Abercrombie & Fitch 2015 Annual Report Download - page 8

Table of Contents
8
ITEM 1A. RISK FACTORS
FORWARD-LOOKING STATEMENTS AND RISK FACTORS.
We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of
1995) contained in this Annual Report on Form 10-K or made by us, our management or our spokespeople involve risks and
uncertainties and are subject to change based on various factors, many of which may be beyond our control. Words such as
“estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend” and similar expressions may identify forward-looking
statements. Except as may be required by applicable law, we assume no obligation to publicly update or revise our forward-looking
statements.
The following factors could affect our financial performance and could cause actual results to differ materially from those
expressed or implied in any of the forward-looking statements:
• changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer
spending, as well as other changes in consumer discretionary spending habits, could have a material adverse effect on
our business, results of operations and liquidity;
• our inability to anticipate customer demand and changing fashion trends and to manage our inventory commensurately
could adversely impact our sales levels and profitability;
• a significant component of our growth strategy is international expansion, which requires significant capital investment,
the success of which is dependent on a number of factors that could affect the profitability of our international operations;
• direct-to-consumer sales channels are a significant component of our growth strategy, and the failure to successfully
develop our position in these channels could have an adverse impact on our results of operations;
• our market share may be negatively impacted by increasing competition and pricing pressures from companies with
brands or merchandise competitive with ours;
• we have currently suspended our search for a new Chief Executive Officer and the continuance of our interim governance
structure may create uncertainty;
• our inability to successfully implement our strategic plans could have a negative impact on our growth and profitability;
• our failure to protect our reputation could have a material adverse effect on our brands;
• our business could suffer if our information technology systems are disrupted or cease to operate effectively;
• we may be exposed to risks and costs associated with cyber-attacks, credit card fraud and identity theft that would cause
us to incur unexpected expenses and reputation loss;
• fluctuations in foreign currency exchange rates could adversely impact our financial condition and results of operations;
• fluctuations in the cost, availability and quality of raw materials, labor and transportation, could cause manufacturing
delays and increase our costs;
• we depend upon independent third parties for the manufacture and delivery of all our merchandise, and a disruption of
the manufacture or delivery of our merchandise could result in lost sales and could increase our costs;
• our ability to attract customers to our stores depends, in part, on the success of the shopping malls or area attractions that
our stores are located in or around;
• 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;
• our reliance on two distribution centers domestically and third-party distribution centers internationally makes us
susceptible to disruptions or adverse conditions affecting our distribution centers;
• our litigation exposure could have a material adverse effect on our financial condition and results of operations;
• our inability or failure to adequately protect our trademarks could have a negative impact on our brand image and limit
our ability to penetrate new markets;
• fluctuations in our tax obligations and effective tax rate may result in volatility in our operating results;
• extreme weather conditions and the seasonal nature of our business may cause net sales to fluctuate and negatively impact
our results of operations;
• our facilities, systems and stores, as well as the facilities and systems of our vendors and manufacturers, are vulnerable
to natural disasters, pandemic disease and other unexpected events, any of which could result in an interruption to our
business and adversely affect our operating results;
• the impact of war or acts of terrorism could have a material adverse effect on our operating results and financial condition;
• changes in the regulatory or compliance landscape could adversely affect our business and results of operations;
• our Asset-Based Revolving Credit Agreement and our Term Loan Agreement include restrictive covenants that limit our
flexibility in operating our business; and,
• compliance with changing regulations and standards for accounting, corporate governance and public disclosure could
adversely affect our business, results of operations and reported financial results.