Lumber Liquidators 2010 Annual Report Download - page 18

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interest rates, tax policy, employment levels, consumer confidence, credit availability, real estate prices, demographic trends,
weather conditions, natural disasters and general economic conditions. For example, discretionary consumer spending could
be limited, spending on remodeling of existing homes could be reduced and purchases of new homes could decline further if:
• the national economy or any regional or local economy where we operate weakens;
• interest rates rise;
• credit becomes less available;
• regions where we operate experience unfavorable demographic trends;
• fuel costs or utility expenses increase; or
• home-price depreciation continues;
Any one or a combination of these factors could result in decreased demand for hardwood flooring, in remodeled and new
homes, which would harm our business and operating results.
Increasing our net sales and profitability depends substantially on our ability to open new stores and is subject to many
unpredictable factors.
As of December 31, 2010, we had 223 stores throughout the United States, 132 of which we opened after January 1,
2007. We plan to open a significant number of new stores during each of the next several years. This growth strategy and the
investment associated with the development of each new store may cause our operating results to fluctuate and be
unpredictable or decrease our profits. Our future results will depend on various factors, including the following:
• the successful selection of new markets and store locations,
• our ability to negotiate leases on acceptable terms,
• management of store opening costs,
• the quality of our operations,
• consumer recognition of the quality of our products,
• our ability to meet customer demand,
• the continued popularity of hardwood flooring, and
• general economic conditions.
In addition, the following may impact the sales and performance of our new stores compared to prior years:
• as we open more stores, our rate of expansion relative to the size of our store base will decline,
• we may not be able to identify suitable store locations in markets into which we seek to expand and may not be
able to open as many stores as planned,
• consumers in new markets may be less familiar with our brands, and we may need to increase brand awareness in
that market through additional investments in advertising,
• stores opened in new markets may have higher construction, occupancy or operating costs, or may have lower
average store net sales, than stores opened in the past,
• we may incur higher maintenance costs associated with our strategy of seeking out low-cost store locations than in
the past,
• newly opened stores may not succeed or may reach profitability more slowly than we expect, and the ramp-up to
profitability may become longer in the future as we enter more mid-sized and smaller markets and add stores to
larger markets where we already have a presence,
• future markets and stores may not be successful and, even if we are successful, our average store net sales and our
comparable store net sales may not increase at historical rates, and
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