584
Mutual funds, held in rabbi trust		4,447		—		—		4,447		5,072		—		—		5,072
Certificates of deposit		—		628		—		628		—		1,476		—		1,476

	$	22,461	$	7,788	$	—	$	30,249	$	109,884	$	47,060	$	—	$	156,944


	Marketable Securities Fair Value as of January 31, 2016								Marketable Securities Fair Value as of January 31, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	46,071	$	—	$	—	$	46,071	$	78,398	$	—	$	—	$	78,398
Municipal and pre-refunded municipal bonds		—		44,360		—		44,360		—		71,261		—		71,261
Mutual funds, held in rabbi trust		4,363		—		—		4,363		4,673		—		—		4,673
Certificates of deposit		—		2,867		—		2,867		—		1,023		—		1,023

	$	50,434	$	47,227	$	—	$	97,661	$	83,071	$	72,284	$	—	$	155,355


	Marketable Securities Fair Value as of October 31, 2015								Marketable Securities Fair Value as of April 30, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	52,408	$	—	$	—	$	52,408	$	24,318	$	—	$	—	$	24,318
Municipal and pre-refunded municipal bonds		—		61,523		—		61,523		—		49,673		—		49,673
Mutual funds, held in rabbi trust		5,111		—		—		5,111		3,934		—		—		3,934
Certificates of deposit		—		4,641		—		4,641		—		349		—		349

	$	57,519	$	66,164	$	—	$	123,683	$	28,252	$	50,022	$	—	$	78,274

Level 1 assets consist of financial instruments whose value has been based on inputs that use, as their basis, readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers.

Level 2 assets consist of financial instruments whose value has been based on quoted prices for similar assets and liabilities in active markets as well as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 assets consist of financial instruments where there has been no active market. The Company held no Level 3 financial instruments as of ~~October 31, 2016,~~April 30, 2017, January 31, ~~2016~~2017 and ~~October 31, 2015.~~April 30, 2016.

The fair value of cash and cash equivalents (Level 1) approximates carrying value since cash and cash equivalents consist of short-term highly liquid investments with maturities of less than three months at the time of purchase. As of ~~October 31,~~April 30, 2017 and 2016, ~~and 2015,~~ cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase. The fair value of debt approximates its carrying value as it is all variable rate debt.

The Company’s non-financial assets, primarily consisting of property and equipment, are periodically tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The fair value of the non-financial assets was determined using a discounted ~~cash flow~~cash-flow model that utilized Level 3 inputs. The Company’s stores are reviewed for impairment at the store level, which is the lowest level at which individual cash flows can be identified. In calculating future cash flows, the Company makes estimates regarding future operating results based on its experience and knowledge of ~~the~~ market factors in which the store is located. For the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016, ~~and 2015,~~ impairment charges were zero.

On July 1, 2015, the Company and its domestic subsidiaries entered into a five-year asset-based revolving Credit Agreement (“Credit Agreement”) with certain lenders, including JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities LLC and Wells Fargo Bank, National Association, as joint lead arrangers and co-book managers.

The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400,000 (the “Credit Facility”), subject to a borrowing base that is comprised of the Company’s eligible accounts receivable and inventory. The Credit Facility includes a swing-line sub-facility, a multicurrency sub-facility and the option to expand the facility by up to $150,000. The funds available under the Credit Facility may be used for working capital and other general corporate purposes.

The Credit Facility provides for interest on borrowings, at the Company’s option, at either (i) adjusted LIBOR, CDOR or EURIBOR plus an applicable margin ranging from 1.125% to 1.625%, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125% to 0.625%, each such rate ~~based~~depending on the level of availability under the Credit Facility and the Company’s adjusted leverage ratio. Interest is payable either monthly or quarterly depending on the type of borrowing. A commitment fee is payable quarterly on the unused portion of the Credit Facility based on the Company’s adjusted leverage ratio.

All obligations under the Credit Facility are unconditionally guaranteed by the Company and its domestic subsidiaries. The obligations under the Credit Facility are secured by a first-priority security interest in inventory, accounts receivable, and certain other assets of the borrowers and guarantors. The Credit Agreement contains customary representations and warranties, negative and affirmative covenants and provisions relating to events of default.

As of ~~October 31, 2016,~~April 30, 2017, the Company was in compliance with all terms of the Credit Agreement and borrowings onunder the Credit Facility totaled ~~$0 and~~$0. Outstanding stand-by letters of credit, ~~outstanding~~which reduce the funds available under the Credit Facility, were ~~$13,113.~~$8,922.

Additionally, the Company has borrowing agreements with two separate financial institutions under which the Company may borrow an aggregate of $130,000 for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions. As of ~~October 31, 2016,~~April 30, 2017, the Company had outstanding trade letters of credit of ~~$66,001,~~$50,441, and available trade letters of credit of ~~$63,999~~$79,559 under these facilities.

The Company maintains stock incentive plans pursuant to which it can grant restricted shares, unrestricted shares, incentive stock options, non-qualified stock options, restricted stock units (“RSU’s”), performance stock units (“PSU’s”) or stock appreciation rights (“SAR’s”). A lattice binomial pricing model was used to estimate the fair values of stock options and SAR’s. The fair value of each of the PSU’s was determined using a Monte Carlo simulation. Share-based compensation expense included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income, for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016 ~~and 2015~~ was as follows:


	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended April 30,
	2016		2015		2016		2015		2017		2016
Stock Options	$	245	$	202	$	757	$	627	$	249	$	209
Stock Appreciation Rights		60		439		179		1,389		61		59
Performance Stock Units		5,595		3,828		15,550		10,102		4,018		4,592
Restricted Stock Units		1,380		—		3,546		23		1,835		900

Total	$	7,280	$	4,469	$	20,032	$	12,141	$	6,163	$	5,760

Share-based awards granted and the weighted-average fair value for the ~~nine~~three months ended ~~October 31, 2016~~April 30, 2017 was as follows:


	Nine Months Ended October 31, 2016				Three Months Ended April 30, 2017
	Awards Granted		Weighted- Average Fair Value		Awards Granted		Weighted- Average Fair Value
Stock Options		140,000	$	7.31		—	$	—
Stock Appreciation Rights		—	$	—		—	$	—
Performance Stock Units		410,000	$	27.30		290,000	$	25.14
Restricted Stock Units		541,500	$	27.94		596,000	$	26.03

Total		1,091,500				886,000

During the ~~nine~~three months ended ~~October 31, 2016, 177,625~~April 30, 2017, 100,000 PSU’s vested. No stock options ~~were exercised, 67,975~~or SAR’s were exercised and ~~100,000 PSU’s vested. No~~no RSU’s vested during the ~~nine~~three months ended ~~October 31, 2016.~~April 30, 2017.

