Hibbett Sports 2012 Annual Report Download - page 17

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Customer buying patterns around the spring sales period and the holiday season historically result in higher first and fourth
quarter net sales. In the past few years, we have also experienced higher than historical third quarter net sales resulting from the
back-to-school period complimented by sales tax holidays in many of our markets. In addition, our quarterly results of operations
may fluctuate significantly as a result of a variety of factors, many outside our control, including the timing of new store openings,
the amount and timing of net sales contributed by new stores, merchandise mix, demand for apparel and accessories driven by local
interest in sporting events, the demise of sports superstars key to certain product promotions or strikes or lockouts involving
professional sports teams. Any of these events, particularly in the fourth quarter, could have a material adverse effect on our
business, financial condition and operating results for the entire fiscal year.
Comparable store net sales vary from quarter to quarter, and an unanticipated decline in comparable store net sales may
cause the price of our common stock to fluctuate significantly. Factors which have historically affected, and will continue to affect
our comparable store net sales results, include:
 shifts in consumer tastes and fashion trends;
 calendar shifts of holiday or seasonal periods;
 the timing of income tax refunds to customers;
 calendar shifts or cancellations of sales tax-free holidays in certain states;
 the success or failure of college and professional sports teams within our core regions;
 changes in the other tenants in the shopping centers in which we are located;
 pricing, promotions or other actions taken by us or our existing or possible new competitors; and
 unseasonable weather conditions or natural disasters.
We cannot assure you that comparable store net sales will trend at the rates achieved in prior periods or that rates will not
decline.
New stores may also affect our net sales through the timing of new store openings and the relative proportion of new stores
to mature stores, the level of pre-opening expenses associated with new stores and the amount and timing of net sales contributed by
new stores.
We would be materially and adversely affected if our single distribution center were shut down.
We currently operate a single centralized distribution center in Birmingham, Alabama. We receive and ship substantially
all of our merchandise at our distribution center. Any natural disaster or other serious disruption to this facility due to fire, tornado or
any other cause would damage a portion of our inventory and could impair our ability to adequately stock our stores and process
returns of products to vendors and could adversely affect our net sales and profitability. In addition, we could incur significantly
higher costs and longer lead times associated with distributing our products to our stores during the time it takes for us to reopen or
replace the center.
Failure to adequately plan and manage the relocation of our corporate headquarters and distribution center may interrupt our
operations and lower our operating income.
The lease on our corporate headquarters and distribution facility expires in December 2014. Currently, our distribution
center is centrally managed from our corporate headquarters, which is located in the same building as our distribution center. Our
plans are to separate our corporate headquarters and distribution facility and to move each from its current location. The planned
move entails risk that could cause delays and cost overruns, such as: shortages of materials; shortages of skilled labor or work
stoppages; unforeseen construction, scheduling, engineering, environmental or geological problems; weather interferences or other
casualty losses; and unanticipated cost increases. There is also the risk that we will not adequately adjust our business processes or
appropriately manage our work force during the transition. Failure to adequately plan and manage the relocation efforts could cause
a disruption in our operations and lower our operating income.
We depend on key personnel, the loss of which may adversely affect our ability to run our business effectively and our results
of operations.
We have benefited from the leadership and performance of our senior management, especially Michael J. Newsome,
our Executive Chairman and former Chief Executive Officer. If we lose the services of any of our principal executive officers or
Mr. Newsome, we may not be able to run our business effectively and operating results could suffer. In particular, Mr. Newsome
has been instrumental in directing our business strategy and maintaining long-term relationships with our key vendors.