24 unchanged sentences
• wages, jobs and unemployment trends;
−Removed: • public health pandemics (including the coronavirus ("COVID-19") pandemic) and their effect on our customers, team members, vendors/suppliers and other stakeholders;
+Added: • public health events (including the COVID-19 pandemic) and their effect on our customers, team members, vendors/suppliers and other stakeholders;
• the housing market, including real estate prices and mortgage rates;
13 unchanged sentences
In addition, COVID-19 has had, and may continue to have, far-reaching adverse impacts on aspects of our operations, directly and indirectly, including our team members, consumer behavior, inventory, distribution and logistics, our suppliers and the market overall.
−Removed: The ongoing pandemic could adversely affect the economies and financial markets of many countries, including the United States, resulting in an economic downturn that could affect demand for our products, materially adversely affect our business operations, our team members, facilities, partners, suppliers, distributors or customers, decrease traffic to our stores, create delays and inefficiencies in our supply chain, and make it difficult or impossible for us to deliver products to our customers.
−Removed: Our comparable sales, net sales per square foot, customer traffic or average value per transaction may be adversely affected if, for example, our customers reduce their purchases with us due to inflation, job losses, foreclosures, bankruptcies, higher consumer debt and interest rates, higher taxes, reduced access to credit, falling home prices and lower consumer confidence.
−Removed: A reduction in overall consumer spending which causes customers to shift their spending to products other than those sold by us or to products sold by us that are less profitable could result in lower net sales, decreases in inventory turnover or a reduction in profitability due to lower margins, which could make it more difficult for us to generate cash flow sufficient to satisfy our
−Removed: obligations under our indebtedness.
+Added: Our comparable sales, net sales per square foot, customer traffic or average value per transaction may be adversely affected if, for example, our customers reduce their purchases with us due to continued high inflation, job losses, foreclosures, bankruptcies, higher consumer debt and interest rates, higher taxes, reduced access to credit, falling home prices and lower consumer confidence.
+Added: A reduction in overall consumer spending which causes customers to shift their spending to products other than those sold by us or to products sold by us that are less profitable could result in lower net sales, decreases in inventory turnover or a reduction in profitability due to lower margins, which could make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness.
A prolonged period of depressed consumer spending could have a material adverse effect on our business.
3 unchanged sentences
For example, although we typically generate funds from our operations to pay our operating expenses and fund our capital expenditures, our ability to continue to meet these cash requirements over the long-term may require access to additional sources of funds, including our ABL Facility, incremental term loan facilities and the equity and debt capital markets.
−Removed: Adverse financial and economic conditions may adversely affect our ability to draw on our ABL Facility, the ability of banks to honor draws on our ABL Facility or our ability to obtain incremental term loan facilities or access the equity and debt capital markets.
+Added: Adverse financial and economic conditions, including as a result of continued increases in interest rates, may adversely affect our ability to draw on our ABL Facility, the ability of banks to honor draws on our ABL Facility or our ability to obtain incremental term loan facilities or access the equity and debt capital markets.
In addition, adverse economic conditions could adversely affect our suppliers’ access to the capital and liquidity required to maintain their inventory, production levels, timeliness and product quality and to operate their businesses, which could adversely affect our supply chain, or could reduce our suppliers’ offerings of trade credit, customer incentives, vendor allowances, cooperative marketing expenditures and product promotions, which could adversely affect our results of operations.
19 unchanged sentences
• escalating costs of sporting and outdoor activities due to adverse changes in economic conditions, including rising fuel prices, rising participation fees and rising sporting license fees;
−Removed: • natural or man-made disasters (e.g., an oil spill closing large areas of hunting or fishing), including hurricanes, tornadoes, large storms and floods, and the effects of such events on the ability of large urban areas to continue spending on sporting goods and outdoor recreation products.
+Added: • severe weather and natural or man-made disasters (e.g., an oil spill closing large areas of hunting or fishing), including heat waves, freezes, hurricanes, tornadoes, large storms and floods, and the effects of such events on the ability of large urban areas to continue spending on sporting goods and outdoor recreation products.
Total consumer spending may not continue to increase at historical rates due to slowed production growth and shifts in population demographics, and it may not increase in certain product categories given changes in consumer interests and participation rates.
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The success of sporting teams is highly uncertain and difficult to predict.
−Removed: In addition, macro factors, such as the ongoing COVID-19 pandemic, may significantly affect whether or not certain sports leagues are able to host their games in their usual seasons, and if they are, whether or not spectators can attend.
+Added: In addition, macro factors, such as severe weather, may significantly affect whether or not certain sports leagues are able to host their games in their usual seasons, and if they are, whether or not spectators can attend.
Our licensed apparel is significantly more popular when spectators are able to attend the games of the sports teams featured on such apparel.
If we are not successful in managing our inventory balances, our results of operations may be negatively affected.
−Removed: The impact of COVID-19 has, and may continue to, impact our business and financial results.
−Removed: The ongoing COVID-19 pandemic and measures taken in response have negatively impacted the global and U.S.
−Removed: economies, disrupted consumer spending and global supply chains, and created significant volatility and disruption of labor and financial markets.
−Removed: In response to the pandemic, various governmental authorities and we have from time to time imposed, and may further impose, numerous requirements and restrictions on the operations of our facilities that are intended to protect the health and safety of our team members, consumers and communities, including temporary full or partial closures of our stores, distribution centers and corporate headquarters, restrictions on our goods and services eligible for sale, restrictions on the ability of customers and team members to reach our stores and other facilities and the neighboring businesses upon which we rely to drive traffic to our stores, and the closures of schools and businesses that our team members may rely upon for childcare while they work.
−Removed: Additionally, vaccine mandates or such other measures that may be announced in jurisdictions in which our business operates could result in disruptions to our current and potential future workforce and may result in increased attrition, as well as increased costs in connection with retaining our workforce.
−Removed: The situation also has necessitated the imposition of significant new safety measures to which we must adhere to safely serve our customers while also providing for the safety of our team members and suppliers, including limitations on the number of customers and team members allowed in our stores at any given time, shorter operating hours, and increased distancing, face covering, cleaning and sanitization protocols.
−Removed: Each of these measures has substantially increased our operating costs, including, but not limited to, costs incurred to implement the operational changes described above and certain payments to or other costs relating to team members who are not working during the pandemic.
−Removed: These limitations, requirements and decreases, which are unprecedented, unexpected, ongoing and indefinite, have adversely impacted our business and results and are expected to continue to do so for the duration of the pandemic.
−Removed: In addition, despite any precautions, consumer or team member fears about becoming ill with the disease may continue, which will adversely affect traffic to our stores or supply of labor.
−Removed: Any significant reduction in consumer willingness to visit stores, levels of consumer spending at our stores or team member willingness to staff our facilities, or the further temporary closure of our facilities, relating to the pandemic or its impact on the economy, consumer sentiment or health concerns, could result in a loss of sales and profits and other material adverse effects.
