Dick's Sporting Goods 2015 Annual Report Download - page 18

We may be subject to various types of litigation and other claims, and our insurance may not be sufficient to cover damages
related to those claims.
From time to time the Company or its subsidiaries may be involved in lawsuits or other claims arising in the ordinary course of
business, including those related to federal or state wage and hour laws, product liability, consumer protection, advertising,
employment, intellectual property, tort, privacy or data protection and other matters.
We sell hunting rifles, semi-automatic hunting rifles and ammunition, and in some of our stores, including Field & Stream
stores, handguns. These are products that are associated with an increased risk of injury and related lawsuits with respect to our
compliance with Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") or state laws or regulations. Any improper or
illegal use by our customers of ammunition or firearms sold by us could have a negative impact on our reputation and business.
We may incur losses due to lawsuits, including potential class actions, relating to our performance of background checks on
firearms purchases and compliance with other sales laws as mandated by state and federal law. We may also incur losses from
lawsuits relating to the improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other
organizations attempting to recover costs from manufacturers and retailers of firearms and ammunition.
We may incur losses relating to claims filed against us, including costs associated with defending against such claims, and there
is risk that any such claims or liabilities will exceed our insurance coverage, or affect our ability to retain adequate liability
insurance in the future. Even if a claim is unsuccessful or is not fully pursued, the negative publicity surrounding any such
assertions could adversely affect our reputation with our customers. Due to the inherent uncertainties of litigation and other
claims, we cannot accurately predict the ultimate outcome of any such matters.
If our product costs are adversely affected by foreign trade issues, currency exchange rate fluctuations, increasing prices for
raw materials, political instability or other reasons, our sales and profitability may suffer.
A significant portion of the products that we purchase, including those purchased from domestic suppliers, is manufactured
abroad in countries such as China, Taiwan and South Korea. In addition, most of our private brand merchandise is
manufactured abroad. Foreign imports subject us to risk relating to changes in import duties, quotas, loss of "most favored
nation" status with the U.S., shipment delays and shipping port constraints, labor strikes, work stoppages or other disruptions,
freight cost increases and economic uncertainties. In addition, the U.S. government periodically considers other restrictions on
the importation of products obtained by our vendors and us. If any of these or other factors were to cause a disruption of trade
from the countries in which our vendors' supplies or our private brand products' manufacturers are located, our inventory levels
may be reduced or the cost of our products may increase. In addition, to the extent that any foreign manufacturers from whom
we directly or indirectly purchase products utilize labor, environmental, worker safety and other practices that vary from those
commonly accepted in the U.S., we could be hurt by any resulting negative publicity or, in some cases, face potential liability.
Also, the prices charged by foreign manufacturers may be affected by the fluctuation of their local currency against the U.S.
dollar and the price of raw materials, which could cause the cost of our products to increase and negatively impact our sales or
profitability.
Our inability or failure to protect our intellectual property rights, or any claimed infringement by us of third party
intellectual rights, could have a negative impact on our operating results.
Our trademarks, service marks, copyrights, patents, trade secrets, domain names and other intellectual property are valuable
assets that are critical to our success. Effective trademark and other intellectual property protection may not be available in
every country in which our products are manufactured or may be made available. The unauthorized reproduction or other
misappropriation of our intellectual property could diminish the value of our brands or goodwill and cause a decline in our
revenue. In addition, any infringement or other intellectual property claim made against us could be time-consuming to address,
result in costly litigation, cause product delays, require us to enter into royalty or licensing agreements or result in our loss of
ownership or use of the intellectual property.
Problems with our information system software could disrupt our operations and negatively impact our financial results and
materially adversely affect our business operations.
We utilize a number of third party information systems for core system needs of our business. These systems, if not functioning
properly, could disrupt our operations, including our ability to track, record and analyze the merchandise that we sell, process
shipments of goods, process financial information or credit card transactions, deliver products or engage in similar normal
business activities. Any material disruption, malfunction or other similar problems in or with our core information systems
could negatively impact our financial results and materially adversely affect our business operations.
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