Dick's Sporting Goods 2011 Annual Report Download - page 37

ITEM 1A. RISK FACTORS
Risks and Uncertainties
Our business is dependent on the general economic conditions in our markets and the ongoing economic and
financial downturn may cause a decline in consumer spending that may adversely affect the Company’s
business, operations, liquidity, financial results and stock price.
Our operating results are affected by the relative condition of the U.S. economy. Our business and
financial performance may be adversely affected by current and future economic conditions that cause
a decline in business and consumer spending, including a reduction in the availability of credit,
increased unemployment levels, higher energy and fuel costs, rising interest rates, financial market
volatility and recession. Additionally, we may experience difficulties in operating and growing our
operations to react to economic pressures in the U.S.
As a business that depends on consumer discretionary spending, the Company may be adversely
affected if our customers reduce their purchases due to continued job losses, foreclosures, bankruptcies,
higher consumer debt and interest rates, reduced access to credit, falling home prices, lower consumer
confidence, uncertainty or changes in tax policies and tax rates and uncertainty due to national or
international security concerns. Decreases in same store sales, customer traffic or average value per
transaction negatively affect the Company’s financial performance, and a prolonged period of depressed
consumer spending could have a material adverse effect on our business. Promotional activities and
decreased demand for consumer products, particularly higher-end products, could affect profitability
and margins. The potential effects of the ongoing economic and financial crisis are difficult to forecast
and mitigate. As a consequence, our sales, operating and financial results for a particular period are
difficult to predict, and, therefore, it is difficult to forecast results to be expected in future periods. Any
of the foregoing could have a material adverse effect on our business, results of operations and
financial condition and could adversely affect our stock price.
The ongoing global crisis may also adversely affect our suppliers’ access to capital and liquidity with
which to maintain their inventory, production levels and product quality and to operate their
businesses, all of which could adversely affect our supply chain. It may cause suppliers to reduce their
offerings of customer incentives and vendor allowances, cooperative marketing expenditures and
product promotions. The ongoing crisis and market instability make it difficult for us and our suppliers
to accurately forecast future product demand trends, which could cause us to carry too much or too
little merchandise in various product categories.
Our quarterly operating results may fluctuate substantially, which may adversely affect our business and the
market price of our common stock.
Our net sales and results of operations have fluctuated in the past and may vary from
quarter-to-quarter in the future. These fluctuations may adversely affect our business, financial
condition and the market price of our common stock. A number of factors, many of which are outside
our control, may cause variations in our quarterly net sales and operating results, including:
general economic conditions;
changes in demand for the products that we offer;
lockouts or strikes involving professional sports teams;
retirement of sports superstars used in marketing various products;
sports scandals;
costs related to the closures of existing stores;
Dick’s Sporting Goods, Inc. 2011 Annual Report 15