−Removed: Our information technology systems and cyber-security could also be adversely affected due to any significant increase in remote working of our corporate team members due to any quarantines or future closing of our corporate headquarters and in online orders due to a significant increase in online transactions.
−Removed: The operations of our stores, distribution centers, and corporate headquarters could be further restricted, if we deem it necessary or if recommended or mandated by authorities and these measures could have an adverse impact on our sales and profits.
−Removed: As a result of the ongoing COVID-19 pandemic, we may have fewer resources to operate our business and we could also see deterioration in macroeconomic factors that typically affect us.
−Removed: We may also see further disruptions or delays in shipments and negative impacts to pricing of certain components of our products.
−Removed: The ongoing COVID-19 pandemic has already impacted the suppliers of products we sell, particularly as a result of mandatory shutdowns in locations where our products are manufactured and in some cases due to extreme demand for certain popular or necessary goods or raw materials.
−Removed: A significant amount of our merchandise is produced in China, and the ongoing COVID-19 pandemic in China has resulted in significant governmental measures being implemented in China to control the spread of the virus, including, among others, restrictions on manufacturing and the movement of team members in many regions of the country.
+Added: The COVID-19 pandemic has, and may continue to, impact our business and financial results.
+Added: The COVID-19 pandemic, including measures taken in response have negatively impacted the global and U.S.
+Added: economies, disrupted consumer spending and global supply chains, and created significant volatility and disruption of labor and financial markets, and may continue to do so.
+Added: The initial phase of the COVID-19 pandemic saw the imposition by various governmental authorities, and by us, of significant restrictions on the operations of our facilities intended to protect the health and safety of our team members, customers and communities, including temporary full or partial closures and the imposition of new permanent or temporary safety measures.
+Added: These restrictions, along with other impacts of the COVID-19 pandemic on our team members and customers, adversely impacted our business and results, and any future imposition of restrictions or resurgence of the pandemic could cause further adverse impacts.
+Added: Our information technology systems and cyber-security could also be adversely affected by a significant increase in remote working by our corporate team members and a significant increase in online orders.
+Added: As a result of the COVID-19 pandemic, we may also see further disruptions or delays in shipments and negative impacts to pricing of certain components of our products.
+Added: The COVID-19 pandemic has impacted, and may continue to impact, the suppliers of products we sell, particularly as a result of mandatory shutdowns in locations where our products are manufactured and in some cases due to extreme demand for certain popular or necessary goods or raw materials.
+Added: A significant amount of our merchandise is produced in China, and the ongoing COVID-19 pandemic in China has led to, and may continue to lead to, significant governmental measures being implemented in China to control the spread of the virus, including, among others, restrictions on manufacturing and the movement of team members in many regions of the country.
These measures in China have resulted in, and may result in further, disruptions to our supply chain, including the temporary closure of third-party manufacturer facilities, interruptions in labor and/or product supply, or restrictions on the export or shipment of our products.
As a result, our third-party manufacturers may not have the materials, capacity, or capability to manufacture our products according to our schedule and specifications.
−Removed: If our third-party manufacturers’ operations remain curtailed, we may need to seek alternate manufacturing sources, which may be more expensive.
+Added: If our third-party manufacturers’ operations are again curtailed, we may need to seek alternate manufacturing sources, which may be more expensive.
Alternate sources may not be available or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations.
The duration of the production and supply chain disruption, and related financial impact, cannot be estimated at this time.
−Removed: Should the production and distribution closures continue for an extended period of time, the impact on our supply chain in China and globally could have a material adverse effect on our results of operations and cash flows.
+Added: Should such production and distribution closures continue or be re-imposed, the impact on our supply chain in China and globally could have a material adverse effect on our results of operations and cash flows.
Moreover, during the pandemic we have observed an increase in the popularity of isolated recreation, outdoor and leisure activity products, which has benefited our business and financial results.
1 unchanged sentence
To the extent the popularity of isolated recreation, outdoor and leisure activity products declines, our sales could be adversely impacted.
−Removed: The extent to which the ongoing COVID-19 pandemic impacts our results, financial position and liquidity will depend on future developments, including whether there are additional periods of increases or spikes in the number of COVID-19 cases, further mutations or related strains of the virus (or even the threat or perception that this could occur), within the markets in which we operate and the related impact on consumer confidence and spending, labor supply or product supply, all of which are highly uncertain.
−Removed: Additionally, the direct and indirect effects of the ongoing COVID-19 pandemic may give rise to risks that are currently unknown or have the effect of heightening many of the other risks set forth in these "Item 1A.
−Removed: Risk Factors" in this Annual Report.
+Added: The extent to which the COVID-19 pandemic continues to impact our results, financial position and liquidity will depend on future developments and the related impact on consumer confidence and spending, labor supply or product supply, all of which are highly uncertain.
Intense competition in the sporting goods and outdoor recreation retail industries could limit our growth and reduce our profitability.
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In addition, as the popularity and use of Internet sites and free merchandise shipping continue to increase, our business faces increased competition from various domestic and international sources, including our suppliers.
−Removed: Additionally, the ability of consumers to compare prices on a real-
−Removed: time basis through the use of smartphones and digital technology puts additional pressure on us to maintain competitive prices vis-à-vis our competitors.
+Added: Additionally, the ability of consumers to compare prices on a real-time basis through the use of smartphones and digital technology puts additional pressure on us to maintain competitive prices vis-à-vis our competitors.
We may require significant capital in the future to sustain or grow our business, including our store and e-commerce activities, due to increased competition, and there is no assurance that cash flow from operations will be sufficient to meet those needs or that additional sources of capital will be available on acceptable terms or at all.
−Removed: Any failure to protect the integrity, security and use of sensitive or confidential data that we hold relating to us and our customers, team members and vendors, whether as a result of unauthorized disclosure, data loss or a breach of our information technology systems, could result in lost sales, fines and/or lawsuits, a loss of confidence in us, and harm to our reputation, business, results of operations and financial condition.
−Removed: The secure processing, maintenance, transmission and storage of our customer, team member, vendor and company data is critical to us, and we devote significant resources to protecting this data.
−Removed: We collect and store sensitive and confidential data, including our intellectual property and proprietary business information and that of our vendors, and personally identifiable information of our customers and team members, in our data centers and on our networks.
−Removed: Additionally, the success of our retail stores and online operations depends upon the secure transmission of confidential information, including the use of cashless payments.
−Removed: Our customers provide personal, payment card and gift card information to purchase products or services, enroll in promotional programs, apply for credit, register and make purchases on our website, or otherwise communicate and interact with us.
−Removed: We may share information about such persons with vendors that assist with performing certain aspects of our business.
−Removed: We and our vendors rely on commercially available information technology security measures, including systems, software, tools, plans and monitoring to provide security for processing, maintenance, transmission and storage of our customer, team member, vendor and company data.
