Hibbett Sports 2011 Annual Report Download - page 14

10
In addition, our expansion strategy may be subject to rising real estate and construction costs, available credit to landlords
and developers and landlord bankruptcies that could inhibit our ability to sustain our rate of growth. We may also face new
competitive, distribution and merchandising challenges different from those we currently face. We cannot give any assurances that
we will be able to continue our expansion plans successfully; that we will be able to achieve results similar to those achieved with
prior locations; or that we will be able to continue to manage our growth effectively. Our failure to achieve our expansion plans
could materially and adversely affect our business, financial condition and results of operations. Furthermore, our operating margins
may be impacted in periods in which incremental expenses are incurred as a result of new store openings.
Our estimates concerning long-lived assets and store closures may accelerate.
Our long-term success depends, in part, on our ability to operate stores in a manner that achieves appropriate returns on
capital invested. This is particularly challenging with the volatility of the current economic environment and customer behavior. We
will only continue to operate existing stores if they meet required sales or profit levels. In the current macroeconomic environment,
the results of our existing stores are impacted not only by a volatile sales environment, but by a number of things that are outside our
control, such as the loss of traffic resulting from store closures by significant other retailers in our stores’ immediate vicinity.
The uncertainty of the economy, coupled with the volatility in the capital markets, affects our business and, ultimately, our
revenue and profitability. To the extent our estimates for net sales, gross profit and store expenses are not realized, future
assessments of recoverability could result in impairment charges. In addition, if we were to close stores, we could be subject to costs
and charges that may adversely affect our financial results.
Our stores are concentrated within the Southeast, Southwest, Mid-Atlantic and Midwest regions of the United States, which could
subject us to regional risks.
Because our stores are located primarily in a concentrated area of the United States, we are subject to regional risks, such
as the regional economy, weather conditions and natural disasters such as floods, droughts, tornadoes and hurricanes, increasing
costs of electricity, oil and natural gas, as well as, government regulations specific in the states and localities within which we
operate. We sell a significant amount of team sports merchandise which can be adversely affected by significant weather events that
postpone the start of or shorten sports seasons or that limit participation of fans and sports enthusiasts.
Professional team lockouts, as well as the poor performance of college and professional sports teams within our core regions of
operation, could adversely affect our financial results.
We sell a significant amount of team sports merchandise, the sale of which may be subject to fluctuations based on the
success or failure of such teams. Professional team lockouts, as well as poor performance by the college and professional sports
teams within our core regions of operation, could cause our financial results to fluctuate accordingly year over year.
The occurrence of severe weather events, catastrophic health events or natural disasters could significantly damage or destroy
our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us from resupplying our
stores or distribution center, especially during peak shopping seasons.
Unforeseen events, including public health issues and natural disasters such as earthquakes, hurricanes, snow or ice storms,
floods and heavy rains, could disrupt our operations or the operations of our suppliers, as well as the behavior of our consumer. We
believe that we take reasonable precautions to prepare particularly for weather-related events, however, our precautions may not be
adequate to deal with such events in the future. As these events occur in the future, if they should impact areas in which we have our
distribution center or a concentration of retail stores, such events could have a material adverse effect on our business, financial
condition and results of operations, particularly if they occur during peak shopping seasons.
Unauthorized disclosure of sensitive or confidential information could harm our business and reputation with our consumers.
The protection of Company, customer and employee data is critical to us. We rely on third-party systems, software and
monitoring tools to provide security for processing, transmission and storage of confidential customer and employee information
such as payment card and personal information. Despite the security measures we and our third-party providers have in place, our
data may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human
errors, theft or other similar events. Any security breach involving the misappropriation, loss or other unauthorized disclosure of
confidential information, whether by us or our providers, could damage our reputation, expose us to risk of litigation and liability and
harm our business.