The total unrecognized compensation cost related to outstanding share-based awards and the weighted-average period in which the cost is expected to be recognized as of ~~October 31, 2016 is~~April 30, 2017 was as follows:


	October 31, 2016				April 30, 2017
	Unrecognized Compensation Cost		Weighted- Average Years		Unrecognized Compensation Cost		Weighted- Average Years
Stock Options	$	546		0.6	$	67		0.1
Stock Appreciation Rights		199		1.0		85		0.6
Performance Stock Units		34,265		2.3		28,066		2.2
Restricted Stock Units		10,826		2.3		22,912		2.5

Total	$	45,836		2.3	$	51,130

Share repurchase activity under the Company’s share repurchase programs iswas as follows:


	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended April 30,
	2016		2015		2016		2015		2017		2016
Number of common shares repurchased and subsequently retired		1,000,000		3,699,949		1,324,700		10,737,090		—		324,700
Total cost	$	35,083	$	111,909	$	45,787	$	365,527	$	—	$	10,704
Average cost per share, including commissions	$	35.08	$	30.25	$	34.56	$	34.04	$	—	$	32.97

On May 27, 2014, the Company’s Board of Directors authorized the repurchase of 10,000,000 common shares under a share repurchase program; all shares were repurchased and the authorization was completed by the end of June 2015. On February 23, 2015, the Company’s Board of Directors authorized the repurchase of 20,000,000 common shares under a share repurchase program, of which 5,995,059 common shares were remaining as of ~~October 31, 2016.~~April 30, 2017.

~~In addition~~Subsequent to April 30, 2017, the Company repurchased and subsequently retired a total of 500,000 common shares ~~repurchased under~~for approximately $9,455, at an average price of $18.91 per share, including commissions, which the ~~share repurchase program, during~~Company funded with available cash, cash equivalents and marketable securities.

During the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, the Company acquired and subsequently retired ~~55,683~~43,423 common shares at a total cost of ~~$2,049~~$1,142 from employees to meet minimum statutory tax withholding requirements. During the ~~nine~~three months ended ~~October 31, 2015,~~April 30, 2016, the Company ~~acquired and subsequently retired 247,124~~did not acquire any common shares ~~at a total cost of $10,119~~ from employees to meet minimum statutory tax withholding requirements.

The following tables present the changes in “Accumulated other comprehensive income (loss),” by component, net of tax, for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016, ~~and 2015,~~ respectively:


																			Three Months Ended April 30, 2017
	Three Months Ended October 31, 2016									Nine Months Ended October 31, 2016									Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities				Total
	Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities			Total			Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities			Total			Foreign Currency Translation							Total
Balance at beginning of period	$	(26,955	)	$	28		$	(26,927	)	$	(23,479	)	$	28		$	(23,451	)	$	(34,012	)		$	(57	)		$	(34,069	)
Other comprehensive income (loss) before reclassifications		(10,665	)		41			(10,624	)		(14,141	)		19			(14,122	)		1,788			(2	)			1,786
Amounts reclassified from accumulated other comprehensive income (loss)		—			(96	)		(96	)		—			(74	)		(74	)		—			14				14

Net current-period other comprehensive income (loss)		(10,665	)		(55	)		(10,720	)		(14,141	)		(55	)		(14,196	)		1,788			12				1,800

Balance at end of period	$	(37,620	)	$	(27	)	$	(37,647	)	$	(37,620	)	$	(27	)	$	(37,647	)	$	(32,224	)	$	(45	)		$	(32,269	)


																		Three Months Ended April 30, 2016
	Three Months Ended October 31, 2015								Nine Months Ended October 31, 2015									Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities			Total
	Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities		Total			Foreign Currency Translation			Unrealized Gains and (Losses) on Available-for- Sale Securities			Total			Foreign Currency Translation						Total
Balance at beginning of period	$	(10,018	)	$	26	$	(9,992	)	$	(15,516	)	$	89		$	(15,427	)	$	(23,479	)		$	28		$	(23,451	)
Other comprehensive income (loss) before reclassifications		(2,688	)		18		(2,670	)		2,810			(87	)		2,723			9,590			(17	)		9,573
Amounts reclassified from accumulated other comprehensive income (loss)		—			11		11			—			53			53			—			13			13

Net current-period other comprehensive income (loss)		(2,688	)		29		(2,659	)		2,810			(34	)		2,776			9,590			(4	)		9,586

Balance at end of period .	$	(12,706	)	$	55	$	(12,651	)	$	(12,706	)	$	55		$	(12,651	)
Balance at end of period																		$	(13,889	)	$	24		$	(13,865	)

All unrealized gains and losses on available-for-sale securities reclassified from accumulated other comprehensive loss were recorded in “Other income (expense), net” in the Condensed Consolidated Statements of Income.

The following is a reconciliation of the weighted-average common shares outstanding used for the computation of basic and diluted net income per common share:


	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended April 30,
	2016		2015		2016		2015		2017		2016
Basic weighted-average common shares outstanding		116,829,912		123,442,931		117,087,696		127,478,092		116,276,289		117,304,736
Effect of dilutive options, stock appreciation rights, performance stock units and restricted stock units		563,798		282,650		365,309		1,028,863		263,016		282,273

Diluted weighted-average shares outstanding		117,393,710		123,725,581		117,453,005		128,506,955		116,539,305		117,587,009

For the three months ended ~~October 31,~~April 30, 2017 and 2016, ~~and 2015,~~ awards to purchase ~~556,375~~1,128,400 common shares ~~with an exercise~~ranging in price ~~range of $35.41~~from $25.60 to $46.02 and ~~999,916~~918,000 common shares ~~with an exercise~~ranging in price ~~range of $30.50~~from $29.92 to $46.02, respectively, were excluded from the ~~Company’s computation~~calculation of diluted ~~weighted-average shares outstanding~~net income per common share because ~~their effect~~the impact would have been anti-dilutive. For the nine months ended October 31, 2016 and 2015, awards to purchase 857,331 common shares with an exercise price range of $28.10 to $46.02 and 553,208 common shares with an exercise price range of $30.50 to $46.02, respectively, were excluded from the Company’s computation of diluted weighted-average shares outstanding because their effect would have beenbe anti-dilutive.

Excluded from the calculation of diluted net income per common share as of ~~October 31,~~April 30, 2017 and 2016 were 2,941,727 and ~~2015 were 2,442,345 and 3,702,743~~4,034,213 performance-based equity awards, respectively, since they did not meet the required performance criteria.

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 a material adverse effect on the Company’s financial position, or results of ~~operations.~~operations or cash flows.

The Company ~~is a portfolio of global consumer brands that offer~~offers lifestyle-oriented general merchandise and consumer products and services ~~with~~through a portfolio of global consumer brands. The Company operates two reportable segments—~~“Retail”~~ “Retail” and “Wholesale.” The Company’s Retail segment consists of the ~~aggregation of its six brands operating under the names~~ “Anthropologie,” “Bhldn,” “Free People,” ~~“Terrain,”~~“Terrain” and “Urban Outfitters” brands and ~~“Vetri Family.”~~the Food and Beverage division. The Anthropologie, Bhldn and Terrain brands make up the “Anthropologie Group.” As of ~~October 31, 2016,~~April 30, 2017, there were 242 Urban Outfitters stores, ~~226~~225 Anthropologie Group stores, ~~124~~130 Free People stores and 12 ~~restaurants.~~restaurants under the Food and Beverage division. Urban Outfitters, the Anthropologie Group and Free People, including their stores and direct-to-consumer channels, and restaurants are each considered an operating segment. Net sales from the Retail segment accounted for approximately ~~91.0%~~90.7% and ~~91.5%~~91.8% of total consolidated net sales for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016, ~~respectively. Net sales from the Retail segment accounted for approximately 92.8% and 92.4% of total consolidated net sales for the three and nine months ended October 31, 2015,~~ respectively. The remaining net sales are derived from the Company’s Wholesale segment that ~~distributes~~consists of the Free People wholesale division that primarily designs, develops and markets young women’s contemporary casual apparel, including intimates and activewear, and shoes tosold through approximately ~~1,800 better~~1,900 department and specialty ~~retailers~~stores worldwide, third-party websites and to the Retail segment.