−Removed: Despite the security measures we and our vendors have in place, our facilities and information technology systems, and those of our third-party service providers, may be vulnerable to, and unable to detect and appropriately respond to, security breaches, cyber-security attacks by computer hackers (including ransomware attacks), acts of vandalism, computer viruses, misplaced or lost data, programming or human errors or other similar disruptions.
−Removed: Any security breach could compromise our networks and the data and confidential personal or business information stored there could be accessed, publicly disclosed, misappropriated, destroyed, lost or stolen.
−Removed: In addition, data and security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breach by our team members or by persons with whom we have commercial relationships that result in the unauthorized release of confidential personal or business information.
−Removed: Any such breach, access, misappropriation, loss or other unauthorized or inadvertent disclosure of confidential information, whether by us or our vendors, could attract a substantial amount of media attention, damage our relationships with our customers, team members and vendors and cause a loss of confidence in us, violate applicable privacy laws and obligations and expose us to costly government enforcement actions or private litigation and financial liability (possibly beyond the scope or limits of our insurance coverage), increase the costs we incur to protect against or remediate such breaches and comply with consumer protection and data privacy laws and obligations or disrupt our operations and distract our management and other key personnel from performing their primary operational duties, any of which could adversely affect our reputation, business, results of operations and financial condition.
−Removed: Despite our security measures, it is possible that computer hackers or other parties might defeat these security measures and obtain sensitive or confidential data that we hold relating to us and our customers, team members and vendors.
−Removed: The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems, change frequently and often are not recognized until launched against a target, and we may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks.
−Removed: Actual or anticipated attacks could require that we expend significant resources related to our information systems and infrastructure and could subject us to additional legal and financial risks, including increased investments in protection technologies, costs to deploy additional personnel, train team members and engage third-party experts and consultants, costs of compliance with privacy laws and obligations, expenses associated with providing our customers with credit protection and potential fees and penalties from our credit card processing partners, any of which could adversely affect our reputation, business, results of operations and financial condition.
+Added: Any failure to protect the integrity, confidentiality, and availability of our digital environment (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data that we hold relating to us and our customers, team members, and partners (including vendors) could result in lost sales, fines, penalties, assessments, investigations, inquiries, and/or lawsuits, a loss of confidence in us, and harm to our reputation, business, results of operations, and financial condition.
+Added: The security of our digital environment (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data (including from our partners) is critical to our business as a retailer, and we devote significant resources to protecting our digital environment and data.
+Added: In order to operate our business and to provide products and services to our customers, we collect, source, store, maintain, and process data that can be used to identify a person (i.e., personal data or personally identifiable information), including customers, partners, and team members, along with our intellectual property and proprietary business information.
+Added: We share data with third parties for further processing consistent with applicable terms and conditions.
+Added: Our retail stores and online operations depend on the secure transmission and processing of confidential information and the continued operation of systems necessary to perform store operations and to process transactions.
+Added: Our customers provide payment card and gift card information, alternative payment information, and other personal information to purchase products or services, enroll in promotional programs, apply for credit, create accounts and make purchases on our website, or otherwise communicate and interact with us.
+Added: Job applicants provide personal information in connection with their employment application and our team members provide personal information in connection with their continued employment.
+Added: We may share information about individual persons with partners assisting with certain aspects of our business.
+Added: Some personal data and personally identifiable information may be deemed sensitive or otherwise protected under applicable laws or regulations and may be subject to specific requirements for collection, processing, security, and disposal.
+Added: We and our partners rely on commercially available information security technology and industry standard operational practices for collecting, storing, maintaining, transmitting, protecting, and processing data.
+Added: Despite our security measures, we may not be able to anticipate, prevent, and stop future attacks to our digital environment and data and those of our partners.
+Added: Threat actors may defeat our security measures and may obtain access to data (including personal data or personally identifiable information) that we hold relating to us and our customers, team members, and vendors, or may cause operational harm.
+Added: For example, ransomware events could cause key systems to be unavailable for use, or credential stuffing attacks of customer accounts on academy.com could cause customer privacy breaches and authorized charges to payment or gift cards, or phishing/smishing attacks, in which attackers masquerade as a trustworthy entity in an electronic communication (including email or text message), could gain control of a user's device and/or credentials.
+Added: The techniques used by threat actors to attack or access systems and data evolve and may not be recognized until or after being launched against a target.
+Added: We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks.
+Added: While we have no knowledge of any material data security breaches to date, actual or suspected attacks, increased risks, and newly discovered vulnerabilities have resulted, and in the future could result, in us expending significant resources related to our information systems, data stores, technology infrastructure and team member training.
+Added: A future data security breach could also (1) attract substantial media attention, (2) damage our relationships with our customers, team members, and partners, (3) cause a loss of confidence in us or cause us to violate applicable privacy laws and obligations, (4) expose us to costly government enforcement actions or private litigation and financial liability (possibly beyond our insurance coverage), (5) increase the costs we incur to protect against or remediate security breaches and vulnerabilities, (6) result in additional costs and operational activities to comply with consumer protection and data privacy laws and obligations, and/or (7) disrupt our operations and distract our management and other key personnel from performing their primary operational duties, any of which could adversely affect our reputation, business, results of operations, and financial condition.
+Added: We maintain cyber liability insurance in an amount and coverage we deem appropriate, taking into account the specific coverages and coverage requirements in the marketplace.
+Added: There is no guarantee that our cyber liability insurance will cover a particular cyber incident, that such coverage will be sufficient, or that insurance proceeds will be paid in a timely manner.
+Added: If an insurance carrier seeks to deny coverage of a particular loss, we may incur costs to dispute the denial of coverage, which could result in paying costs that otherwise would be recovered from insurance and delays in or ultimate denial of coverage.
+Added: The data privacy and cyber security regulatory environment is constantly changing, with new and increasingly rigorous or complex requirements.
+Added: Consumer data privacy and cyber security laws and related regulations have been enacted and additional laws and regulations are under consideration by various state and federal legislatures and regulatory authorities.
+Added: Maintaining compliance with those requirements may require significant effort, cost, and new or improved technical capabilities, may require changes to our business practices, and may limit our ability to obtain or use data to provide a personalized customer experience or to engage in certain marketing practices.
+Added: In addition, failure to comply with applicable requirements could subject us to fines, sanctions, governmental investigations, lawsuits, reputational damage, and other risks and costs that may be difficult to anticipate but could become material depending on the specific facts.
A significant portion of the merchandise that we sell is manufactured in foreign countries, including China, which exposes us to various international risks that could have a material adverse effect on our business and results of operations.
−Removed: A significant portion of the merchandise that we sell, including merchandise we purchase from domestic suppliers and much of our owned brand merchandise, is manufactured in countries such as China, Vietnam, El Salvador and Bangladesh.
+Added: A significant portion of the merchandise that we sell, including merchandise we purchase from domestic suppliers and much of our private label brand merchandise, is manufactured in countries such as China, Vietnam, El Salvador and Bangladesh.
