Hibbett Sports 2010 Annual Report Download - page 14

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may also face new competitive, distribution and merchandising challenges different from those we currently face. We
cannot give any assurances that we will be able to continue our expansion plans successfully; that we will be able to
achieve results similar to those achieved with prior locations; or that we will be able to continue to manage our growth
effectively. Our failure to achieve our expansion plans could materially and adversely affect our business, financial
condition and results of operations. Furthermore, our operating margins may be impacted in periods in which
incremental expenses are incurred as a result of new store openings.
Our estimates concerning long-lived assets and store closures may accelerate.
Our long-term success depends, in part, on our ability to operate stores in a manner that achieves appropriate
returns on capital invested. This is particularly challenging in the current economic environment. We will only
continue to operate existing stores if they meet required sales or profit levels. In the current macroeconomic
environment, the results of our existing stores are impacted not only by a reduced sales environment, but by a number
of things that are outside our control, such as the loss of traffic resulting from store closures by significant other
retailers in our stores’ immediate vicinity.
The uncertainty of the economy, coupled with the volatility in the capital markets, affects our business and,
ultimately, our revenue and profitability. To the extent our estimates for net sales, gross profit and store expenses are
not realized, future assessments of recoverability could result in impairment charges. In addition, if we were to close
stores, we could be subject to costs and charges that may adversely affect our financial results.
Our stores are concentrated within the Southeast, Southwest, Mid-Atlantic and lower Midwest regions of the United
States, which could subject us to regional risks.
Because our stores are located primarily in a concentrated area of the United States, we are subject to regional
risks, such as the regional economy, weather conditions and natural disasters such as floods, droughts, tornadoes and
hurricanes, increasing costs of electricity, oil and natural gas, as well as, government regulations specific in the states
and localities within which we operate. We sell a significant amount of team sports merchandise which can be
adversely affected by significant weather events that postpone the start of or shorten sports seasons or that limit
participation of fans and sports enthusiasts.
The occurrence of severe weather events, catastrophic health events or natural disasters could significantly damage
or destroy our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us
from resupplying our stores or distribution center, especially during peak shopping seasons.
Unforeseen events, including public health issues, such as the H1N1 flu pandemic, and natural disasters such
as earthquakes, hurricanes, snow storms, floods and heavy rains, could disrupt our operations or the operations of our
suppliers, as well as the behavior of our consumer. We believe that we take reasonable precautions to prepare
particularly for weather-related events, however, our precautions may not be adequate to deal with such events in the
future. As these events occur in the future, if they should impact areas in which we have our distribution center or a
concentration of retail stores, such events could have a material adverse effect on our business, financial condition and
results of operations, particularly if they occur during peak shopping seasons.
Unauthorized disclosure of sensitive or confidential information could harm our business and reputation with our
consumers.
The protection of Company, customer and employee data is critical to us. We rely on third-party systems,
software and monitoring tools to provide security for processing, transmission and storage of confidential customer and
employee information such as payment card and personal information. Despite the security measures we and our third-
party providers have in place, our data may be vulnerable to security breaches, acts of vandalism, computer viruses,
misplaced or lost data, programming and/or human errors, theft or other similar events. Any security breach involving
the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us or our providers,
could damage our reputation, expose us to risk of litigation and liability and harm our business.
Our inability to identify, and anticipate changes in consumer demands and preferences and our inability to respond
to such consumer demands in a timely manner could reduce our net sales.
Our products appeal to a broad range of consumers whose preferences cannot be predicted with certainty and
are subject to rapid change. Our success depends on our ability to identify product trends as well as to anticipate and
respond to changing merchandise trends and consumer demand in a timely manner. We cannot assure you that we will
be able to continue to offer assortments of products that appeal to our customers or that we will satisfy changing
consumer demands in the future. Accordingly, our business, financial condition and results of operations could be
materially and adversely affected if:
 we are unable to identify and respond to emerging trends, including shifts in the popularity of certain products;
 we miscalculate either the market for the merchandise in our stores or our customers’ purchasing habits; or
 consumer demand unexpectedly shifts away from athletic footwear or our more profitable apparel lines.