The Company has aggregated its brands into the Retail segment based upon their shared 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 charges) of the segment. Corporate expenses include expenses incurred and directed by the corporate office that are not allocated to segments. The principal identifiable assets for each reporting segment are inventory and property and equipment.

Other assets are comprised primarily of general corporate assets, which principally consist of cash and cash equivalents, marketable securities, deferred taxes and prepaid expenses, which are typically not allocated to the Company’s segments. The Company accounts for intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases.

The Company’s omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers. The Company’s investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the omni-channel and not the separate store or direct-to-consumer channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of the Company’s fulfillment centers or from a different store location if an item is not available at the original store. The Company also allows customers to view in-store inventory from its websites and mobile applications. Direct-to-consumer orders are primarily shipped to the Company’s customers through its fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of a particular item. Direct-to-consumer orders may also be picked up at a store location. Customers may also return certain merchandise purchased through direct-to-consumer channels at store locations. As the Company’s customers continue to shop across multiple channels, the Company has adapted its approach towards meeting this demand. Due to the availability of like product in a variety of shopping channels, the Company sources these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow the Company to better serve its customers and help it to complete ~~a sale~~sales that otherwise may not have occurred due to out-of-stock positions. As a result of changing customer behavior and the substantial integration of the operations of the Company’s store and direct-to-consumer channels, the Company manages and analyzes its performance based on a single omni-channel rather than separate channels and believes that the omni-channel results present the most meaningful and appropriate measure of the Company’s performance. Over the next several years the Company plans to continue to shift investment to the direct-to-consumer channel to align with changing customer preferences.

The accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in

the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2016.~~2017. Both the Retail and Wholesale segments are highly diversified. No one customer constitutes more than 10% of the Company’s total consolidated net sales. A summary of the information about the Company’s operations by segment is as follows:


	October 31, 2016		January 31, 2016		October 31, 2015		April 30, 2017		January 31, 2017		April 30, 2016
Inventory
Retail operations	$	415,923	$	289,170	$	391,771	$	324,126	$	301,519	$	324,940
Wholesale operations		37,903		41,053		49,779		35,367		37,071		34,925

Total inventory	$	453,826	$	330,223	$	441,550	$	359,493	$	338,590	$	359,865

Property and equipment, net
Retail operations	$	869,042	$	859,277	$	887,927	$	847,926	$	864,396	$	867,813
Wholesale operations		3,267		3,860		3,944		3,333		3,390		3,691

Total property and equipment, net	$	872,309	$	863,137	$	891,871	$	851,259	$	867,786	$	871,504


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended April 30,
	2016			2015			2016			2015			2017			2016
Net sales
Retail operations	$	785,026		$	765,525		$	2,300,981		$	2,246,275		$	690,352		$	700,193
Wholesale operations		81,552			62,170			222,712			194,410			72,949			64,488
Intersegment elimination		(4,087	)		(2,437	)		(8,057	)		(8,957	)		(2,111	)		(2,104	)

Total net sales	$	862,491		$	825,258		$	2,515,636		$	2,431,728		$	761,190		$	762,577

Income from operations
Retail operations	$	67,981		$	76,095		$	234,022		$	227,684		$	19,905		$	50,799
Wholesale operations		17,006			12,094			44,213			40,182			16,269			9,811
Intersegment elimination		(317	)		(203	)		(568	)		(809	)		10			(171	)

Total segment operating income		84,670			87,986			277,667			267,057			36,184			60,439
General corporate expenses		(14,365	)		(7,661	)		(38,667	)		(29,927	)		(15,148	)		(9,956	)

Total income from operations	$	70,305		$	80,325		$	239,000		$	237,130		$	21,036		$	50,483

The Company has foreign operations primarily in Europe and Canada. Revenues and long-lived assets, based upon the Company’s domestic and foreign operations, are as follows:


	October 31, 2016		January 31, 2016		October 31, 2015		April 30, 2017		January 31, 2017		April 30, 2016
Property and equipment, net
Domestic operations	$	767,916	$	742,171	$	754,284	$	754,965	$	766,419	$	749,072
Foreign operations		104,393		120,966		137,587		96,294		101,367		122,432

Total property and equipment, net	$	872,309	$	863,137	$	891,871	$	851,259	$	867,786	$	871,504


	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended April 30,
	2016		2015		2016		2015		2017		2016
Net Sales
Domestic operations	$	760,074	$	720,671	$	2,211,925	$	2,126,877	$	677,953	$	673,364
Foreign operations		102,417		104,587		303,711		304,851		83,237		89,213

Total net sales	$	862,491	$	825,258	$	2,515,636	$	2,431,728	$	761,190	$	762,577

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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: 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, overall economic and market conditions and worldwide political events and the resultant impact on consumer spending patterns, ~~lowered levels of consumer confidence and higher levels of unemployment, lowered levels of consumer spending resulting from worldwide political and economic events,~~ any effects of war, terrorism and civil unrest, natural disasters or severe weather conditions, increases in labor costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, the departure of one or more key senior executives, import risks, changes to U.S. and foreign trade policies, including ~~potential disruptions and changes~~the enactment of tariffs, border adjustment taxes or increases in duties ~~tariffs and~~or quotas, the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, risks associated with internet sales, response to new store concepts, our ability to integrate acquisitions, failure of our manufacturers and third-party vendors to comply with our social compliance program, 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 Form10-K for the fiscal year ended January 31, ~~2016,~~2017, filed on ~~March 31, 2016.~~April 3, 2017. 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 ~~“Urban Outfitters,”~~ the “Company,” “we,” ~~“us,”~~“us” or “our” ~~or “our company”~~ refer to Urban Outfitters, Inc., together with its subsidiaries.

We operate two reportable segments: a leading lifestyle specialty Retail segment and a Wholesale segment. Our Retail segment consists of our Anthropologie, Bhldn, Free People, Terrain and Urban Outfitters brands and ~~Vetri Family brands.~~our Food and Beverage division. Our Retail segment consumer products and services are sold directly to our customers through our stores, websites, mobile applications, catalogs and customer contact centers. Our Wholesale segment consists of the Free People wholesale division that primarily designs, develops and markets young women’s contemporary casual apparel, including intimates and activewear, and shoes sold through ~~individual~~department and ~~chain~~ specialty stores worldwide, third-party websites and ~~department stores.~~the Retail segment.

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 ~~2017~~2018 will end on January 31, ~~2017.~~2018.

