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: overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom’s withdrawal from membership in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war including geopolitical instability and impacts of the war between Russia and Ukraine and from related sanctions imposed by the United States, European Union, United Kingdom and others, terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises (such as the coronavirus (COVID-19)), labor shortages and increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs, border adjustment taxes or increases in duties or quotas), the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the SEC, including those set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed on April 3, 2023. We disclaim any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.
Unless the context otherwise requires, all references to the “Company,” “we,” “us” or “our” refer to Urban Outfitters, Inc., together with its subsidiaries.
Overview
We operate under three reportable segments – Retail, Wholesale and Nuuly. Our Retail segment consists of our Anthropologie, Free People, FP Movement, Terrain and Urban Outfitters brands. Our Retail segment consumer products and services are sold directly to our customers through our retail locations, websites, mobile applications, social media and third-party digital platforms, catalogs and customer contact centers and franchisee-owned stores. The Wholesale segment consists of our Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets apparel, intimates, activewear and shoes. Our Nuuly segment consists of the Nuuly brand, which offers customers a more sustainable way to explore fashion. Nuuly Rent is a monthly women’s apparel subscription rental service.
Our fiscal year ends on January 31. All references to our fiscal years refer to the fiscal years ended on January 31 in those years. For example, our fiscal year 2024 will end on January 31, 2024, and our fiscal year 2023 ended on January 31, 2023.
17
Retail Segment
Our Retail segment omni-channel strategy enhances our customers’ brand experience by providing a seamless approach to the customer shopping experience. All available Company-owned Retail segment shopping channels are fully integrated, including retail locations, websites, mobile applications, catalogs and customer contact centers. Our investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the Retail segment omni-channel and not the separate store or digital channels. We manage and analyze our performance based on a single Retail segment omni-channel rather than separate channels and believe that the Retail segment omni-channel results present the most meaningful and appropriate measure of our performance.
Our comparable Retail segment net sales data is equal to the sum of our comparable store and comparable digital channel net sales. A store is considered to be comparable if it has been open at least 12 full months, unless it was materially expanded or remodeled within that year or was not otherwise operating at its full capacity within that year due to store specific closures from events such as damage from fire, flood and natural weather events. A digital channel is considered to be comparable if it has been operational for at least 12 full months. Sales from stores and digital channels that do not fall within the definition of comparable store or digital channel are considered to be non-comparable. Franchise net sales and the effects of foreign currency translation are also considered non-comparable.
We monitor Retail segment metrics including customer traffic, conversion rates, average units per transaction at our stores and on our websites and mobile applications and average unit selling price at our stores and average order value on our websites and mobile applications. We believe that changes in any of these metrics may be caused by a response to our brands’ fashion offerings, our marketing campaigns, circulation of our catalogs and an overall growth in brand recognition.
Urban Outfitters targets young adults aged 18 to 28 through a unique merchandise mix, compelling store environment, social media and third-party digital platforms, websites and mobile applications and a product offering that includes women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics and beauty. A large portion of our merchandise is exclusive to Urban Outfitters, consisting of an assortment of products designed internally or designed in collaboration with third-party brands. Urban Outfitters stores are in street locations in large metropolitan areas and select university communities, specialty centers and enclosed malls that accommodate our customers’ propensity not only to shop, but also to congregate with their peers. Urban Outfitters operates websites and mobile applications in North America and Europe that capture the spirit of the brand by offering a similar yet broader selection of merchandise as found in its stores and sells merchandise through franchisee-owned stores in the Middle East. Urban Outfitters’ North American Retail segment net sales accounted for approximately 19.2% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 24.7% for the comparable period in fiscal 2023. European Retail segment net sales accounted for 8.0% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 8.9% for the comparable period in fiscal 2023.
The Anthropologie Group consists of the Anthropologie and Terrain brands. Merchandise at the Anthropologie brand is tailored to sophisticated and contemporary women aged 28 to 45. The internally designed and third-party brand product assortment includes women’s apparel, accessories, intimates, shoes, home furnishings, a diverse array of gifts and decorative items and beauty and wellness. The brand also has a wedding collection consisting of wedding, bridesmaid and party dresses, bridal accessories and decor. The Terrain brand is designed to appeal to women and men interested in a creative and sophisticated outdoor living and gardening experience. Merchandise includes lifestyle home, garden and outdoor living products, antiques, live plants, flowers, wellness products and accessories. Anthropologie Group stores are located in specialty centers, upscale street locations and enclosed malls. The Anthropologie Group operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, offers a catalog in North America that markets select merchandise, most of which is also available in Anthropologie brand stores and sells merchandise through franchisee-owned stores in the Middle East. The Anthropologie Group’s North American Retail segment net sales accounted for approximately 41.0% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 38.1% for the comparable period in fiscal 2023. European Retail segment net sales accounted for 1.5% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 1.8% for the comparable period in fiscal 2023.
