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H.S. sophomore Avg
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New words:
behavior, commerce, Department, DOC, instructed, landscape, outbound, refund, requested, sentiment, uncertainty, warehouse
Removed:
accrue, assure, category, contest, contesting, domestic, favorability, pending, successful, unfavorability, vigorously
Financial report summary
?Risks
- Our results of operations are highly dependent on the U.S. economy and U.S. consumer discretionary spending and an economic and financial downturn may cause a decline in U.S. consumer discretionary spending and may adversely affect our business, operations, liquidity, capital resources and financial results.
- If we are unable to predict or effectively react to changes in consumer tastes and preferences, or if we fail to acquire and sell brand name merchandise at competitive prices, or if we are not successful in managing our inventory balances, then we may lose customers and our sales may decline and our results of operations may be negatively affected.
- Intense competition in the sporting goods and outdoor recreation retail industries could limit our growth and reduce our profitability.
- We depend on approximately 1,400 suppliers to supply us with the merchandise we purchase for resale and our significant dependence on these suppliers exposes us to risks associated with disruption in supply and losses of merchandise purchasing incentives that could have a material adverse effect on our business and results of operations.
- A failure of our third-party vendors of outsourced business services and solutions to meet our performance standards and expectations could adversely affect our operations.
- We may not be able to continue our store growth plans successfully or continue to manage our growth effectively, and our new stores may not generate sales levels necessary to achieve store-level sales or profitability comparable to that of our existing stores, which could materially and adversely affect our business, financial condition and results of operations.
- Our e-commerce activities expose us to various risks that could have a material adverse impact on our overall results of operations.
- Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market and retail exclusive private label brand merchandise.
- A disruption in the operation of our distribution centers would affect our ability to deliver merchandise to either our stores or customers, which could adversely impact our revenues and harm our business and financial results.
- Our quarterly operating results and comparable sales may fluctuate due to seasonality and other factors outside of our control.
- The occurrence of severe weather events, catastrophic public health events, natural or man-made disasters, social and political conditions or civil unrest could significantly damage or destroy our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us from resupplying or staffing our stores or distribution centers or fulfilling our e-commerce orders, especially during peak shopping seasons.
- Our failure to attract, train and retain quality team members in sufficient numbers, increases in wage and labor costs, and changes in laws and other labor issues could adversely affect our business.
- We depend on key personnel in order to support our existing business and future initiatives and may not be able to retain or replace these team members, recruit additional qualified personnel or effectively manage succession.
- Our stores are located primarily in the southern United States which could subject us to regional risks.
- Fluctuations in merchandise costs and availability due to fuel price uncertainty, demand changes, increases in commodity prices, labor shortages and other factors could negatively impact our consolidated and combined results of operations.
- We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business.
- Our success depends on the effectiveness of our marketing and advertising programs.
- If we are unable to protect against inventory shrink, our results of operations and financial condition could be adversely affected.
- We may pursue strategic acquisitions, which could have an adverse impact on our business, as could assimilation of companies following acquisition.
- We are subject to costs and risks associated with laws and regulations affecting our business, including those relating to the sale, manufacture and import of consumer products and other matters, and the substance or enforcement of such laws may change or become more stringent.
- We are, and may in the future, be subject to claims, demands and lawsuits, and our insurance or indemnities may not be sufficient to cover damages related to those claims and lawsuits.
- Our sales and operating results could be adversely affected by product safety concerns.
- Our failure to protect our intellectual property or avoid the infringement of third-party intellectual property rights could be costly and have a negative impact on our results of operations.
- Our level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments and reduces the funds that would otherwise be available for other general corporate purposes and other business opportunities, which could adversely affect our operating performance, growth, profitability and financial condition, which in turn could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
- Despite our level of indebtedness, we may still be able to incur substantially more debt, which could further increase the risks to our financial condition described above.
- If we are unable to generate sufficient cash to service all of our indebtedness, we may be forced to take other actions to fund the satisfaction of our obligations under our indebtedness, which may not be successful.
- The terms of our outstanding indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
- Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
- If the financial institutions that are lenders under the ABL Facility fail to extend credit under the facility or reduce the borrowing base, our liquidity and results of operations may be adversely affected.
- Our level of indebtedness may hinder our ability to negotiate favorable terms with our landlords, vendors and suppliers, which could negatively impact our operating performance and, thus, could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
- Our stock price may be highly volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.
- We cannot provide any guaranty of future dividend payments or that we will repurchase our common stock pursuant to our share repurchase program, and our indebtedness could limit our ability to pay future dividends on our common stock.
- Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
- Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.
- You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
Management Discussion
- *Percentages in table may not sum properly due to rounding.
- Net Sales. Net sales decreased $34.1 million, or 2.2%, in the 2024 second quarter from the prior year second quarter as a result of decreased comparable sales of 6.9%, partially offset by additional sales generated by new locations. As of the end of the 2024 second quarter, we operated 15 additional stores as compared to the end of the 2023 second quarter, and we had the full benefit of one store opened during the 2023 second quarter. Collectively, these stores accounted for a $41.7 million increase in net sales in the current quarter compared to the 2023 second quarter, not including e-commerce sales fulfilled from these locations.
- The decrease of 6.9% in comparable sales was driven by lower comparable sales across all merchandise divisions as a result of a 7.4% decrease in comparable transactions, partially offset by an increase in average ticket of 0.5%. The decrease of 2.2% in net sales was driven by decreased sales of 7.3% in the sports and recreation merchandise division and 2.2% in the apparel merchandise division, partially offset by increased sales of 1.3% in the footwear merchandise division and 0.8% in the outdoors merchandise division. The decrease in net and comparable sales primarily reflected challenging macroeconomic conditions. Additionally, a temporary reduction in outbound shipments at our Georgia distribution center related to a new warehouse management information system resulted in a decrease of approximately 2% in both net and comparable sales and several regional severe weather events resulted in a decrease of approximately 1% in both net and comparable sales.