Foreign imports subject us to the risks of changes in import duties, quotas, loss of “most favored nation” status with the United States for a particular foreign country, delays in shipment, shipping port and ocean carrier constraints, supply and demand constraints, labor strikes, work stoppages or other disruptions, freight cost increases and economic uncertainties (including the United States imposing anti-dumping or countervailing duty orders, tariffs, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices).
−Removed: To the extent that any foreign manufacturers from whom we purchase products directly or indirectly employ labor, environmental, corruption, workplace safety, or other business practices that vary
−Removed: from those commonly accepted in the United States, we could be hurt by any resulting negative publicity or, in some cases, potential claims of liability.
+Added: To the extent that any foreign manufacturers from whom we purchase products directly or indirectly employ labor, environmental, corruption, workplace safety, or other business practices that vary from those commonly accepted in the United States, we could be hurt by any resulting negative publicity or, in some cases, potential claims of liability.
+Added: For example, in late 2021, the United States Government enacted the Uyghur Forced Labor Prevention Act (“UFLPA”), which presumes goods produced in the Xinjiang Uyghur Autonomous Region of China, or with labor linked to specified Chinese government-sponsored labor programs, were produced using forced labor and prohibits importation of such goods into the United States absent clear and convincing evidence proving otherwise.
+Added: Compliance with UFLPA could have a material adverse effect on our business, financial condition and results of operations.
Merchandise or raw materials purchased from alternative sources may be of lesser quality or more expensive than the merchandise or raw materials we currently purchase abroad.
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In addition, the federal government periodically considers other restrictions on the importation of products obtained by our vendors and us.
−Removed: If the United States were to withdraw from or materially modify any international trade agreements to which it is a party, or if tariffs were raised on the foreign-sourced goods that we sell, or if border taxes were implemented, then the goods we import may no longer be available at a commercially attractive price or at all, which in turn could have a material adverse effect on our business, financial condition and results of operations.
+Added: If the United States were to withdraw from or materially modify any international trade agreements to which it is a party, or if tariffs were raised on the foreign-sourced goods that we sell, or if border taxes were implemented, then the goods we import may become more expensive or may no longer be available at a commercially attractive price or at all, each of which in turn could have a material adverse effect on our business, financial condition and results of operations.
A significant amount of our merchandise is produced in China, and increases in the costs of labor and other costs of doing business in China could significantly increase our costs to produce our merchandise and could have a negative impact on our net sales, operating income and net income.
1 unchanged sentence
General trade tensions between the United States and China began escalating in 2018, with the Trump administration ultimately imposing multiple rounds of tariffs on imports from China, where we and many of our vendors source commodities.
−Removed: As a result, we have experienced rising inventory costs on owned brand products we directly source from China, as well as national brand products from China that we source through our vendors.
+Added: As a result, we have experienced rising inventory costs on private label brand products we directly source from China, as well as national brand products from China that we source through our vendors.
These higher inventory costs have resulted in higher prices and/or lower margins, thus resulting in a negative impact to sales and/or gross margin.
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For examples, we rely on our information technology systems to effectively manage our merchandise planning and replenishment, warehousing and distribution, store operations, e-commerce, and customer transactions, optimize our overall inventory levels, process financial information and sales transactions, prevent data breaches and credit card fraud, communications, support services, and comply with legal and regulatory obligations.
−Removed: Our information technology systems, if not functioning properly, could disrupt our ability to track, record, and analyze sales and inventory and could cause disruptions of operations, including, among other things, our ability to order, process and ship inventory, process financial information including credit card transactions, prevent data breaches and credit card fraud, process payrolls or vendor payments or engage in other similar normal business activities.
−Removed: Our information systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, worms, other malicious computer programs, denial-of-service attacks, security breaches (through cyber-attacks from cyber-attackers or sophisticated organizations), catastrophic events such as fires, floods, tornadoes, earthquakes and hurricanes, and usage errors by our associates.
+Added: Our information technology systems, if not functioning properly or if failing to function altogether, could disrupt our ability to track, record, and analyze sales and inventory and could cause disruptions of operations, including, among other things, our ability to order, process and ship inventory, process financial information including credit card transactions, prevent data breaches and credit card fraud, process payrolls or vendor payments or engage in other similar normal business activities.
+Added: Our information technology systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, worms, other malicious computer programs, denial-of-service attacks, security breaches (through cyber-attacks from cyber-attackers or sophisticated organizations), catastrophic events such as fires, floods, tornadoes, earthquakes and hurricanes, and usage errors by our associates.
+Added: From time to time we have experienced, and we may in the future further experience, interruptions, damages, or failures of our information technology systems, some of which disrupt our business and cause us to expend additional resources to rectify.
Although we attempt to mitigate the risk of possible business interruptions by employing customary strategies, any material disruption, malfunction or any other similar problem in or with our information technology systems could negatively impact our business operations and materially and adversely affect our financial results.
−Removed: From time to time, our computer and information technology systems may require upgrade, enhancement, integration and/or replacement for us to maintain successful current operations and achieve future sales and store growth.
+Added: From time to time, our computer and information technology systems may require repair, upgrade, enhancement, integration and/or replacement for us to maintain successful current operations and achieve future sales and store growth.
Updating our existing information technology systems subjects us to numerous risks, including:
9 unchanged sentences
• updated information technology system ultimately does not meet the needs of the business.
−Removed: Any failure to successfully update our information technology systems, and any missteps, delays, cost overruns, vendor disputes, technical challenges or other similar issues that may arise during the updating of our information technology systems, could have a material impact on our business, financial condition, results of operations, internal controls over financial reporting and ability to manage our business effectively.
−Removed: From time to time, we may undertake initiatives involving numerous information technology systems, including our merchandise management, warehouse management, point of sale, e-commerce, data security, credit card fraud detection, financial reporting, and labor management systems.
+Added: Any failure to successfully update and maintain our information technology systems, and any missteps, delays, cost overruns, vendor disputes, technical challenges or other similar issues that may arise during the updating of our information technology systems, could have a material impact on our business, financial condition, results of operations, internal controls over financial reporting and ability to manage our business effectively.
+Added: From time to time, we may undertake initiatives involving numerous information technology systems, including our merchandise management, warehouse management, customer relationship management, point of sale, e-commerce, data security, credit card fraud detection, financial reporting, and labor management systems.
While each of these information technology systems initiatives is intended to further improve and enhance our information technology systems, our failure to timely, properly or adequately implement these systems initiatives could result in increased costs or risks, the diversion of our management’s and team members’ attention and resources and could materially adversely affect our results of operations, our internal controls over financial reporting or general computer controls, our ability to manage our business effectively and possible disruption of our business operations or financial reporting.
6 unchanged sentences
As a result, these suppliers could modify the terms of these relationships due to general economic conditions or otherwise.
−Removed: If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out of the control of these suppliers, including as a result of public health emergencies, such as the ongoing COVID-19 pandemic, and measures taken by the Chinese government or other governments in response to such events), we may experience merchandise out-of-stocks, delivery delays or increased delivery costs, or otherwise be unable to obtain the same merchandise from other suppliers in a timely and efficient manner and on acceptable terms, or at all, which could materially affect our results of operations and our customers’ confidence in us.
