Hibbett Sports 2012 Annual Report Download - page 15

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Poor performance of college and professional sports teams within our core regions of operation, as well as professional team
lockouts, 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. The poor performance by the college and professional sports teams within our core regions of
operations, as well as professional team lockouts, 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, tornados, 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.
Our inability to identify, and anticipate changes in consumer demands and preferences and our inability to respond to such
consumer demands in a timely manner could reduce our net sales.
Our products appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to
rapid change. Our success depends on our ability to identify product trends as well as to anticipate and respond to changing
merchandise trends and consumer demand in a timely manner. We cannot assure you that we will be able to continue to offer
assortments of products that appeal to our customers or that we will satisfy changing consumer demands in the future. Accordingly,
our business, financial condition and results of operations could be materially and adversely affected if:
 we are unable to identify and respond to emerging trends, including shifts in the popularity of certain products;
 we miscalculate either the market for the merchandise in our stores or our customers’ purchasing habits; or
 consumer demand unexpectedly shifts away from athletic footwear or our more profitable apparel lines.
In addition, we may be faced with significant excess inventory of some products and missed opportunities for other
products, which could decrease our profitability.
If we lose any of our key vendors or any of our key vendors fail to supply us with merchandise, we may not be able to meet the
demand of our customers and our net sales could decline.
We are a reseller of manufacturers’ branded items and are thereby dependent on the availability of key products and
brands. Our business is dependent to a significant degree upon close relationships with vendors and our ability to purchase brand
name merchandise at competitive prices. As a reseller, we cannot control the supply, design, function or cost of many of the
products we offer for sale. In addition, many of our vendors provide us with incentives, such as return privileges, volume purchasing
allowances and cooperative advertising. The loss of key vendor support or decline or discontinuation of vendor incentives could
have a material adverse effect on our business, financial condition and results of operations. We cannot guarantee that we will be
able to acquire such merchandise at competitive prices or on competitive terms in the future. In this regard, certain merchandise that
is in high demand may be allocated by vendors based upon the vendors’ internal criterion, which is beyond our control.
A disruption in the flow of imported merchandise or an increase in the cost of those goods may significantly decrease our net
sales and operating income.
We believe many of our largest vendors source a substantial majority of their products from foreign countries.
Imported goods are generally less expensive than domestic goods and indirectly contribute significantly to our favorable profit
margins. We may experience a disruption or increase in the cost of imported vendor products at any time for reasons beyond our
control. If imported merchandise becomes more expensive or unavailable, the transition to alternative sources by our vendors
may not occur in time to meet our demands or the demands of our customers. Products from alternative sources may also be
more expensive than those our vendors currently import. Risks associated with reliance on imported goods include:
 disruptions in the flow of imported goods because of factors such as:
 raw material shortages, work stoppages, strikes and political unrest;
 problems with oceanic shipping, including blockages at U.S. or foreign ports; and
 economic crises and international disputes.