Our omni-channel strategy enhances our customers’ brand experience by providing a seamless approach to the customer shopping experience. All available 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 omni-channel and not the separate store or direct-to-consumer channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of our fulfillment centers or from a different store location if an item is not available at the original store. We also allow customers to view in-store inventory from our websites and mobile applications. Direct-to-consumer orders are primarily shipped to our customers through our fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of particular items. Direct-to-consumer orders may also be picked up at a store location. Customers may also return certain merchandise purchased through direct-to-consumer channels at store

customers continue to shop across multiple channels, we have adapted our approach towards meeting this demand. Due to the availability of like product in a variety of shopping channels, we source these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow us to better serve our customers and help us complete sales that otherwise may not have occurred due to out-of-stock positions. As a result of changing customer behavior and the substantial integration of the operations of our store and direct-to-consumer channels, we manage and analyze our performance based on a single omni-channel rather than separate channels and believe that the omni-channel results present the most meaningful and appropriate measure of our performance. Over the next several years we plan to continue to shift investment to the direct-to-consumer channel to align with changing customer preferences.

Our comparable Retail segment net sales data is equal to the sum of our comparable store and comparable direct-to-consumer channel net sales. A store is considered to be comparable if it has been open at least ~~twelve~~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. A direct-to-consumer channel is considered to be comparable if it has been operational for at least ~~twelve~~12 full months. There is no overlap between comparable store net sales and comparable direct-to-consumer net sales. Sales from stores and direct-to-consumer channels that do not fall within the definition of comparable store or channel are considered to be non-comparable. The effects of foreign currency translation are also considered non-comparable.

We monitor customer traffic, average unit selling price, average transactions per store and average units per transaction at our stores, and customer sessions, average order value and conversion rates 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 and digital marketing campaigns, circulation of our catalogs and an overall growth in brand ~~recognition as we expand our store base.~~recognition.

As of ~~October 31, 2016,~~April 30, 2017, we operated 242 Urban Outfitters stores of which ~~180~~181 were located in the United States, 18 were located in Canada and 4443 were located in Europe. For the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, we opened ~~three~~one new Urban Outfitters ~~stores, two located in the United States and one located in Europe,~~store, and we closed one ~~Urban Outfitters~~ store, ~~located~~both in the United States. Total store selling square footage ~~increased 1.6% over~~of 2.2 million square feet was flat compared to the prior year ~~period to 2.2 million square feet.~~period. 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 ~~our~~its stores. Urban Outfitters offers a catalog in Europe offering select merchandise, most of which is also available in our Urban Outfitters stores. Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, websites and ~~websites.~~mobile applications. Urban Outfitters’ product offering includes women’s and men’s fashion apparel, intimates, footwear, beauty and accessories, home goods, activewear and ~~gear, electronics, as well as~~electronics. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of ~~exclusive~~ product ~~through collaborations~~designed internally and designed in collaboration with ~~global~~ third-party brands. ~~We plan to open additional stores over the next several years.~~ Urban Outfitters’ North American and European Retail segment net sales accounted for approximately ~~32.4%~~30.8% and ~~7.4%~~6.6% of consolidated net sales, respectively, for the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, compared to ~~32.4%~~31.8% and ~~7.8%~~7.4%, respectively, for the comparable period in fiscal ~~2016.~~2017.

The Anthropologie Group consists of the Anthropologie, Bhldn and Terrain brands. We initially operated the Bhldn and Terrain brands as standalone concepts and opened two Bhldn stores and two Terrain garden centers. We ultimately determined that the Bhldn and Terrain brands were complementary to the Anthropologie brand and integrated those brands into the Anthropologie Group during fiscal 2015 and 2016, respectively. As of ~~October 31, 2016,~~April 30, 2017, we operated ~~226~~225 Anthropologie Group stores, of which ~~203~~201 were located in the United States, 13 were located in Canada and ~~ten~~11 were located in Europe. For the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, we opened ~~nine~~one new Anthropologie Group ~~stores, seven in the United States, one in Canada and one in Europe,~~store, and we closed one ~~Anthropologie Group~~ store, both located in the United States. Total store selling square footage increased ~~7.7%~~6.8% over the prior year period to 1.7 million square feet driven mainly by the opening of expanded format stores. The Anthropologie Group operates websites and mobile applications in North America and Europe ~~and a mobile application in North America~~ that capture the spirit of ~~our~~its brands by offering a similar yet broader selection of merchandise as found in ~~our~~its stores. The Anthropologie brand offers registry services through ~~our~~its website and mobile ~~applications~~application and in all of ~~our~~its stores throughout the United States, allowing our customers to create gift

registries for any occasion. In addition, the brand offers catalogs in North America and Europe that market select merchandise, most of which is also available in ~~our~~ Anthropologie brand stores. Merchandise at the Anthropologie brand is

tailored to sophisticated and contemporary women aged 28 to 45. Product assortment includes women’s casual apparel and accessories, intimates, shoes, beauty, home furnishings and a diverse array of gifts and decorative items. The Bhldn brand emphasizes every element that contributes to a wedding. The Bhldn brand offers a curated collection of heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie and decorations. 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 ~~garden~~outdoor living products, ~~combined with~~ antiques, live plants, flowers, wellness products and accessories. We plan to open additional Anthropologie Group stores, ~~some of~~ which will ~~be expanded format stores, that allow us to present a broader product offering by presenting~~include all Anthropologie Group brands and ~~by expanding~~allow us to present an expanded assortment of products in certain categories such as petites, jewelry and accessories, footwear, intimates, beauty and home furnishings. The Anthropologie Group’s North American and European Retail segment net sales accounted for approximately ~~39.2%~~39.4% and ~~1.4%~~1.5% of consolidated net sales, respectively, for the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, compared to ~~40.5%~~40.0% and ~~1.6%~~1.4%, respectively, for the comparable period in fiscal ~~2016.~~2017.

As of ~~October 31, 2016,~~April 30, 2017, we operated ~~124~~130 Free People stores, of which ~~118~~124 were located in the United States and six were located in Canada. For the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, we opened 11four new Free People stores, ~~ten located in the United States and one located in Canada,~~ and we closed one ~~Free People~~ store, all located in the United States. Total store selling square footage increased ~~28.5%~~27.2% over the prior year period to ~~244,000 square feet.~~271,000. The increase in selling square footage compared to the prior year period was a result of operating 1213 net new stores, ~~and the addition of~~including expanded format stores, that were not in operation during the prior ~~twelve~~12 month period. Free People operates websites and mobile applications in North America, Europe and Asia that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in ~~our~~its stores, as well as substantially all of the Free People ~~product~~ wholesale offerings. Free People also offers a catalog that markets select merchandise, most of which is also available in our Free People stores. Free People 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, shoes, activewear, accessories, beauty and wellness, home products and gifts. We plan to open additional stores over the next several years, some of which will be expanded format stores that allow us to present an expanded assortment of intimates, shoes, party dresses and activewear. Free People’s Retail segment net sales accounted for approximately ~~10.4%~~11.7% of consolidated net sales for the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, compared to approximately ~~10.1%~~10.8% for the comparable period in fiscal ~~2016.~~2017.