+Added: If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out of the control of these suppliers, including as a result of public health emergencies, such as the COVID-19 pandemic, and measures taken by the Chinese government or other governments in response to such events), we may experience merchandise out-of-stocks, delivery delays or increased delivery costs, or otherwise be unable to obtain the same merchandise from other suppliers in a timely and efficient manner and on acceptable terms, or at all, which could materially affect our results of operations and our customers’ confidence in us.
For example, during fiscal 2022 we observed increased competition across the industry for resources throughout the supply chain, which resulted in disruptions to the flow of products from our vendors, labor shortages, reduced shipping container availability, and longer delays at the port.
2 unchanged sentences
The formation and/or strengthening of business partnerships between our suppliers and our competitors could directly alter the available supply of merchandise we desire to sell, which could have a material adverse effect on the level of customers purchasing merchandise from us and, thus, our results of operations.
−Removed: Moreover, many of our suppliers provide us
−Removed: with merchandise purchasing incentives, such as return privileges, volume purchasing allowances and cooperative advertising, and a decline or discontinuation of these incentives could severely impact our results of operations.
+Added: Moreover, many of our suppliers provide us with merchandise purchasing incentives, such as return privileges, volume purchasing allowances and cooperative advertising, and a decline or discontinuation of these incentives could severely impact our results of operations.
Harm to our reputation could adversely impact our ability to attract and retain customers, team members, vendors and/or other partners.
1 unchanged sentence
Failure to detect, prevent or mitigate issues that might give rise to reputational risk or failure to adequately address negative publicity or perceptions could adversely impact our reputation, business, results of operations, and financial condition.
−Removed: Issues that might pose a reputational risk include failure of our cybersecurity measures to protect against data breaches, product liability and product recalls, our social media activity, failure to comply with applicable laws and regulations or enforce our own policies, our policies related to the sale of firearms, ammunition and accessories, our policies relating to the COVID-19 pandemic, public stances on controversial social or political issues, and any of the other risks enumerated in these risk factors.
+Added: Issues that might pose a reputational risk include failure of our cybersecurity measures to protect against data breaches, product liability and product recalls, our social media activity, failure to comply with applicable laws and regulations or enforce our own policies, our policies related to the sale of firearms, ammunition and accessories, our policies relating to public health, public stances on controversial social or political issues, and any of the other risks enumerated in these risk factors.
As part of our marketing efforts, we rely on social media platforms and other digital marketing to attract and retain customers.
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We must successfully choose our store sites, execute favorable real estate transactions on terms that are acceptable to us, construct and equip the stores with furnishings and appropriate merchandise, hire and train competent personnel and effectively open and operate these new stores and integrate the stores into our operations, and we may need to expand our distribution infrastructure, including the addition of new distribution centers.
−Removed: Our plans to increase our number of retail stores will depend in part on the availability of existing retail stores or store sites.
−Removed: A lack of available financing on terms acceptable to real estate developers or a tightening credit market may adversely affect the retail sites available to us.
+Added: Our plans to increase our number of retail stores will depend in part on the availability of existing (vacant) retail stores or developable store sites.
+Added: The availability of second-generation retail store space, and developable retail sites (i.e., land and redevelopment sites) that meet our criteria is very low.
+Added: Land prices continue to increase as developers pursue more favorable non-retail options capable of yielding higher returns.
+Added: Further, a lack of available financing on terms acceptable to real estate developers or a tightening credit market may adversely affect the retail sites available to us.
We cannot expect that stores or sites will be available to us, or that they will be available on terms acceptable to us.
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If we fail to locate desirable sites, obtain lease rights to these sites on terms acceptable to us, hire adequate personnel and open and effectively operate these new stores, our financial performance could be adversely affected.
−Removed: We lease our stores under operating leases with terms of 15 to 20 years, and we generally cannot cancel these leases at our option.
+Added: We lease our stores under operating leases with initial terms of 15 to 20 years, and we generally cannot cancel these leases at our option.
If a store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term.
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Expansion into new markets could also bring us into direct competition with retailers with whom we have no past experience as direct competitors.
−Removed: To the extent that we become increasingly reliant on entry into new markets to grow, we may face additional risks and our results of operations could suffer.
+Added: As a result of our anticipated growth, we may become increasingly reliant on entry into new markets to grow, we may face additional risks and our results of operations could suffer.
To the extent that we are not able to meet new challenges, our sales could decrease and our operating costs could increase.
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Our continued growth also depends in large part, upon our ability to open new stores in a timely manner and to operate them profitably.
−Removed: In 2020 and 2021, in response to the then-current retail environment, we temporarily stopped new store openings, before announcing a planned resumption in 2022.
+Added: In 2020 and 2021, in response to the then-current retail environment, we temporarily stopped new store openings, before resuming in 2022.
A slower than expected pace of new store openings may negatively impact our net sales growth and operating income.
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Unfavorable changes to regulations in these areas could have a material adverse impact on our e-commerce activities.
−Removed: Our owned brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market and retail exclusive owned brand merchandise.
−Removed: In addition to national brand merchandise, we offer customers owned brand merchandise that is primarily sold exclusively by Academy.
−Removed: The sale of owned brand merchandise subjects us to certain risks, including:
+Added: 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.
+Added: In addition to national brand merchandise, we offer customers private label brand merchandise that is primarily sold exclusively by Academy.
+Added: The sale of private label brand merchandise subjects us to certain risks, including:
• our ability to successfully and profitably conduct sourcing and manufacturing activities internally or with third-party agents, manufacturers and distributors;
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• potential mandatory or voluntary product recalls;
−Removed: • claims and lawsuits resulting from injuries associated with the use of our owned brand merchandise;
+Added: • claims and lawsuits resulting from injuries associated with the use of our private label brand merchandise;
• our ability to successfully protect our intellectual property or other proprietary rights (e.g., defending against counterfeit, knock-offs, grey-market, infringing or otherwise unauthorized goods);
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• sourcing and manufacturing outside the United States, including foreign laws and regulations, political unrest, disruptions or delays in cross-border shipments, changes in economic conditions in foreign countries, exchange rate and import duty fluctuations and conducting activities with third-party manufacturers;
−Removed: • increases in the price of raw materials used in the manufacturing of our owned brand merchandise and other risks generally encountered by entities that source, manufacture, market and retail owned brand merchandise.
+Added: • increases in the price of raw materials used in the manufacturing of our private label brand merchandise and other risks generally encountered by entities that source, manufacture, market and retail private label brand merchandise.
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.
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As a result of damage to, or prolonged interruption of, operations or inventory at any of these facilities, or with respect to third-party transportation providers, due to a work stoppage, labor shortage, operations significantly below historical efficiency levels, supply chain disruption, inclement weather or natural or man-made disasters (including events that may be caused or exacerbated by climate change), system failures, slowdowns or strikes, acts of terror or other unforeseen events in the areas or regions of these facilities could impair our ability to adequately stock our stores, process returns of products to vendors and ship product to our e-commerce customers, thereby adversely affecting our sales and profitability.
