Ross 2015 Annual Report Download - page 24

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government regulations, employment and labor matters, concerns relating to human rights, working conditions, and other
issues in factories or countries where merchandise is produced, transparent sourcing and supply chains, exposure for
product warranty and intellectual property issues, consumer perceptions of the safety of imported merchandise, wars and
fears of war, political unrest, natural disasters, regulations to address climate change, and other trade restrictions. We
cannot predict whether any of the countries from which our products are sourced, or in which our products are currently
manufactured or may be manufactured in the future, will be subject to trade restrictions imposed by the U.S. or foreign
governments or the likelihood, type or effect of any such restrictions.
We require our vendors to adhere to various conduct, compliance, and other requirements including those relating to
environmental, employment and labor, health, safety, and anti-bribery standards. From time to time, our vendors, their
contractors, or their subcontractors may not be in compliance with these standards or applicable local laws. Although we
have implemented policies and procedures to facilitate our compliance with laws and regulations relating to doing business
in foreign markets and importing merchandise, there can be no assurance that suppliers and other third parties with whom
we do business will not violate such laws and regulations or our policies. Significant or continuing noncompliance with such
standards and laws by one or more vendors could have a negative impact on our reputation, could subject us to claims and
liability, and could have an adverse effect on our results of operations.
We may experience volatility in revenues and earnings.
Our business has slower and busier periods based on holiday and back-to-school seasons, weather, and other factors.
Although our off-price business is historically subject to less seasonality than traditional retailers, we may still experience
unexpected decreases in sales from time to time, which could result in increased markdowns and reduced margins.
Significant operating expenses, such as rent expense and associate salaries, do not adjust proportionately with our sales. If
sales in a certain period are lower than our plans, we are generally not able to adjust these operating expenses concurrently,
which may impact our operating results.
A natural or man-made disaster in California or in another region where we have a concentration of stores, offices,
or a distribution center could harm our business.
Our corporate headquarters, Los Angeles buying office, three operating distribution centers, two warehouses, and
approximately 24% of our stores are located in California. Natural or other disasters, such as earthquakes and hurricanes,
tornadoes, floods, or other extreme weather and climate conditions, or fires, explosions and acts of war or terrorism, or
public health issues (such as epidemics), in any of our markets could disrupt our operations or our supply chain, or could
shut down, damage, or destroy our stores or distribution facilities.
To support our continuing operations, our new store and distribution center growth plans, and our stock
repurchase program and quarterly dividends, we must maintain sufficient liquidity.
We depend upon our operations to generate strong cash flows to support our general operating activities, and to supply
capital to finance our operations, make capital expenditures and acquisitions, manage our debt levels, and return value to
our stockholders through dividends and stock repurchases. If we are unable to generate sufficient cash flows from
operations to support these activities, our growth plans and our financial performance would be adversely affected. If
necessary to support our operations, we could be forced to suspend our stock repurchase program and/or discontinue
payment of our quarterly cash dividends. Any failure to pay dividends or repurchase stock, after we have announced our
intention to do so, may negatively impact our reputation and investor confidence in us, and may negatively impact our stock
price.
We have borrowed on occasion to finance some of our activities. If our access to capital is restricted or our borrowing costs
increase, our operations and financial condition could be adversely impacted. In addition, if we do not properly allocate our
capital to maximize returns, our operations, cash flows, and returns to stockholders could be adversely affected.