~~In February 2016,~~As of April 30, 2017, we ~~acquired six~~operated 12 restaurants ~~as part of our acquisition of the Vetri Family group of restaurants. During fiscal 2017, our existing cafes were combined with the Vetri Family restaurants to form~~under our Food and Beverage ~~division.~~division, all of which were located in the United States. For the three months ended April 30, 2017, we opened one new restaurant, and we closed one restaurant. The Food and Beverage division focuses on a dining experience that provides excellence in food, beverage and service. ~~For the nine months ended October 31, 2016, we opened two restaurants.~~ The Food and Beverage division net sales accounted for less than 1.0% of consolidated net sales for the ~~nine~~three months ended ~~October 31, 2016.~~April 30, 2017 and the comparable period in fiscal 2017.

We plan to open approximately 3219 new stores during fiscal ~~2017,~~2018, including four Urban Outfitters stores, ~~ten~~four Anthropologie Group stores, 15ten Free People stores and one restaurant. We plan to close approximately eight stores during fiscal 2018, including two Urban Outfitters stores, two Anthropologie Group stores, three ~~restaurants.~~Free People stores and one restaurant. Within the United States and Canada, future new store growth will be driven by the Free People brand, as both Urban Outfitters and Anthropologie brands are at or close to our currently planned total store count. Our growth strategy for the Anthropologie Group will focus on relocation or the conversion of existing stores into expanded format stores. In the future, we plan for new store growth for the Urban Outfitters, Anthropologie and Free People brands to come from modest expansion internationally.

Our Wholesale segment consists of the Free People wholesale division that designs, develops and markets young women’s contemporary casual ~~apparel~~apparel. Free People’s range of tops, bottoms, sweaters, dresses, intimates, shoes and ~~shoes that~~activewear are sold through approximately ~~1,800 better~~1,900 department and specialty stores worldwide, third-party websites and our own Free People stores. Our Wholesale segment net sales accounted for approximately ~~8.5%~~9.3% of consolidated net sales for the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, compared to ~~7.6%~~8.2% for the comparable period in fiscal ~~2016.~~2017.

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 senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our ~~Audit Committee.~~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 for the fiscal year ended January 31, ~~2016,~~2017, which are included in our Annual Report on Form 10-K filed with the SEC on ~~March 31, 2016.~~April 3, 2017. 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. We adopted the new accounting standard related to share-based compensation on February 1, 2017, which changed our accounting policy for forfeitures. (See Note 2, “Recently Issued Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q). Other than the adoption of the new accounting standard, we believe that there have been no significant changes to our critical accounting policies during the ~~nine~~three months ended ~~October 31, 2016.~~April 30, 2017.

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:


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended April 30,
	2016			2015			2016			2015			2017			2016
Net sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		65.2			65.1			64.1			64.9			68.5			65.7

Gross profit		34.8			34.9			35.9			35.1			31.5			34.3
Selling, general and administrative expenses		26.6			25.2			26.4			25.3			28.7			27.7

Income from operations		8.2			9.7			9.5			9.8			2.8			6.6
Other income (expense), net		0.1			0.0			0.0			(0.2	)		0.0			(0.2	)

Income before income taxes		8.3			9.7			9.5			9.6			2.8			6.4
Income tax expense		2.8			3.4			3.4			3.4			1.2			2.5

Net income		5.5	%		6.3	%		6.1	%		6.2	%		1.6	%		3.9	%

Three Months Ended ~~October 31, 2016~~April 30, 2017 Compared To Three Months Ended ~~October 31, 2015~~April 30, 2016

Net sales in the ~~third~~first quarter of fiscal ~~2017 increased by 4.5%~~2018 were $761.2 million, compared to ~~$862.5 million, from $825.3~~$762.6 million in the ~~third~~first quarter of fiscal ~~2016.~~2017. The ~~$37.2~~$1.4 million ~~increase~~decrease was attributable to a ~~$19.5~~$9.8 million, or ~~2.5%~~1.4%, ~~increase~~decrease in Retail segment net sales, ~~and a $17.7~~offset by an $8.4 million, or ~~29.7%~~13.6%, increase in our Wholesale segment net sales. Retail segment net sales for the ~~third~~first quarter of fiscal ~~2017~~2018 accounted for ~~91.0%~~90.7% of total net sales compared to ~~92.8%~~91.8% of total net sales in the ~~third~~first quarter of fiscal ~~2016.~~2017.

The ~~growth~~decline in our Retail segment net sales during the ~~third~~first quarter of fiscal ~~2017~~2018 was due to ~~an increase~~a decrease of ~~$7.3~~$20.4 million, or ~~1.0%~~3.1%, in Retail segment comparable net sales, which includes our direct-to-consumer channel, ~~and~~partially offset by an increase of ~~$12.2~~$10.6 million in non-comparable net sales, including new store net sales. Our sales growth percentage was negatively impacted by approximately 1.0% related to foreign currency translation. Retail segment

comparable net sales increased ~~5.2%~~1.5% at Free People, but decreased 3.1% at Urban Outfitters and ~~decreased 1.5% at Free People and 2.7%~~4.4% at the Anthropologie Group. The ~~increase~~decrease in Retail segment comparable net sales was driven by negative comparable store net sales, which were partially offset by continued growth in the direct-to-consumer ~~channel, which was partially offset by negative~~channel. Negative comparable store net ~~sales.~~sales resulted from decreased transactions and average unit selling price, while units per transaction increased. The direct-to-consumer net sales increase was driven by an increase in sessions and conversion rate, ~~while average order value decreased. Negative comparable store net sales resulted from~~which more than offset a decrease in average ~~unit selling price and transactions, while units per transaction increased.~~order value. The increase in net sales attributable to non-comparable sales was primarily the result of operating 4939 new stores and restaurants during the ~~third~~first quarter of fiscal ~~2017~~2018 that were not in operation for the full comparable quarter in fiscal ~~2016 including sales from the newly acquired Vetri Family restaurants, partially offset by the negative impact of foreign currency translation.~~2017. Thus far during the ~~fourth~~second quarter of fiscal ~~2017,~~2018, comparable Retail segment net sales are ~~low~~high single-digit ~~positive.~~negative.

The increase in Wholesale segment net sales in the ~~third~~first quarter of fiscal ~~2017, as compared to the third quarter of fiscal 2016,~~2018 was primarily due to ~~increased selling square footage~~domestic growth at select department stores to support our category expansions including shoes and activewear. This increase was also attributable to the delay at our recently opened east coast fulfillment center that caused approximately $8.9 million of shipments to move out of the third quarter of fiscal 2016 and into the fourth quarter of fiscal 2016.

Gross profit percentage for the third quarter of fiscal 2017 decreased to 34.8% of net sales, from 34.9% of net sales in the comparable quarter in fiscal 2016. Gross profit increased to $299.9 million in the third quarter of fiscal 2017 compared to $288.2 million in the comparable quarter in fiscal 2016. The reduction in gross profit rate was primarily driven by the increased penetration of the direct-to-consumer channel resulting in increased delivery and overall logistics expense rates. Within gross profit, maintained margins for the quarter were flat compared to the prior year comparable period with lower initial mark-ups offset by lower markdowns. Initial mark-up was lower due to the increased penetration of Wholesale segment net sales which has a lower initial mark-up compared to the Retail segment. Initial mark-up in the Retail segment increased due to improvements at each of the brands. The markdown rate was lower due to lower markdowns at the Urban Outfitters brand, which more than offset higher markdowns at the Free People and Anthropologie brands. The dollar increase in gross profit was due to higher net sales. Total inventory at October 31, 2016 increased by $12.3 million, or 2.8%, to $453.8 million from $441.6 million at October 31, 2015. The increase in inventory is primarily due to an increase in non-comparable inventory to support our new and expanded stores. Comparable Retail segment inventory increased 0.6% at cost.