−Removed: In addition, we could incur significantly higher costs and longer lead times associated with
−Removed: distributing our products to our stores and customers during the time it takes for us to reopen or replace these distribution centers.
+Added: In addition, we could incur significantly higher costs and longer lead times associated with distributing our products to our stores and customers during the time it takes for us to reopen or replace these distribution centers.
Although we maintain business interruption and property insurance for these facilities, there can be no assurance that our insurance coverage will be sufficient, or that insurance proceeds will be timely paid to us, if our distribution centers are shut down or interrupted for any unplanned reason.
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The occurrence of severe weather events, catastrophic 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 out e-commerce orders, especially during peak shopping seasons.
−Removed: Unforeseen events, including public health emergencies, such as pandemics, natural disasters, such as earthquakes, hurricanes, tornadoes, snow or ice storms, floods and heavy rains, and man-made disasters, such as an oil spill closing large areas of hunting or fishing, could disrupt our operations or the operations of our suppliers, as well as the behavior of our consumers.
+Added: Unforeseen events, including public health emergencies, such as pandemics, natural disasters, such as earthquakes, hurricanes, tornadoes, freezes, snow or ice storms, floods and heavy rains, heatwaves, and man-made disasters, such as an oil spill closing large areas of hunting or fishing, could disrupt our operations or the operations of our suppliers, as well as the behavior of our consumers.
For example, frequent or unusually heavy snowfall, ice storms, rainstorms or other extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our stores and thereby reduce our sales and profitability.
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Socio-political factors, such as foreign wars, civil unrest or other economic or political uncertainties that contribute to consumer unease or harm to our supply chain or store base, may also result in decreased discretionary spending, property damage and/or business interruption losses.
−Removed: For example, we may face losses related to the civil unrest in the United States, such as the civil unrest that occurred in late May 2020 in response to reported incidents of police violence.
+Added: For example, we may face losses related to the civil unrest in the United States, such as the that which occurred in late May 2020 in response to reported incidents of police violence.
To the extent these events result in the closure of one or more of our distribution centers, a significant number of stores, or our corporate headquarters or impact one or more of our key suppliers, our operations and financial performance could be materially adversely affected through an inability to support our business, resupply or staff our stores, distribution centers or corporate headquarters or fulfill our e-commerce orders, especially during peak shopping seasons, and through lost sales and any precautions that we may take may not be adequate to mitigate the impact of such events.
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We are also dependent on the team members who staff our distribution centers, many of whom are skilled.
−Removed: We may be unable to meet our labor needs and control our costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, competition, unemployment levels, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and public health emergencies, such as the ongoing COVID-19 pandemic.
−Removed: We have experienced, and expect to continue to experience, a shortage of labor for certain functions, including concerns around the ongoing COVID-19 and other factors, which has increased our labor costs and negatively impacted our profitability.
−Removed: The extent and duration of the effect of these labor market challenges are subject to numerous factors, including the continuing effect of the ongoing COVID-19 pandemic, vaccine mandates that may be announced in jurisdictions in which our businesses operate, availability of qualified persons in the markets where we and our contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including increased minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor market.
+Added: We may be unable to meet our labor needs and control our costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, competition, unemployment levels, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and public health emergencies, such as the COVID-19 pandemic.
+Added: We have experienced, and expect to continue to experience, a shortage of labor for certain functions, which has increased our labor costs and negatively impacted our profitability.
+Added: The extent and duration of the effect of these labor market challenges are subject to numerous factors, including the continuing effect of the COVID-19 pandemic, availability of qualified persons in the markets where we and our contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including increased minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor market.
Recent or potential future legislative initiatives may seek to increase the federal minimum wage in the United States, as well as the minimum wage in a number of individual states or markets.
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Additionally, the U.S.
−Removed: Department of Labor has proposed rules that may have salary and wage impact for “exempt” team members, which could result in a substantial increase in store payroll expense.
+Added: Department of Labor has indicated that it intends to propose rules that may have salary and wage impact for “exempt” team members, which could result in a substantial increase in store payroll expense.
Any increase in the cost of our labor could have an adverse effect on our operating costs, financial condition and results of operations.
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If some or our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Additionally, on November 5, 2021, the U.S.
−Removed: Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an Emergency Temporary Standard on Vaccination and Testing (the “ETS”) regarding workplace safety relating to COVID-19, generally requiring employers with more than 100 employees, like Academy, to mandate either regular testing and face covering-wearing or COVID-19 vaccinations for unvaccinated employees beginning on January 4, 2022.
−Removed: Shortly thereafter, enforcement of the ETS was stayed by the federal courts, and on January 13, 2022, the Supreme Court of the United States upheld the stay pending the final disposition of litigation.
−Removed: Effective January 26, 2022, OSHA withdrew the ETS, but retained it as a proposal for a permanent rule.
−Removed: If a rule substantially similar to the ETS is ultimately enforced, we may experience adverse impacts on our workforce, across all functional areas, at our stores and distribution centers in particular, and the workforce of our vendors to the extent that any of these workers are unavailable to work because they either fail the weekly testing requirement or fail to vaccinate in compliance with the rule, which could require us to adapt our operations.
−Removed: We may also experience increased expenses relating to any support pay we must make in compliance with such a rule to employees who need time to get vaccinated and recover from vaccination during work hours.
−Removed: The requirements of such a rule and the potential adverse impact on our workforce, and that of our vendors, could have a material adverse effect on our financial position, results of operations or cash flows.
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.
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Any failure to comply could harm our brand, reputation, business and results of operations.
−Removed: We may pursue strategic acquisitions, which could have an adverse impact on our business, as could assimilation of companies following acquisition.
−Removed: Although we have never done so in the past, we may from time to time acquire companies or businesses in the future.
−Removed: Acquisitions may result in difficulties in assimilating acquired companies, and may result in the diversion of our capital and our management’s attention from other business issues and opportunities.
−Removed: We may not be able to successfully integrate companies or businesses that we acquire, including their personnel, financial systems, distribution, operations and general store opening procedures.
−Removed: If we fail to successfully integrate acquisitions, our business could suffer.
−Removed: In addition, the integration of any acquired business and their financial results may adversely affect our results of operations.
Our success depends on the effectiveness of our marketing and advertising programs.
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If we are unable to continue to develop successful marketing and advertising strategies, especially for online and social media platforms, or if our competitors develop more effective strategies, we could lose customers and sales could decline.
+Added: We may pursue strategic acquisitions, which could have an adverse impact on our business, as could assimilation of companies following acquisition.
+Added: Although we have never done so in the past, we may from time to time acquire companies or businesses in the future.
+Added: Acquisitions may result in difficulties in assimilating acquired companies, and may result in the diversion of our capital and our management’s attention from other business issues and opportunities.
