URBAN OUTFITTERS INC Earnings Per Share Disclosure
14. Net Income Per Common Share
Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per common share is calculated by dividing net income by the weighted-average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company's stock options, performance stock units and restricted stock units. 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:
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Fiscal Year Ended January 31, |
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2025 |
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2024 |
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2023 |
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Net income |
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$ |
402,462 |
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$ |
287,674 |
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$ |
159,699 |
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Basic weighted-average common shares |
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92,684,127 |
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92,697,751 |
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93,199,874 |
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Effect of dilutive options, performance stock units |
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1,763,919 |
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1,630,034 |
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944,188 |
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Diluted weighted-average shares outstanding |
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94,448,046 |
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94,327,785 |
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94,144,062 |
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Net income per common share: |
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Basic |
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$ |
4.34 |
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$ |
3.10 |
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$ |
1.71 |
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Diluted |
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$ |
4.26 |
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$ |
3.05 |
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$ |
1.70 |
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For the fiscal years ended January 31, 2025, 2024 and 2023, awards to purchase 30,000 common shares at a price of $46.42, awards to purchase 60,000 common shares ranging in price from $28.47 to $46.42 and awards to purchase 182,500 common shares ranging in price from $23.74 to $46.42, respectively, were excluded from the calculation of diluted net income per common share because the impact would be anti-dilutive.
As of January 31, 2025 and 2024, 270,441 and 272,554 contingently issuable awards, respectively, were excluded from the calculation of diluted net income per common share as they did not meet certain performance criteria.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.