Selling, general and administrative expenses as a percentage of net sales increased during the third quarter of fiscal 2017 to 26.6% of net sales, compared to 25.2% of net sales for the third quarter of fiscal 2016. The increase in selling, general and administrative expenses as a percentage of net sales was partially due to the net effect of one-time legal settlements, which accounted for approximately 50 basis points of deleverage. The remaining change primarily related to an increase in direct store controllable expenses that were largely due to pre-opening expenses and initial staffing levels for several large format Anthropologie stores opened during the third quarter of fiscal 2017 or previously opened. Selling, general and administrative expenses increased by $21.7 million, or 10.5%, to $229.6 million, in the third quarter of fiscal 2017, from $207.9 million in the third quarter of fiscal 2016. The dollar increase versus the prior year was primarily related to the operating expenses of non-comparable stores, the net effect of one-time legal settlements and increased marketing expense to support our customer acquisition and retention efforts.

~~Income from operations decreased to 8.2% of net sales, or $70.3 million, for the third quarter of fiscal 2017 compared to 9.7%, or $80.3 million, for the third quarter of fiscal 2016.~~

Our effective tax rate for the third quarter of fiscal 2017 was 33.5% of income before income taxes compared to 35.3% of income before income taxes in the third quarter of fiscal 2016. The decrease in the effective tax rate was due to the ratio of foreign taxable losses to global taxable profits for the year.

~~Nine Months Ended October 31, 2016 Compared To Nine Months Ended October 31, 2015~~

Net sales for the nine months ended October 31, 2016 increased by 3.5% to $2.52 billion, from $2.43 billion in the comparable period of fiscal 2016. The $83.9 million increase was attributable to a $54.7 million, or 2.4%, increase in Retail segment net sales and a $29.2 million, or 15.7%, increase in our Wholesale segment net sales. Retail segment net sales for the nine months ended October 31, 2016 accounted for 91.5% of total net sales compared to 92.4% of total net sales during the nine months ended October 31, 2015.

The growth in Retail segment net sales during the first nine months of fiscal 2017 was driven by an increase of $24.2 million, or 1.2%, in Retail segment comparable net sales, which includes our direct-to-consumer channel, and a $30.5 million increase in non-comparable net sales, including new store net sales. Retail segment comparable net sales increased 4.6% at Urban Outfitters, and decreased 0.7% and 1.8% at Free People and the Anthropologie Group, respectively. The increase in the Retail segment comparable net sales was driven by continued growth in the direct-to-consumer channel, partially offset by negative comparable store net sales. Direct-to-consumer net sales were driven by an increase in sessions and conversion rate, while average order value decreased. Negative comparable store net sales resulted from a reduction in transactions and average unit selling price, while units per transaction were flat. The increase in net sales attributable to non-comparable sales was primarily the result of operating 62 new stores during the first nine months of fiscal 2017 that were not in operation for the full comparable first nine months of fiscal 2016 and sales from the newly acquired Vetri Family restaurants, partially offset by the negative impact of foreign currency translation.

The increase in Wholesale segment net sales during the first nine months of fiscal 2017, as compared to the first nine months of fiscal 2016, was primarily due to increased sales to department and specialty stores, driven by increased selling square footage at select department stores and ~~growth in our European distribution.~~specialty stores. Wholesale sales growth was driven by an increase in units that was partially offset by a decrease in average unit selling price.

Gross profit percentage for the first ~~nine months~~quarter of fiscal ~~2017 increased~~2018 decreased to ~~35.9%~~31.5% of net sales, from ~~35.1%~~34.3% of net sales in the comparable ~~period~~quarter in fiscal ~~2016.~~2017. Gross profit ~~increased~~decreased to ~~$904.3~~$239.8 million ~~for~~in the first ~~nine months~~quarter of fiscal ~~2017 compared to $852.7~~2018 from $261.9 million in the comparable ~~period~~quarter in fiscal ~~2016.~~2017. The ~~increase~~decline in gross profit percentage was ~~primarily~~ driven by ~~improvement in maintained margins~~higher markdowns due to underperforming women’s apparel and accessories at the Anthropologie and Urban Outfitters brands, deleverage in delivery and ~~Anthropologie brands~~logistics expenses primarily due to ~~higher initial mark-ups~~the increased penetration of the direct-to-consumer channel, and ~~lower merchandise markdowns compared~~deleverage in store occupancy related to ~~the prior year. The percentage increase was partially offset by lower maintained margins at Free People due to higher merchandise markdowns.~~negative comparable store net sales. The dollar ~~increase~~decrease in gross profit was ~~primarily~~ due to ~~higher net sales and~~ the ~~increase~~decrease in gross profit ~~percentage.~~rate. Total inventory at April 30, 2017 was $359.5 million, flat compared to $359.9 million at April 30, 2016. Comparable Retail segment inventory decreased 3.3% at cost, which was offset by inventory to stock non-comparable stores.

Selling, general and administrative expenses as a percentage of net sales increased during the first ~~nine months~~quarter of fiscal ~~2017~~2018 to ~~26.4%~~28.7% of net sales, compared to ~~25.3%~~27.7% of net sales for the first ~~nine months~~quarter of fiscal 2016. The increase in selling, general and administrative expenses as a percentage of net sales was primarily driven by direct store controllable expenses to support our 5.4% square footage growth and an increase in direct marking and technology related expense to support our direct-to-consumer growth.2017. Selling, general and administrative expenses increased by ~~$49.7~~$7.3 million, or ~~8.1%~~3.5%, to ~~$665.3~~$218.7 million, in the first ~~nine months~~quarter of fiscal ~~2017,~~2018, from ~~$615.6~~$211.4 million in the first ~~nine months~~quarter of fiscal ~~2016.~~2017. The deleverage and dollar increase versus the prior year ~~was~~quarter primarily related to approximately $5.9 million, or 0.8% of net sales, of nonrecurring expenses related to severance and fees associated with our store organization project. This project streamlined our store leadership structure starting in the ~~operating expenses~~first quarter of ~~non-comparable stores and increased marketing and technology expenses, which helped to drive higher direct-to-consumer traffic.~~fiscal 2018.

Income from operations ~~expressed as a percentage~~decreased to 2.8% of net sales, ~~decreased to 9.5% of net sales~~or $21.0 million, for the first ~~nine months~~quarter of fiscal ~~2017~~2018 compared to ~~9.8%~~6.6%, or $50.5 million, for the first ~~nine months~~quarter of fiscal ~~2016. Income from operations increased by $1.9 million, or 0.8%, to $239.0 million, in the first nine months of fiscal 2017, from $237.1 million in the first nine months of fiscal 2016.~~2017.