+Added: We may not be able to successfully integrate companies or businesses that we acquire, including their personnel, financial systems, distribution, operations and general store opening procedures.
+Added: If we fail to successfully integrate acquisitions, our business could suffer.
+Added: In addition, the integration of any acquired business and their financial results may adversely affect our results of operations.
Legal and Regulatory Risks
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• securities and exchange laws and regulations.
−Removed: We sell firearms, ammunition, and related accessories.
+Added: We are a federally licensed firearms dealer and we sell firearms, ammunition, and related accessories.
Firearms represented approximately 6% of our net sales in 2022.
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In the future, there may be increased federal, state or local regulation or enforcement affecting the sale of firearms, ammunition, and related accessories, including taxation or restrictions on the type of firearms and ammunition available for retail sale, which could reduce our sales and profitability.
−Removed: A failure by us to follow these laws or regulations may subject us to claims, lawsuits,
−Removed: fines, penalties, adverse publicity and government action (up to and including the possible revocation of licenses and permits allowing the sale of firearms and ammunition), which could have a material adverse effect on our business and results of operations.
+Added: A failure by us to follow these laws or regulations may subject us to claims, lawsuits, fines, penalties, adverse publicity and government action (up to and including the possible revocation of licenses and permits allowing the sale of firearms and ammunition), which could have a material adverse effect on our business and results of operations.
Another significant risk relating to our operations is compliance with the FCPA, the UKBA, and other anti-corruption laws applicable to our international operations.
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If we or one of our domestic or foreign agents or vendors fails to comply with a law or regulation, including any of the foregoing laws or regulations, or if we or one of our domestic or foreign agents or vendors fails to comply with our required policies, procedures or standards of conduct, then we may be forced to discontinue conducting business with the agent or vendor and we or they may be subject to claims, lawsuits, fines, penalties, loss of a license or permit and adverse publicity or other consequences that could have a material adverse effect on our business, results of operations and financial condition.
+Added: We are subject to risks associated with climate change and other sustainability-related matters, or legal, regulatory or market expectations and responses.
+Added: Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere, including increases in global temperatures, changes in weather patterns and increasingly frequent and/or prolonged extreme weather and climate related events, could present risks to our operations.
+Added: For additional information, see also our risk factor related to the impact of severe weather under “Risks Related to Our Business and Industry” above.
+Added: Climate change could exacerbate challenges relating to the availability and quality of water and raw materials, including those used in the production of the private label and other merchandise that we sell, and may result in changes in regulations or consumer preferences that could have a material adverse effect on our business, results of operations and financial condition.
+Added: There has been an increased focus by governmental and non-governmental organizations, customers, team members and other stakeholders on products that are sustainably made and other sustainability matters, including responsible sourcing, the use of plastic, conservation, energy and water, the recyclability of packaging and materials transparency, all of which may require us to incur increased costs for additional transparency, due diligence, and reporting.
+Added: Additionally, recent proposed regulatory changes related to climate change and reporting, could increase the complexity of, and compliance costs associated with, such regulations that could have a material adverse effect on our business, results of operations and financial condition.
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.
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• product liability claims from customers or actions required or penalties assessed by government agencies relating to products we sell, including but not limited to products that are recalled, defective or otherwise alleged to be harmful;
−Removed: • the design, purchase, manufacture, import, distribution and sale of our owned brand products;
+Added: • the design, purchase, manufacture, import, distribution and sale of our private label brand products;
• the procurement, transportation, storage, distribution and sale of firearms and ammunition, including improper performance of federally mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork);
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Unanticipated changes in any applicable actuarial assumptions and management estimates underlying our recorded liabilities for these losses, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers, and changes in discount rates could result in materially different expenses than expected under these programs, which could have a material adverse effect on our results of operations and financial condition.
−Removed: We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s insurance or indemnity agreement, (2) our vendors will carry or maintain such insurance coverage or meet their indemnity obligations or (3) we will be able to collect payments from our vendors sufficient to offset liability losses or, in the case of our owned brand products, where almost all of the manufacturing occurs outside the United States, that we will be able to collect anything at all.
+Added: We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s insurance or indemnity agreement, (2) our vendors will carry or maintain such insurance coverage or meet their indemnity obligations or (3) we will be able to collect payments from our vendors sufficient to offset liability losses or, in the case of our private label brand products, where almost all of the manufacturing occurs outside the United States, that we will be able to collect anything at all.
With all claims and lawsuits, however, there is a risk that liabilities, fines and losses may not be covered by insurance or indemnity or may exceed insurance or indemnity coverage.
+Added: Our sales and operating results could be adversely affected by product safety concerns.
+Added: If the products that we offer, including from both national brands and our private label brands, do not meet applicable safety standards or our customers’ expectations regarding safety, we could experience decreased sales, increased costs, and/or be exposed to legal and might give rise to reputational risk.
+Added: All of our vendors must comply with applicable product safety laws, and it is our expectation that our vendors will stand behind their products to ensure that the products we buy comply with all federal, state, and local requirements for sale, including product safety, labeling, and testing requirements.
+Added: Negative customer perceptions and publicity regarding the safety and sourcing of the products we sell, and events that give rise to actual, potential, or perceived product safety concerns could expose us to government enforcement action and/or private litigation.
+Added: Furthermore, reputational damage caused by real or perceived product safety concerns could have a negative impact on our sales and operating results.
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.
−Removed: We believe that our trademarks, service marks, copyrights, patents, processes, trade secrets, domain names and other intellectual property, including our Academy Sports + Outdoors brand, our owned brands, such as Academy Sports + Outdoors, Magellan Outdoors, BCG, Freely and Outdoor Gourmet, and our goodwill, designs, names, slogans, images and trade dress associated with these brands, are valuable assets, essential to our success and our competitive position due to their name recognition with customers.
+Added: We believe that our trademarks, service marks, copyrights, patents, processes, trade secrets, domain names and other intellectual property, including our Academy Sports + Outdoors brand, our private label brands, such as Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet and Freely, and our goodwill, designs, names, slogans, images and trade dress associated with these brands, are valuable assets, essential to our success and our competitive position due to their name recognition with customers.
The unauthorized use or other misappropriation of our intellectual property could diminish the value of our brands or goodwill and cause a decline in our sales.
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As a result, any such claim made by or against us or our failure to protect our intellectual property could have an adverse effect on our results of operations.
−Removed: We are subject to costs and risks associated with the requirements of being a public company, and our management is required to devote substantial time to compliance, adding complexity to running our business.
−Removed: As a public company, we incur significant legal, regulatory, finance, accounting, investor relations, insurance, and other expenses that we did not incur as a private company, including costs associated with public company governance and reporting requirements and costs of recruiting and retaining non-executive directors.
−Removed: We also incur costs associated with the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and related rules implemented by the SEC, and costs in connection with continued listing on Nasdaq, ESG and investor relations.
−Removed: The obligations, expenses, and risks incurred by public companies generally for reporting and ESG purposes have been increasing.