The Free People Group consists of the Free People and FP Movement brands. The Free People brand focuses its product offering on private label merchandise targeted to young contemporary women aged 25 to 30 and provides
18
a unique merchandise mix of casual women’s apparel, intimates, FP Movement activewear, shoes, accessories, home products, gifts and beauty and wellness. The FP Movement brand offers performance-ready activewear, beyond-the-gym staples and wellness essentials. Free People Group stores are located in enclosed malls, upscale street locations and specialty centers. The Free People Group operates websites and mobile applications in North America and Europe that capture the spirit of its brands by offering a similar yet broader selection of merchandise as found in its stores, as well as substantially all of the Free People and FP Movement wholesale offerings. The Free People Group also offers catalogs that market select merchandise, most of which is also available in our Free People and FP Movement stores. The Free People Group’s North American Retail segment net sales accounted for approximately 19.0% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 16.8% for the comparable period in fiscal 2023. European Retail segment net sales accounted for less than 1.0% of consolidated net sales for the three months ended April 30, 2023, and the comparable period in fiscal 2023.
Net sales from the Retail segment accounted for approximately 90.2% of consolidated net sales for the three months ended April 30, 2023, compared to 91.6% for the comparable period in fiscal 2023.
Store data for the three months ended April 30, 2023 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, |
|
|
Stores |
|
|
Stores |
|
|
April 30, |
|
|
|
2023 |
|
|
Opened |
|
|
Closed |
|
|
2023 |
|
Urban Outfitters |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
183 |
|
|
|
— |
|
|
|
(2 |
) |
|
|
181 |
|
Canada |
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
18 |
|
Europe |
|
|
62 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
61 |
|
Urban Outfitters Global Total |
|
|
263 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
260 |
|
Anthropologie Group |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
207 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
206 |
|
Canada |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Europe |
|
|
21 |
|
|
|
— |
|
|
|
— |
|
|
|
21 |
|
Anthropologie Group Global Total |
|
|
238 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
237 |
|
Free People Group |
|
|
|
|
|
|
|
|
|
|
|
|
United States (1) |
|
|
174 |
|
|
|
4 |
|
|
|
— |
|
|
|
178 |
|
Canada |
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Europe |
|
|
11 |
|
|
|
1 |
|
|
|
— |
|
|
|
12 |
|
Free People Group Global Total |
|
|
188 |
|
|
|
5 |
|
|
|
— |
|
|
|
193 |
|
Menus & Venues (2) |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
11 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
10 |
|
Menus & Venues Total |
|
|
11 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
10 |
|
Total Company-Owned Stores |
|
|
700 |
|
|
|
5 |
|
|
|
(5 |
) |
|
|
700 |
|
Franchisee-Owned Stores (3) |
|
|
8 |
|
|
|
1 |
|
|
|
— |
|
|
|
9 |
|
Total URBN |
|
|
708 |
|
|
|
6 |
|
|
|
(5 |
) |
|
|
709 |
|
(1)Two FP Movement stores were opened during the three months ended April 30, 2023. 33 FP Movement stores were open as of April 30, 2023.
(2)The Menus & Venues brand includes various casual restaurants and event venues.
(3)Franchisee-owned stores are located in the Middle East.
19
Selling square footage by brand as of April 30, 2023 and 2022 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
|
April 30, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
Change |
|
Selling square footage (in thousands): |
|
|
|
|
|
|
|
|
|
Urban Outfitters |
|
|
2,249 |
|
|
|
2,270 |
|
|
|
-0.9 |
% |
Anthropologie Group |
|
|
1,805 |
|
|
|
1,810 |
|
|
|
-0.3 |
% |
Free People Group (1) |
|
|
404 |
|
|
|
368 |
|
|
|
9.8 |
% |
Total URBN (2) |
|
|
4,458 |
|
|
|
4,448 |
|
|
|
0.2 |
% |
(1)Selling square footage for FP Movement was 44 and 27 as of April 30, 2023 and 2022, respectively.