Our effective tax rate for the first ~~nine months~~quarter of fiscal ~~2017~~2018 was ~~35.7%~~44.1% of income before income taxes compared to ~~35.3%~~39.6% of income before income taxes in the first ~~nine months~~quarter of fiscal ~~2016.~~2017. The increase in the effective tax rate was due to the ratio of foreign taxable losses to global taxable profits in the quarter and the prospective adoption of the new accounting standard related to share-based compensation (See Note 2, “Recently Issued Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statement included in this Quarterly Report on Form 10-Q).

Cash, cash equivalents and marketable securities were ~~$265.1~~$409.4 million as of ~~October 31, 2016,~~April 30, 2017, as compared to ~~$362.9~~$403.5 million as of January 31, ~~2016~~2017 and ~~$273.3~~$306.4 million as of ~~October~~April 30, 2016. Our working capital was $571.4 million at April 30, 2017 compared to $528.5 million at January 31, ~~2015.~~2017 and $467.2 million at April 30, 2016. The ~~decrease~~increase in working capital as of April 30, 2017 compared to January 31, 2017 was primarily due to

the increase in accounts receivable related to the timing of credit card receivables settlements. The increase in working capital during the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily due to the increase in cash, cash equivalents and marketable securities as compared to January 31, 2016 was primarily due to cash used for the repayment of long-term debt and for share repurchases. Our working capital was $484.8 million at October 31, 2016 compared to $505.1 million at January 31, 2016 and $469.3 million at October 31, 2015. The decrease in working capital as compared to January 31, 2016 was primarily due to the decrease in cash, cash equivalents and marketable securities, noted above.securities.

During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating activities. In fiscal 2016, we utilized borrowings on our long-term debt facility as an additional source of cash that were used for the repurchase of our common shares. In addition to repurchasing common shares, ourOur primary uses of cash have been to repay our long-term debt, open new stores, purchase inventory and expand our ~~home offices and~~ fulfillment facilities. We have also continued to invest in our omni-channel capabilities and technology.

Cash provided by operating activities during the first ~~nine months~~quarter of fiscal ~~2017 increased~~2018 decreased by ~~$0.4~~$57.1 million to ~~$229.0~~$13.0 million from ~~$228.6~~$70.1 million in the first ~~nine months~~quarter of fiscal ~~2016.~~2017. For both periods, our major source of cash from operations was merchandise sales and our primary outflow of cash for operations was for the payment of operational costs. The period over period decrease in cash flows from operations was primarily due to lower net income and the timing of credit card receivables settlements.

Cash used in investing activities during the first ~~nine months~~quarter of fiscal ~~2017 increased~~2018 decreased by ~~$34.9~~$17.6 million to ~~$61.3~~$8.9 million from ~~$26.4~~$26.5 million in the first ~~nine months~~quarter of fiscal ~~2016. For both periods, our primary outflow of cash for investing activities was for the payment of property and equipment.~~2017. Cash paid for property and equipment for the nine months ended October 31, 2016 and 2015 was $112.1 million and $109.1 million, respectively, and was used in fiscal 2017 primarily to expand our store base and in fiscal 2016 primarily to expand our store base and home offices and to increase our fulfillment capabilities. Additionally, the increase in cash used in investing activities ~~was driven~~in both periods 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 quarter of fiscal 2017 also included $15.3 million used to acquire the Vetri Family group of ~~restaurants~~restaurants. Cash paid for property and ~~a $16.6~~equipment in the first quarter of fiscal 2018 and 2017 was $23.5 million ~~change~~and $31.1 million, respectively, which was primarily used to expand our store base in ~~net purchases of marketable securities.~~fiscal 2018 and to expand our store base and fulfillment facilities in fiscal 2017.

Cash used in financing activities during the first ~~nine months~~quarter of fiscal 2018 decreased by $82.1 million to $1.1 million from $83.2 million in the first quarter of fiscal 2017. Cash used in financing activities in the first quarter of fiscal 2018 was for share repurchases related to taxes for share-based awards. Cash used in financing activities in the first quarter of fiscal 2017 ~~was $193.4 million,~~ primarily related to ~~$150.0~~$75.0 million in ~~long-term~~ debt repayments and ~~$45.8~~$10.7 million of repurchases of our common shares under ~~our February 23, 2015~~the Board of Directors approved share repurchase program.

On July 1, 2015, we entered into a five-year asset-based revolving Credit Agreement (“Credit Agreement”) with certain lenders, including JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities LLC and Wells Fargo Bank, National Association, as joint lead arrangers and co-book managers. The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400.0 million (the “Credit Facility”), subject to a borrowing base that is comprised of our eligible accounts receivable and inventory. The Credit Facility includes a swing-line sub-facility, a multicurrency sub-facility and the option to expand the facility by up to $150.0 million. The funds available under the Credit Facility may be used for working capital and other general corporate purposes.

The 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 1.625%, or (ii) an adjusted ABR plus an applicable margin ranging from 0.125% to 0.625%, each such rate based on the level of availability under the Credit Facility and our adjusted leverage ratio. Interest is payable either monthly or quarterly depending on the type of borrowing. A commitment fee is payable quarterly on the unused portionSee Note 6, “Debt,” of the ~~Credit Facility based~~Notes to our Condensed Consolidated Financial Statement included in this Quarterly Report on ~~our adjusted leverage ratio.~~

~~All obligations under~~Form 10-Q for additional information regarding the Credit Facility are unconditionally guaranteed by us and our domestic subsidiaries. The obligations under the Credit Facility are secured by a first-priority security interest in inventory, accounts receivable, and certain other assets of the borrowers and guarantors. The Credit Agreement contains customary representations and warranties, negative and affirmative covenants and provisions relating to events of default.

~~As of October 31, 2016, we were in compliance with all terms of the Credit Agreement, we had no borrowings on the Credit Facility and stand-by letters of credit outstanding were $13.1 million.~~

Additionally, we have borrowing agreements with two separate financial institutions under which we may borrow an aggregate of $130.0 million for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions. As of October 31, 2016, we had $66.0 million in outstanding trade letters of credit, and $64.0 million available for future trade letters of credit under these facilities.Company’s debt.

During fiscal ~~2017,~~2018, we plan to construct and open approximately 3219 new stores, including ~~our~~one restaurant, ~~locations,~~ expand certain existing stores, ~~complete the construction of our new east coast fulfillment center,~~repurchase common shares, upgrade our systems, improve our capabilities in the digital channel, invest in omni-channel marketing and purchase inventory for our Retail and Wholesale segments at levels appropriate to maintain our planned sales growth. We believe that our marketing, social media, merchandise expansion and website and mobile initiatives are a significant contributor to our Retail segment sales growth. During fiscal ~~2017,~~2018, we plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal ~~2017~~2018 to be approximately ~~$160~~$90 million, all of which are expected to be financed by cash flow from operating activities. We believe that our new store investments 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. We believe that our existing cash and cash equivalents, available credit facilities and future cash flows from operations will be sufficient to fund these initiatives.

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

As of and for the ~~nine~~three months ended ~~October 31, 2016,~~April 30, 2017, except for operating leases entered into in the normal course of business, we were not party to any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

See Note 2, “Recently Issued Accounting Pronouncements,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements.

