Dollar General 2006 Annual Report Download - page 13

not intend, to publicly update or revise any of these forward-looking statements to reflect
events or circumstances occurring after the date of this document or to reflect the occurrence
of unanticipated events. We advise you, however, to consult any further disclosures we may
make on related subjects in the documents we file with or furnish to the SEC or in our other
public disclosures. Investors should also be aware that while we do, from time to time,
communicate with securities analysts and others, it is against our policy to selectively disclose to
them any material nonpublic information or other confidential commercial information.
Shareholders should not assume that we agree with any statement or report issued by any analyst
regardless of the content of the statement or report. To the extent that reports issued by securities
analysts contain any financial projections, forecasts or opinions, those reports are not our
responsibility.
General economic factors may adversely affect our financial performance. General
economic conditions in one or more of the markets we serve may adversely affect our financial
performance. A general slowdown in the economy, higher interest rates, higher fuel and other
energy costs, inflation, higher levels of unemployment, higher consumer debt levels, higher tax
rates and other changes in tax laws, and other economic factors could adversely affect consumer
demand for the products we sell, change our sales mix of products to one with a lower average
gross profit and result in slower inventory turnover and greater markdowns on inventory. Higher
interest rates, higher commodities rates, higher fuel and other energy costs, transportation costs,
inflation, higher costs of labor, insurance and healthcare, foreign exchange rate fluctuations,
higher tax rates and other changes in tax laws, changes in other laws and regulations and other
economic factors increase our cost of sales and operating, selling, general and administrative
expenses, and otherwise adversely affect the operations and operating results of our stores.
Our plans depend significantly on initiatives designed to improve the efficiencies, costs
and effectiveness of our operations, and failure to achieve or sustain these plans could affect
our performance adversely. We have had, and expect to continue to have, initiatives (such as
those relating to marketing, advertising, merchandising, promotions and real estate) in various
stages of testing, evaluation, and implementation, upon which we expect to rely to improve our
results of operations and financial condition. These initiatives are inherently risky and uncertain,
even when tested successfully, in their application to our business in general. It is possible that
successful testing can result partially from resources and attention that cannot be duplicated in
broader implementation. Testing and general implementation also can be affected by other risk
factors described herein that reduce the results expected. Successful systemwide implementation
relies on consistency of training, stability of workforce, ease of execution, and the absence of
offsetting factors that can influence results adversely. Failure to achieve successful
implementation of our initiatives or the cost of these initiatives exceeding management’ s
estimates could adversely affect our results of operations and financial condition. Please
reference the discussion of the initiatives in the “Executive Overview” portion of Management’ s
Discussion and Analysis below.
Because our business is moderately seasonal, with the highest portion of sales
occurring during the fourth quarter, adverse events during the fourth quarter could materially
affect our financial statements as a whole. We generally recognize a significant portion of our
net sales and net income during the Christmas selling season, which occurs in the fourth quarter
of our fiscal year. In anticipation of this holiday, we purchase substantial amounts of seasonal
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