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New words:
advisor, bid, Bidco, Copper, cyber, effectuate, indemnification, indemnify, indemnity, indirectly, involuntary, JV, landlord, leaving, liable, lump, master, misconduct, negligence, opco, orally, original, PBGC, propco, recipient, settlement, sponsor, succeed, sum, thereunder, treasury, TSA, viable, Waiver, Wilmington, wind
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accelerate, acceptable, acceptance, accurate, achieve, affecting, annually, attention, attract, August, brand, Build, compelling, competition, conduct, congestion, connected, continuing, costly, Coupled, culture, currency, deep, delisting, deliver, diversion, dollar, effort, energy, failure, favorable, focused, freight, fuel, guide, harm, historical, identify, implement, individual, issuance, jcpenney, larger, lead, limit, making, managing, monetize, motivate, natural, occurrence, operation, past, perception, physical, planning, predicted, profitable, prolonged, publicity, question, rapid, recession, recognize, renewal, respond, restrict, retain, return, reviewed, sensitive, shipping, strategic, stringent, successful, supplier, sustained, tariff, terrorism, testing, theft, traffic, transportation, turn, unauthorized, unemployment, utilize, wage, war, weather, York
Financial report summary
?Risks
- The recent coronavirus outbreak could have an adverse effect on our business.
- Our ability to achieve profitable growth is subject to both the risks affecting our business generally and the inherent difficulties associated with implementing our strategic plan.
- We operate in a highly competitive industry, which could adversely impact our sales and profitability.
- Our sales and operating results depend on our ability to develop merchandise offerings that resonate with our existing customers and help to attract new customers.
- Our results may be negatively impacted if customers do not maintain their favorable perception of our Company and our private brand merchandise.
- Our ability to increase sales and store productivity is largely dependent upon our ability to increase customer traffic and conversion.
- If we are unable to manage our inventory effectively, our merchandise margins could be adversely affected.
- We must protect against security breaches or other unauthorized disclosures of confidential data about our customers as well as about our employees and other third parties.
- The failure to retain, attract and motivate our employees, including employees in key positions, could have an adverse impact on our results of operations.
- If we are unable to successfully develop and maintain a relevant and reliable omnichannel experience for our customers, our sales, results of operations and reputation could be adversely affected.
- Disruptions in our eCommerce platforms, or our inability to successfully execute our eCommerce or omnichannel strategies, could have an adverse impact on our sales and results of operations.
- Our operations are dependent on information technology systems; disruptions in those systems or increased costs relating to their implementation could have an adverse impact on our results of operations.
- We have insourced, and may continue to insource, certain business functions from third party vendors and may seek to relocate certain business functions to international locations in an attempt to achieve additional efficiencies, both of which subject us to risks, including disruptions in our business.
- Changes in our credit ratings may limit our access to capital markets and adversely affect our liquidity.
- Our profitability depends on our ability to source merchandise and deliver it to our customers in a timely and cost-effective manner.
- Our arrangements with our suppliers and vendors may be impacted by our financial results or financial position.
- Our senior secured real estate term loan credit facility and senior secured notes are secured by certain of our real property and, together with our senior secured second priority notes, substantially all of our personal property, and such property may be subject to foreclosure or other remedies in the event of our default. In addition, the real estate term loan credit facility and the indentures governing the senior secured notes and senior secured second priority notes contain provisions that could restrict our operations and our ability to obtain additional financing.
- Our senior secured asset-based revolving credit facility limits our borrowing capacity to the value of certain of our assets. In addition, our senior secured asset-based revolving credit facility is secured by certain of our personal property, and lenders may exercise remedies against the collateral in the event of our default.
- Our level of indebtedness may adversely affect our business and results of operations and may require the use of our available cash resources to meet repayment obligations, which could reduce the cash available for other purposes.
- There is no assurance that our internal and external sources of liquidity will at all times be sufficient for our cash requirements.
- Our use of interest rate hedging transactions could expose us to risks and financial losses that may adversely affect our financial condition, liquidity and results of operations.
- Operating results and cash flows may cause us to incur asset impairment charges.
- Reductions in income and cash flow from our marketing and servicing arrangement related to our private label and co-branded credit cards could adversely affect our operating results and cash flows.
- We are subject to risks associated with importing merchandise from foreign countries.
- Disruptions and congestion at ports through which we import merchandise may increase our costs and/or delay the receipt of goods in our stores, which could adversely impact our profitability, financial position and cash flows.
- If we cannot meet the continued listing requirements of the NYSE, the NYSE may delist our common stock.
- Our Company’s growth and profitability depend on the levels of consumer confidence and spending.
- Our business is seasonal, which impacts our results of operations.
- Our profitability may be impacted by weather conditions.
- Changes in federal, state or local laws and regulations could increase our expenses and adversely affect our results of operations.
- Legal and regulatory proceedings could have an adverse impact on our results of operations.
- Significant changes in discount rates, actual investment return on pension assets, and other factors could affect our earnings, equity, and pension contributions in future periods.
- Our stock price has been and may continue to be volatile.
- The Company’s ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes may be limited.
Management Discussion
- (1)See “Non-GAAP Financial Measures” for a discussion of this non-GAAP measure and reconciliation to its most directly comparable GAAP financial measure and further information on its uses and limitations.
- Total net sales for the third quarter of 2020 declined 29.7% compared to the third quarter of fiscal 2019. Total net sales for the nine months of 2020 declined 43.4% compared to the nine months of fiscal 2019. The decrease in net sales was primarily due to the impacts of the COVID-19 pandemic and the store closures during second quarter 2020.
- We are not presenting, or including a discussion on, comparable store sales for the three and nine months ended October 31, 2020. We believe the conditions and continued impact resulting from the COVID-19 pandemic leading up to and following both the temporary closure and reopening of our stores do not accurately reflect the comparable store sales trends for the period or are indicative of future operating results. As previously noted, following the completion of the sale of the operating assets of the Company, retail operations will end on December 7, 2020.