(2)Menus & Venues locations and franchisee-owned stores are not included in selling square footage.
We plan for future store growth for all three brands to come from expansion domestically and internationally, which may include opening stores in new and existing markets or entering into additional franchise or joint venture agreements. We plan for future digital channel growth to come from expansion domestically and internationally.
Projected openings and closings for fiscal 2024 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, |
|
|
Projected |
|
|
Projected |
|
|
January 31, |
|
|
|
2023 |
|
|
Openings |
|
|
Closings |
|
|
2024 |
|
Urban Outfitters |
|
|
263 |
|
|
|
7 |
|
|
|
(12 |
) |
|
|
258 |
|
Anthropologie Group |
|
|
238 |
|
|
|
10 |
|
|
|
(7 |
) |
|
|
241 |
|
Free People Group (1) |
|
|
188 |
|
|
|
15 |
|
|
|
(4 |
) |
|
|
199 |
|
Menus & Venues |
|
|
11 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
11 |
|
Total Company-Owned Stores |
|
|
700 |
|
|
|
33 |
|
|
|
(24 |
) |
|
|
709 |
|
Franchisee-Owned Stores |
|
|
8 |
|
|
|
1 |
|
|
|
— |
|
|
|
9 |
|
Total URBN |
|
|
708 |
|
|
|
34 |
|
|
|
(24 |
) |
|
|
718 |
|
(1)Includes eight FP Movement projected store openings.
Wholesale Segment
Our Wholesale segment consists of the Free People, FP Movement and Urban Outfitters brands that sell through department and specialty stores worldwide, third-party digital businesses and our Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People Group brand and the BDG and “iets frans” brand apparel collections under the Urban Outfitters brand. Our Wholesale segment net sales accounted for approximately 5.2% of consolidated net sales for the three months ended April 30, 2023, compared to 6.2% for the comparable period in fiscal 2023.
Nuuly Segment
Our Nuuly segment consists of the Nuuly brand. Nuuly Rent is a monthly women’s apparel subscription rental service. For a monthly fee, Nuuly subscribers can select rental product from a wide selection of the Company’s own brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like and then swap into new products the following month. Subscribers are also able to purchase the rented product. Our Nuuly segment net sales accounted for approximately 4.6% of consolidated net sales for the three months ended April 30, 2023, compared to approximately 2.2% for the comparable period in fiscal 2023.
20
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States. These generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period.
Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. Our significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended January 31, 2023, which are included in our Annual Report on Form 10-K filed with the SEC on April 3, 2023. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. We are not currently aware of any reasonably likely events or circumstances that would cause our actual results to be materially different from our estimates. There have been no significant changes to our critical accounting policies during the three months ended April 30, 2023.
Results of Operations
As a Percentage of Net Sales
The table below sets forth, for the periods indicated, certain income statement data and the percentage of our net sales represented by such data. The table should be read in conjunction with the discussion that follows.
Three Months Ended April 30, 2023 (Fiscal 2024) Compared To
Three Months Ended April 30, 2022 (Fiscal 2023)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions) |
Three Months Ended |
|
April 30, |
|
2023 |
|
2022 |
Net sales |
$ |
1,113.7 |
|
|
|
100.0 |
|
% |
|
$ |
1,051.9 |
|
|
|
100.0 |
|
% |
Cost of sales |
|
742.5 |
|
|
66.7 |
|
|
|
|
728.6 |
|
|
|
69.3 |
|
|
Gross profit |
|
371.2 |
|
|
|
33.3 |
|
|
|
|
323.3 |
|
|
|
30.7 |
|
|
Selling, general and administrative expenses |
|
299.8 |
|
|
26.9 |
|
|
|
|
277.1 |
|
|
|
26.3 |
|
|
Income from operations |
|
71.4 |
|
|
|
6.4 |
|
|
|
|
46.2 |
|
|
|
4.4 |
|
|
Other income (loss), net |
|
1.0 |
|
|
|
0.1 |
|
|
|
|
(2.0 |
) |
|
(0.2) |
|
|
Income before income taxes |
|
72.4 |
|
|
|
6.5 |
|
|
|
|
44.2 |
|
|
|
4.2 |
|
|
Income tax expense |
|
19.6 |
|
|
1.8 |
|
|
|
|
12.7 |
|
|
|
1.2 |
|
|
Net income |
$ |
52.8 |
|
|
|
4.7 |
|
% |
|
$ |
31.5 |
|
|
|
3.0 |
|
% |
Net sales for the first quarter of fiscal 2024 were $1.11 billion, compared to $1.05 billion in the first quarter of fiscal 2023. The $61.7 million increase was attributable to a $40.6 million, or 4.2%, increase in Retail segment net sales and an increase in Nuuly segment net sales of $28.6 million, or 125.3%, partially offset by a $7.5 million, or 11.5%, decrease in Wholesale segment net sales. Retail segment net sales for the first quarter of fiscal 2024 accounted for 90.2% of total net sales compared to 91.6% of total net sales in the first quarter of fiscal 2023.
