Dick's Sporting Goods 2013 Annual Report Download - page 39

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Intense competition in the sporting goods industry could limit our growth and reduce our profitability.
The market for sporting goods retailers is highly fragmented and intensely competitive. Our current and prospective
competitors include many large companies, some of which have greater market presence, name recognition and financial,
marketing and other resources than us. We compete, directly or indirectly, with retailers from multiple categories, including
stores and chains utilizing large format, traditional and specialty formats, mass merchants, department stores and catalog,
Internet-based and direct-sell retailers. We compete principally based on customer service, store location and appearance, and
assortment, quality and availability of merchandise.
Pressure from our competitors could require us to reduce our prices or increase our spending for advertising and promotion.
Increased competition in our current markets or the adoption or proliferation by competitors of innovative store formats,
aggressive pricing strategies and retail sale methods, such as the Internet, could cause us to lose market share and could have a
material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, as the popularity and use of Internet sites continue to increase, our business faces increased competition from
various domestic and international sources, including our suppliers. We may require significant capital in the future to sustain
or grow our business, including our store and eCommerce operations, and there is no assurance that cash flow from operations
will be sufficient to meet those needs or that additional sources of capital will be available on acceptable terms or at all.
If we are unable to predict or effectively react to changes in consumer demand or shopping patterns, we may lose customers
and our sales may decline.
Our success depends in part on our ability to anticipate and respond in a timely manner to changing consumer demand,
preferences and shopping patterns regarding sporting goods. Our products must appeal to a broad range of consumers whose
preferences cannot be predicted with certainty and are subject to continual change and evolution. We often make commitments
to purchase products from our vendors several months in advance of the proposed delivery. If we misjudge the market for our
new merchandise our sales may decline significantly. We may overstock unpopular products and be forced to take significant
inventory markdowns or miss opportunities for other products, both of which could have a negative impact on our profitability.
Conversely, shortages of items that prove popular could also be detrimental to our net sales. A major shift in consumer demand
away from sporting goods generally could also have a material adverse effect on our business, results of operations and
financial condition. Failure to timely identify or effectively respond to changing consumer tastes, preferences and spending
patterns could negatively affect our relationship with our customers, the demand for our products and services and our market
share.
In addition, our customers are increasingly using computers, tablets, mobile phones and other devices to shop in our stores and
online for our products. Omni-channel retailing is rapidly evolving and we must keep pace with consumer preferences and
expectations. There are various risks relating to omni-channel retailing, including the need to keep pace with rapid
technological change, internet security risks, risks of systems failure or inadequacy and increased competition. Further,
governmental regulation of Internet-based commerce continues to evolve in areas such as taxation, privacy, data protection,
copyrights, patents, mobile communications and the provision of online payment services. Unfavorable changes to regulations
in these areas could harm our business.
Lack of available retail store sites on terms acceptable to us, rising real estate prices and other costs and risks relating to
new store openings could severely limit our growth opportunities.
Our strategy includes opening stores in new and existing markets. We must successfully choose store sites, execute real estate
transactions on terms that are acceptable to us, hire competent personnel and effectively open and operate these new stores. Our
plans to increase our number of retail stores will depend in part on the availability of existing retail stores or store sites. A lack
of available financing on terms acceptable to real estate developers may adversely affect the number or quality of retail sites
available to us. We cannot provide assurance that stores or sites will be available to us, or that they will be available on terms
acceptable to us. If additional retail store sites are unavailable on acceptable terms, we may not be able to carry out a significant
part of our growth strategy. Rising real estate costs and acquisition, construction and development costs could also inhibit our
ability to grow. If we fail to locate desirable sites, obtain lease rights to these sites on terms acceptable to us, hire adequate
personnel and open and effectively operate these new stores, our financial performance could be adversely affected.