Abercrombie & Fitch 2010 Annual Report Download - page 10
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Table of Contents
• if we are unable to anticipate, identify and respond to changing fashion trends and consumer preferences in a timely manner,
and manage our inventory commensurate with customer demand, our sales levels and profitability may decline;
• fluctuations in the cost, availability and quality of raw materials, labor and transportation, could cause manufacturing delays
and increase our costs;
• equity-based compensation awarded under the employment agreement with our Chief Executive Officer could adversely
impact our cash flows, financial position or results of operations and could have a dilutive effect on our outstanding Common
Stock;
• our growth strategy relies significantly on international expansion, which adds complexity to our operations and may strain
our resources and adversely impact current store performance;
• our international expansion plan is dependent on a number of factors, any of which could delay or prevent successful
penetration into new markets or could adversely affect the profitability of our international operations;
• our direct-to-consumer sales are subject to numerous risks that could adversely impact sales;
• we have incurred, and may continue to incur, significant costs related to store closures;
• our development of a new brand concept such as Gilly Hicks could have a material adverse effect on our financial condition or
results of operations;
• fluctuations in foreign currency exchange rates could adversely impact our financial condition and results of operations;
• our business could suffer if our information technology systems are disrupted or cease to operate effectively;
• comparable store sales will continue to fluctuate on a regular basis and impact the volatility of the price of our Common
Stock;
• our market share may be negatively impacted by increasing competition and pricing pressures from companies with brands or
merchandise competitive with ours;
• our ability to attract customers to our stores depends, in part, on the success of the shopping malls in which most of our stores
are located;
• our net sales fluctuate on a seasonal basis, causing our results of operations to be susceptible to changes in Back-to-School and
Holiday shopping patterns;
• our inability to accurately plan for product demand and allocate merchandise effectively could have a material adverse effect
on our results;
• our failure to protect our reputation could have a material adverse effect on our brands;
• we rely on the experience and skills of our senior executive officers, the loss of whom could have a material adverse effect on
our business;
• interruption in the flow of merchandise from our key vendors and international manufacturers could disrupt our supply chain,
which could result in lost sales and could increase our costs;
7