The increase in our Retail segment net sales during the first quarter of fiscal 2024 was due to an increase of $41.9 million, or 4.5%, in Retail segment comparable net sales, partially offset by a decrease of $1.3 million in non-comparable net sales. Retail segment comparable net sales increased 17.4% at the Free People Group and 13.4% at the Anthropologie Group and decreased 13.1% at Urban Outfitters. Retail segment comparable net sales increased in North America and decreased in Europe. The overall increase in Retail segment comparable net sales was driven by high single-digit positive digital channel sales and low single-digit positive retail store sales. The digital channel net sales increase was driven by increases in sessions and average order value, while conversion rate and units per transaction decreased. Comparable store net sales increased as higher store traffic and average unit retail price were
21
partially offset by a decrease in conversion rate, units per transaction and transactions. The decrease in non-comparable net sales during the first quarter of fiscal 2024 was primarily due to the negative impact of foreign currency translation, partially offset by the 38 new Company-owned stores and restaurants opened and 20 Company-owned stores and restaurants closed since the prior comparable period.
The decrease in Wholesale segment net sales in the first quarter of fiscal 2024, as compared to the first quarter of fiscal 2023, was due to a $8.9 million, or 14.4%, decrease in sales for the Free People Group, partially offset by a $1.3 million increase in Urban Outfitters wholesale sales. The Free People Group wholesale sales decrease was primarily due to a decrease in sales to department stores and specialty stores. The increase in Nuuly segment net sales was due to a 118% increase in our subscribers as of the current quarter end versus the end of the prior year's comparable quarter.
Gross profit percentage for the first quarter of fiscal 2024 increased to 33.3% of net sales, from 30.7% of net sales in the first quarter of fiscal 2023. Gross profit increased to $371.2 million in the first quarter of fiscal 2024 from $323.3 million in the first quarter of fiscal 2023. The increase in gross profit rate was primarily due to higher initial merchandise markups at all three brands primarily driven by lower inbound transportation costs due in part to the adverse impact COVID-19 had on the global supply chain environment in the prior year period. Gross profit rate also benefitted from lower merchandise markdowns at the Anthropologie Group and Free People Group brands. The increase in gross profit dollars was due to higher net sales and improved gross profit rate.
Total inventory at April 30, 2023, as compared to April 30, 2022, decreased by $39.6 million, or 6.3%, to $590.3 million. Retail segment inventory decreased by 4.5% primarily due to better inventory control supported by a more reliable supply chain. Wholesale segment inventory decreased by 22.9% in line with the reduction in wholesale sales.
Selling, general and administrative expenses increased by $22.8 million, or 8.2%, in the first quarter of fiscal 2024, compared to the first quarter of fiscal 2023. Selling, general and administrative expenses as a percentage of net sales increased in the first quarter of fiscal 2024 to 26.9% of net sales, compared to 26.3% of net sales for the first quarter of fiscal 2023. The deleverage in selling, general and administrative expenses as a rate to sales and the dollar growth in selling, general and administrative expenses were primarily related to higher compensation costs, including higher incentive-based compensation costs due to improved Company performance. The dollar growth in selling, general and administrative expenses was also driven by increased marketing expenses to support increased sales and customer growth.
Income from operations was 6.4% of net sales, or $71.4 million, for the first quarter of fiscal 2024 compared to 4.4% of net sales, or $46.2 million, for the first quarter of fiscal 2023. The increase in operating income rate was primarily due to the higher gross profit rate. The increase in dollars was primarily driven by the increase in net sales and the higher gross profit rate.
Our effective tax rate for the first quarter of fiscal 2024 was 27.1% compared to 28.7% in the first quarter of fiscal 2023. The change in effective tax rate for the three months ended April 30, 2023 was attributable to the ratio of foreign taxable earnings to global taxable earnings and the favorable impact of general business credits in the current year.
