Lumber Liquidators 2011 Annual Report Download - page 20

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 net 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
those markets 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; and
• 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.
Finally, our progress in opening new stores from quarter to quarter may occur at an uneven rate, which may result in
quarterly net sales and profit growth falling short of market expectations in some periods.
Our net sales and profit growth could be adversely affected if comparable store net sales are less than we expect.
While future net sales growth will depend substantially on our plans for new store openings, the level of comparable
store net sales (which represent the change in period-over-period net sales for stores beginning their thirteenth full month of
operation) will also affect our sales growth and business results. Among other things, increases in our baseline store volumes
and the number of new stores opened in existing markets, which tend to open at a higher base level of net sales, will impact
our comparable store net sales. As a result, it is possible that we will not achieve our targeted comparable store net sales
growth or that the change in comparable store net sales could be negative. If this were to happen, net sales and profit growth
would be adversely affected.
Increased delivery costs, particularly those relating to the cost of fuel, could harm our results of operations.
The efficient transportation of our products through our supply chain is a critical component of our operations. If the
cost of fuel or other costs, such as import tariffs or duties, rise, it could result in increases in our cost of sales and selling,
general and administrative expenses due to additional delivery charges and in the fees transportation companies charge us to
transport our products to our stores and customers. We may be unable to increase the price of our products to offset increased
delivery charges, which could cause our operating results to deteriorate.
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