We are 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 our inventory turnover rate and our historical ability to pass through the impact of any generalized changes in our cost of goods to our customers through pricing adjustments, commodity and other product risks are not expected to be material. We purchase the majority of our merchandise in U.S. dollars, including a majority of the goods for our stores located in Canada and a portion of the goods for our stores located in Europe.

Our exposure to market risk for changes in foreign currencies is due to our financial statements being presented in U.S. dollars and our international subsidiaries transacting in currencies other than U.S. dollars. Fluctuations in exchange rates in effect during or at the end of the reporting period may affect the value of the reported amounts of revenues, expenses, assets and liabilities. As we expand our international operations, the potential impact of currency fluctuations increases.

Our exposure to market risk for changes in interest rates relates to our cash, cash equivalents and marketable securities and our Credit Facility. As of ~~October 31, 2016,~~April 30, 2017, our cash, cash equivalents and marketable securities consisted primarily of cash on hand and in banks, money market accounts, municipal and pre-refunded municipal bonds rated “BBB” or better, corporate bonds rated “BBB” or better, certificates of deposit and mutual funds. Due to the short average maturity and conservative nature of our investment portfolio, we believe a 100 basis point change in interest rates would not have a material effect on the Condensed Consolidated Financial Statements. As the interest rates on a material portion of our cash, cash equivalents and marketable securities are variable, a change in interest rates earned on the cash, cash equivalents and marketable securities would impact interest income along with cash flows, but would not impact the fair market value of the related underlying instruments.

We are exposed to market risks relating to changes in interest rates on outstanding borrowings under our Credit Facility because these borrowings bear interest at variable rates. A 100 basis point change in our applicable interest rate would not have a material impact to interest expense for the ~~nine~~three months ended ~~October 31, 2016.~~April 30, 2017.

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 quarter ended ~~October 31, 2016~~April 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

We are party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows.

There have been no material changes in our risk factors since January 31, ~~2016.~~2017. Please refer to our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2016,~~2017, filed with the United States Securities and Exchange Commission on ~~March 31, 2016,~~April 3, 2017, for our risk factors.

~~A summary of the repurchase activity under the Company’s share repurchase program for the quarter ended October 31, 2016 is as follows:~~

On December 12, 2016, the Company’s Board of Directors (the “Board”) amended and restated the Company’s Second Amended and Restated By-laws (the “By-laws”) to implement “proxy access,” a means for the Company’s eligible shareholders to include shareholder-nominated director candidates in the Company’s proxy materials for annual meetings of shareholders (the “Amendments”). The Amendments took effect immediately upon approval by the Board. The Amendments were undertaken in response to the approval by shareholders at the Company’s 2016 Annual Meeting of Shareholders of a non-binding shareholder proposal to adopt proxy access.

Section 1.10 has been added to the By-laws to allow a shareholder, or a group of up to 20 shareholders, owning at least 3% of the number of outstanding common shares of the Company continuously for at least three

years, to include in the Company’s proxy materials for an annual meeting of shareholders a number of director nominees up to the greater of two or 25% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified therein. Certain conforming and technical amendments were also made to the By-laws.

The foregoing description of the Amendments is qualified in its entirety by the full text of the Amended and Restated By-laws, a copy of which is filed as Exhibit 3.4 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Attached as Exhibits 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the three ~~and nine~~ months ended ~~October 31, 2016,~~April 30, 2017, filed with the Securities and Exchange Commission on ~~December 12, 2016,~~June 8, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statement of Shareholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

Pursuant to the requirements 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.


Pennsylvania		23-2003332
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

5000 South Broad Street, Philadelphia, PA		19112-1495
(Address of Principal Executive Offices)		(Zip Code)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐


Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of ~~October 31, 2016,~~April 30, 2017, January 31, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016	1

	Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2017 and 2016 ~~and 2015~~	2

	Condensed Consolidated Statements of Comprehensive Income for the three months ended April 30, 2017 and ~~nine months ended October 31,~~ 2016 ~~and 2015~~	3

	Condensed Consolidated Statement of Shareholders’ Equity for the ~~nine~~three months ended ~~October 31, 2016~~April 30, 2017	4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~October 31,~~April 30, 2017 and 2016 ~~and 2015~~	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2523

Item 4.	Controls and Procedures	2524

PART II OTHER INFORMATION			��

Item 1.	Legal Proceedings	2625

Item 1A.	Risk Factors	26

~~Item 2.~~	~~Unregistered Sales of Equity Securities and the Use of Proceeds~~	26

~~Item 5.~~	~~Other Information~~	2625

Item 6.	Exhibits	2726

	Signatures	2827


	Total Number of Shares (or Units) Purchased⁽¹⁾		Average Price Paid per share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs⁽²⁾
August 1, 2016 through August 31, 2016		—	$	—		—		6,995,059
September 1, 2016 through September 30, 2016		957,327	$	35.10		957,327		6,037,732
October 1, 2016 through October 31, 2016		42,673	$	34.77		42,673		5,995,059

Total Fiscal 2017 Third Quarter		1,000,000				1,000,000		5,995,059


Exhibit Number		Description

3.1		Amended and Restated Articles of Incorporation are incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.2		Amendment No. 1 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.3		Amendment No. 2 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 31, 2013.

3.4*3.4		Amended and Restated By-laws are incorporated by reference to Exhibit 3.4 of ~~Urban Outfitters, Inc.~~the Company’s Quarterly Report on Form 10-Q filed on December 12, 2016.

31.1*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer.

32.1**		Section 1350 Certification of the Principal Executive Officer.

32.2**		Section 1350 Certification of the Principal Financial Officer.

101.INS*		XBRL Instance Document.

101.SCH*		XBRL Taxonomy Extension Schema.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase.

101.LAB*		XBRL Taxonomy Extension Label Linkbase.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase.



		URBAN OUTFITTERS, INC.

Date: ~~December 12, 2016~~June 8, 2017	By:		/S/ FRANCIS J. CONFORTI
			Francis J. Conforti
			Chief Financial Officer ~~(Principal Financial Officer)~~


Exhibit Number		Description

3.1		Amended and Restated Articles of Incorporation are incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.2		Amendment No. 1 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (file no. 000-22754) filed on September 9, 2004.

3.3		Amendment No. 2 to Amended and Restated Articles of Incorporation is incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 31, 2013.

3.4*3.4		Amended and Restated By-laws are incorporated by reference to Exhibit 3.4 of ~~Urban Outfitters, Inc.~~the Company’s Quarterly Report on Form 10-Q filed on December 12, 2016.

31.1*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer.

32.1**		Section 1350 Certification of the Principal Executive Officer.

32.2**		Section 1350 Certification of the Principal Financial Officer.

101.INS*		XBRL Instance Document.

101.SCH*		XBRL Taxonomy Extension Schema.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase.

101.LAB*		XBRL Taxonomy Extension Label Linkbase.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase.

URBAN OUTFITTERS, INC.

Date: ~~December 12, 2016~~June 8, 2017

/S/ RICHARD A. HAYNE

Richard A. Hayne

Chief Executive Officer
~~(Principal Executive Officer)~~