22
Liquidity and Capital Resources
The following tables set forth certain balance sheet and cash flow data for the periods indicated. These tables should be read in the conjunction with the discussion that follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions) |
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Cash, cash equivalents and marketable securities |
|
$ |
467.6 |
|
|
$ |
485.5 |
|
|
$ |
438.7 |
|
Working capital |
|
|
373.6 |
|
|
|
347.3 |
|
|
|
288.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
|
|
2023 |
|
|
2022 |
|
Net cash provided by (used in) operating activities |
|
$ |
36.3 |
|
|
$ |
(79.6 |
) |
Net cash (used in) provided by investing activities |
|
|
(57.5 |
) |
|
|
13.6 |
|
Net cash used in financing activities |
|
|
(8.3 |
) |
|
|
(68.7 |
) |
The increase in working capital as of April 30, 2023, as compared to January 31, 2023, was primarily due to the timing of accounts receivable. The increase in working capital as of April 30, 2023, as compared to April 30, 2022, was primarily due to the increase in cash, cash equivalents and current marketable securities.
During the last two years, we have satisfied our cash requirements primarily through our cash flow from operating activities and through the sales and maturities of marketable securities. Our primary uses of cash have been to fund business operations, purchase inventory and rental product, expand our fulfillment centers, open new stores and repurchase our common shares.
Cash Flows from Operating Activities
Our major source of cash from operations was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs. The change in cash provided by operating activities in the first three months of fiscal 2024 compared to cash used in operating activities in the first three months of fiscal 2023 was primarily due to lower inventory purchases in the first three months of fiscal 2024, the timing of disbursements and higher net income.
Cash Flows from Investing Activities
Cash used in investing activities in the first three months of fiscal 2024 primarily related to purchases of marketable securities, property and equipment and the initial cash payment for a tax credit investment, partially offset by the sales and maturities of marketable securities. Cash provided by investing activities in the first three months of fiscal 2023 primarily related to the sales and maturities of marketable securities, partially offset by purchases of property and equipment and marketable securities. Cash paid for property and equipment in the first three months of fiscal 2024 and 2023 was $32.9 million and $73.7 million, respectively, which was primarily used to expand our store base and fulfillment center network in fiscal 2024 and our fulfillment center network in fiscal 2023.
Cash Flows from Financing Activities
Cash used in financing activities in the first three months of fiscal 2024 primarily related to repurchases of our common shares from employees to meet payroll tax withholding requirements on vested awards. Cash used in financing activities in the first three months of 2023 primarily related to repurchases of our common shares under our share repurchase programs and from employees to meet payroll tax withholding requirements on vested awards.
23
Credit Facilities
See Note 5, “Debt,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s debt.
Capital and Operating Expenditures
During fiscal 2024, we plan to complete construction on a new omni-channel fulfillment center in Kansas City, Kansas, open approximately 33 new Company-owned retail locations, expand or relocate certain existing retail locations, increase capacity at our Bristol, Pennsylvania Nuuly fulfillment center and invest in a new Nuuly fulfillment center in Raymore, Missouri in response to growth in the number of Nuuly subscribers, invest in new products, markets and brands, purchase inventory and rental product for our operating segments at levels appropriate to maintain our planned sales, upgrade our systems, improve and expand our digital capabilities and invest in omni-channel marketing when appropriate. We may also repurchase common shares. We believe that our new brand initiatives, new store openings, merchandise expansion programs, international growth opportunities and our marketing, social media, website and mobile initiatives are significant contributors to our sales. During fiscal 2024, we plan to continue our investment in these initiatives for all brands. We anticipate our capital expenditures during fiscal 2024 to be approximately $230 million, primarily to support new and expanded fulfillment and distribution centers and new store openings. All fiscal 2024 capital expenditures are expected to be financed by cash flow from operating activities and existing cash and cash equivalents. We believe that our new store investments generally have the potential to generate positive cash flow within a year. We may also enter into one or more acquisitions or transactions related to the expansion of our brand offerings, including additional franchise and joint venture agreements. We believe that our existing cash and cash equivalents, availability under our current credit facilities and future cash flows provided by operations will be sufficient to fund these initiatives.
Share Repurchases
See Note 8, “Shareholders’ Equity,” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company’s share repurchases.
Other Matters
See Note 1, “Basis of Presentation,” Recent Accounting Pronouncements, of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements.