Our Annual Report on Form 10-K for fiscal 2014, and information we provide in our Annual Report to Stockholders, press releases, and other investor communications, including those on our corporate website, may contain forward-looking statements with respect to anticipated future events and our projected growth, financial performance, operations, and competitive position that are subject to risks and uncertainties that could cause our actual results to differ materially from those forward-looking statements and our prior expectations and projections. Refer to Management’s Discussion and Analysis for a more complete identification and discussion of “Forward-Looking Statements.”
Our financial condition, results of operations, cash flows, and the performance of our common stock may be adversely affected by a number of risk factors. Risks and uncertainties that apply to both Ross and dd's DISCOUNTS include, without limitation, the following:
We are subject to the economic and industry risks that affect large retailers operating in the United States.
Our business is exposed to the risks of a large, multi-store retailer, which must continually and efficiently obtain and distribute a supply of fresh merchandise throughout a large and growing network of stores and distribution centers. These risk factors include:
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| • | An increase in the level of competitive pressures in the apparel or home-related merchandise retailing industry. |
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| • | Changes in the level of consumer spending on or preferences for apparel or home-related merchandise. |
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| • | The impacts from the macro-economic environment and financial and credit markets that affect consumer disposable income and consumer confidence, including but not limited to interest rates, recession, inflation, deflation, energy costs, tax rates and policy, unemployment trends, and fluctuating commodity costs. |
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| • | Changes in geopolitical and geoeconomic conditions. |
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| • | Unseasonable weather trends that could affect consumer demand for seasonal apparel and apparel-related products. |
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| • | Changes in the availability, quantity, or quality of attractive brand name merchandise at desirable discounts that could impact our ability to purchase product and continue to offer customers a wide assortment of merchandise at competitive prices. |
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| • | Potential disruptions in the supply chain or in information systems that could impact our ability to deliver product to our stores in a timely and cost-effective manner. |
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| • | A change in the availability, quality, or cost of new store real estate locations. |
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| • | A downturn in the economy or a natural disaster in California or in another region where we have a concentration of stores or a distribution center. Our corporate headquarters, Los Angeles buying office, two operating distribution centers, two warehouses, and 25% of our stores are located in California. |
We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.
The continued success of our business depends in part upon our ability to increase sales at our existing store locations, to open new stores, and to operate stores on a profitable basis. Our existing strategies and store and distribution center expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including our ability to:
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| • | Attract, train, and retain associates with the retail talent necessary to execute our strategies. |
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| • | Effectively operate and continually upgrade our various supply chain, store, core merchandising, and other information systems. |
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| • | Improve our merchandising and transaction processing capabilities, and the reliability and security of our data communication systems, through implementation of new processes and systems enhancements. |
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| • | Protect against security breaches, including cyber-attacks on our transaction processing and computer information systems, that could result in the theft, transfer or unauthorized disclosure of customer, credit card, employee or other private and valuable information that we collect and process in the ordinary course of our business, and avoid resulting damage to our reputation, loss of customer confidence, exposure to litigation and regulatory action, unanticipated costs and disruption of our operations. |
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| • | Improve new store sales and profitability, especially in newer regions and markets. |
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| • | Add capacity to our existing distribution centers, find new distribution center sites, and build out planned additional distribution centers timely and cost effectively. |
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| • | Achieve and maintain targeted levels of productivity and efficiency in our existing and new distribution centers. |
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| • | Lease or acquire acceptable new store sites with favorable demographics and long-term financial returns. |
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| • | Identify and successfully enter new geographic markets. |
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| • | Achieve planned gross margins by effectively managing inventories, markdowns, and inventory shortage. |
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| • | Effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for store and distribution center employees. |
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