Dick's Sporting Goods 2015 Annual Report Download - page 19

We may be unable to attract, train, engage and retain qualified leaders and associates. Furthermore, the loss of Edward W.
Stack as our key executive, could have a material adverse effect on our business.
If we do not effectively implement our strategic and business planning processes to attract, retain, train and develop future
leaders, our business may suffer. In addition, stores depend significantly on our ability to hire and retain quality associates,
including store managers and sales associates. The market for non-entry level personnel, particularly for associates with retail
expertise, is highly competitive. We also are dependent on the associates who staff our distribution centers, many of whom are
skilled.
Furthermore, our success depends on continued service from Edward W. Stack, our Chairman and Chief Executive Officer,
who has been operating the Company since 1984. Mr. Stack possesses detailed and in-depth knowledge of the issues,
opportunities and challenges facing the Company and the industry. If we were to lose Mr. Stack, our business could be
materially adversely affected.
Wage increases could adversely affect our financial results.
Recently, various legislative movements have sought to increase the federal minimum wage in the United States, as well as the
minimum wage in a number of individual states. €As federal or state minimum wage rates increase, we may need to increase not
only the wage rates of our minimum wage employees, but also the wages paid to our other hourly employees as well. €Further,
should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could
decline, causing our customer service to suffer.€ Additionally, the U.S. Department of Labor ("DOL") has proposed rules that
may have salary and wage impact for "exempt" employees, which could result in a substantial increase in store payroll expense.
Any increase in the cost of our labor could have an adverse effect on our operating costs, financial condition and results of
operations.
We rely on four distribution centers, and if there is a natural disaster or other serious disruption at one or more of these
facilities, we may lose merchandise and be unable to effectively deliver it to our stores.
We currently operate a 914,000 square foot distribution center near Atlanta, Georgia, a 725,000 square foot distribution center
in Plainfield, Indiana, a 601,000 square foot distribution center in Smithton, Pennsylvania and a 624,000 square foot
distribution center in Goodyear, Arizona. Any natural disaster or other serious disruption to one of these facilities due to fire,
tornado or any other cause could damage a material portion of our inventory, impair our ability to adequately stock our stores
and process returns of products to vendors, and could negatively affect our sales and profitability.
Poor performance of professional sports teams within our core regions of operation, as well as professional team lockouts
or strikes, retirement of sports superstars or scandals involving sports superstars could adversely affect our financial results.
We sell a significant amount of professional sports team merchandise, the sale of which may be subject to fluctuations based on
the success or failure of such teams. The poor performance by the professional sports teams within our core regions of
operations, as well as professional team lockouts and strikes, could cause our financial results to fluctuate accordingly year
over year. In addition, to the extent we use sports superstars to market our products and advertise our stores, or we sell
merchandise branded by one or more sports superstars, the retirement of such individuals or scandals in which they may be
implicated could negatively impact our financial results.
The relative seasonality of our operations, along with the current geographic concentrations of our Dick's stores, exposes us
to certain risks.
Our business is seasonal based on sports seasons and the holiday selling season. Furthermore, a majority of our Dick's Sporting
Goods stores are located in the eastern half of the United States, which exposes us to various regional risks, including those
relating to weather conditions. Many of our stores are located in geographic areas that experience seasonably cold weather, and
we sell a significant amount of cold weather sporting goods and apparel. Our highest sales and operating income results
historically occur during our fourth fiscal quarter, which is due, in part, to the holiday selling season and, in part, to our strong
sales of cold weather sporting goods and apparel. Poor performance during our fourth quarter, whether because of a slow
holiday selling season, unseasonable weather conditions, economic conditions or otherwise, could have a material adverse
effect on our business, financial condition and operating results for the entire fiscal year. Additionally, abnormally wet or cold
weather in the spring or summer months could reduce our sales of golf, team sports or other merchandise and cause a decrease
in our profitability.
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