TJ Maxx 2009 Annual Report Download - page 27

quarter are below expectations for that quarter, we may not proportionately reduce operating expenses for that quarter,
and therefore such a sales shortfall would have a disproportionate effect on our net income for the quarter. We maintain a
forecasting process that seeks to project sales and align expenses. If we do not correctly forecast sales or appropriately
adjust to actual results, our financial performance could be adversely affected.
Our future performance is dependent upon our ability to continue to expand within our existing markets and to extend our off-
price model in new product lines, chains and geographic regions.
Our strategy is to continue to expand within existing markets and to expand to new markets and geographies. This
growth strategy includes developing new ways to sell more or different merchandise within our existing stores, continued
expansion of our existing chains in our existing markets and countries, expansion of these chains to new markets and
countries, and development and opening of new chains, all of which entail significant risk. Our growth is dependent
upon our ability to successfully extend our off-price retail apparel and home fashions concepts in these ways.
Unsuccessful extension of our model could adversely affect future growth or financial performance.
Failure to implement our marketing, advertising and promotional programs successfully, or if our competitors are more effective
with their programs than we are, may adversely affect our revenue.
We use marketing, advertising and promotional programs to attract customers to our stores. We use various media
for these programs, including print, television, database marketing and direct marketing. Some of our competitors may
have substantially larger expenditures for their programs, which may provide them with a competitive advantage. There
canbenoassurancethatwewillbeabletocontinuetoexecuteourmarketing,advertisingandpromotionalprograms
effectively, and any failure to do so could have a material adverse effect on our revenue and results of operations.
Compromises of our data security could materially harm our reputation and business.
In the ordinary course of our business, we collect and store certain personal information from individuals, such as
our customers and associates, and we process customer payment card and check information. We suffered an
unauthorized intrusion or intrusions (such intrusion or intrusions, collectively, the “Computer Intrusion”) into portions
of our computer system that process and store information related to customer transactions, discovered late in fiscal 2007
inwhichwebelievecustomerdatawerestolen.Wehavetakensteps designed to further strengthen the security of our
computer system and protocols and have instituted an ongoing program with respect to data security, consistent with a
consent order with the Federal Trade Commission. Nevertheless, there can be no assurance that we will not suffer a
future data compromise. We rely on commercially available systems, software, tools and monitoring to provide security
for processing, transmission and storage of confidential information. Further, the systems currently used for transmission
and approval of payment card transactions, and the technology utilized in payment cards themselves, all of which can put
payment card data at risk, are determined and controlled by the payment card industry, not by us. This is also true for
check information and approval. Computer hackers may attempt to penetrate our computer system and, if successful,
misappropriate personal information, payment card or check information or confidential Company business infor-
mation. In addition, a Company associate, contractor or other third party with whom we do business may attempt to
circumvent our security measures in order to obtain such information may or inadvertently cause a breach involving such
information. Advances in computer and software capabilities and encryption technology, new tools and other
developments may increase the risk of such a breach. Any such compromise of our data security and loss of personal
or business information could disrupt our operations, damage our reputation and customers’ willingness to shop in our
stores, violate applicable laws, regulations, orders and agreements, and subject us to additional costs and liabilities which
could be material.
Our business is subject to seasonal influences; a decrease in sales or margins during the second half of the year could disproportion-
ately adversely affect our operating results.
Our business is subject to seasonal influences; we generally realize higher levels of sales and income in the second half
of the year, which includes the back-to-school and year-end holiday seasons. Any decrease in sales or margins during this
period could have a disproportionately adverse effect on our results of operations.
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