−Removed: Our efforts to comply with public company rules, regulations, and expectations increase our legal and financial compliance costs and to make some activities more time-consuming and/or costly.
−Removed: Our management devotes a substantial amount of time to ensure that we comply with all of these requirements and expectations, diverting the attention of management away from revenue-producing activities.
−Removed: These rules, regulations, and expectations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
−Removed: These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers.
−Removed: Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
−Removed: Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price, and any failure to maintain financial controls could result in our financial statements becoming unreliable.
−Removed: As a public company, we have significant requirements for enhanced financial reporting and internal controls.
−Removed: We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company.
−Removed: The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.
−Removed: The measures we take may not be sufficient to satisfy our obligations as a public company and if we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations.
−Removed: In addition, we are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, or Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting each annual report on Form 10-K.
−Removed: This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
−Removed: The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
−Removed: Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
−Removed: Our independent registered public accounting firm is also required to issue an attestation report on the effectiveness of our internal controls in each annual report on Form 10-K.
−Removed: In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404.
−Removed: In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their attestation report.
−Removed: Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses.
−Removed: Any material weaknesses could result in a material misstatement of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected.
−Removed: We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not issue an unqualified opinion.
−Removed: If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.
Risks Related to Our Indebtedness
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As of January 28, 2023, we had approximately $194.8 million outstanding under the Term Loan and $400.0 million outstanding under the Notes, all of which is secured.
−Removed: As of January 29, 2022, we had no borrowings outstanding under the ABL Facility (as defined in Note 4 of the accompanying consolidated financial statements), an available borrowing capacity under the ABL Facility of approximately $874.8 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $21.4 million, $17.8 million of which were issued under the ABL Facility.
+Added: As of January 28, 2023, we had no borrowings outstanding under the ABL Facility (as defined in Note 4 of the accompanying financial statements), an available borrowing capacity under the ABL Facility of approximately $947.8 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $13.9 million, all of which were issued under the ABL Facility.
Our overall level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments.
−Removed: The Term Loan (as defined in Note 4 of the accompanying consolidated financial statements) requires quarterly principal and cash interest payments through September 30, 2027.
−Removed: The ABL Facility matures on November 6, 2025, subject to a springing maturity clause which is triggered 91 days before the November 6, 2027 maturity of the Term Loan should it not be paid off or extended at least 91 days beyond the November 6, 2025 maturity date of the ABL Facility.
−Removed: The Notes (as defined in Note 4 of the accompanying consolidated financial statements) require semi-annual payments of interest (in arrears) and matures on November 15, 2027.
+Added: The Term Loan (as defined in Note 4 of the accompanying financial statements) requires quarterly principal payments through September 30, 2027, and monthly cash interest payments through maturity.
+Added: The ABL Facility, under which we had no borrowings as of January 28, 2023, matures on November 6, 2025.
+Added: The Notes (as defined in Note 4 of the accompanying financial statements) require semi-annual payments of interest (in arrears) and matures on November 15, 2027.
Our indebtedness reduces the funds that would otherwise be available for operations, future business opportunities and payments of our debt obligations and limits our ability to:
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Although the credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
−Removed: These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness, and additionally we have further borrowing capacity
−Removed: under the ABL Facility.
+Added: These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness, and additionally we have further borrowing capacity under the ABL Facility.
As of January 28, 2023, we had no borrowings outstanding under the ABL Facility, and an available borrowing capacity under the ABL Facility of approximately $947.8 million (which is subject to customary borrowing conditions, including a borrowing base).
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Such a default, if not cured or waived, may allow the creditors to accelerate the related debt principal and/or related interest payments and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
−Removed: If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able
−Removed: to obtain, sufficient funds to repay such indebtedness in full.
+Added: If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
In addition, an event of default under the credit agreement governing our ABL Facility would permit the lenders under our ABL Facility to terminate all commitments to extend further credit under that facility.
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These reforms may cause such benchmarks to perform differently than in the past, or to disappear entirely, or have other consequences that cannot be predicted.
−Removed: Any such consequence could have a material adverse effect on our existing facilities, our interest rate swap agreement or our future debt linked to such a “benchmark” and our ability to service debt that bears interest at floating rates of interest.
+Added: Any such consequence could have a material adverse effect on our existing facilities or our future debt linked to such a “benchmark” and our ability to service debt that bears interest at floating rates of interest.
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.
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Risks Related to the Ownership of Our Common Stock
−Removed: You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
−Removed: We have approximately 213 million shares of common stock authorized but unissued.
−Removed: Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock, options and other equity awards relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.
−Removed: We have reserved shares for issuance under our New Academy Holding Company, LLC 2011 Unit Incentive Plan, or 2011 Equity Plan, our 2020 Omnibus Incentive Plan, or 2020 Equity Plan, and our new 2020 Employee Stock Purchase Plan, or ESPP.
−Removed: See “Executive Compensation—Equity Compensation Plans.” Any common stock that we issue, including under our 2011 Equity Plan, 2020 Equity Plan, ESPP or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase common stock in this offering.
−Removed: In the future, we may also issue our securities in connection with investments or acquisitions.
−Removed: The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock.
−Removed: Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.
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.
28 unchanged sentences
If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock.
−Removed: Our ability to raise capital in the future may be limited.
−Removed: Our business and operations may consume resources faster than we anticipate.
−Removed: In the future, we may need to raise additional funds through the issuance of new equity securities, debt or a combination of both.
−Removed: Additional financing may not be available on favorable terms or at all.
−Removed: If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements.
−Removed: If we issue new debt securities, the debt holders would have rights senior to holders of our common stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock.
−Removed: If we issue additional equity securities or securities convertible into equity securities, existing stockholders will experience dilution and the new equity securities could have rights senior to those of our common stock.
−Removed: Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
−Removed: Thus, you bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.
−Removed: We cannot assure you that we will pay dividends on our common stock, and our indebtedness could limit our ability to pay future dividends on our common stock.
−Removed: We have announced our intention to pay cash dividends on our common stock, subject to our compliance with applicable law.
−Removed: In addition, any determination to pay dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our board of directors deems relevant.
+Added: 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.
+Added: We declared and paid our first quarterly cash dividend for the fourth quarter for fiscal 2021 and have paid a quarterly cash dividend consistently thereafter.
+Added: Any determination to pay future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our board of directors deems relevant.
Therefore, there can be no assurance that we will pay any dividends to holders of our common stock or as to the amount of any such dividends.
1 unchanged sentence
We have not adopted, and do not currently expect to adopt, a separate written dividend policy.
−Removed: Additionally, our operations are conducted through our wholly owned subsidiaries and our ability to generate cash to meet our debt service obligations or to make future dividend payments, if any, is highly dependent on the earnings of, and the receipt of funds from, our subsidiaries via dividends or intercompany loans.
+Added: Furthermore, although our board of directors has authorized a share repurchase program, the timing, manner, price and amount of any common stock repurchases will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions.
+Added: We are not obligated to make any purchases under the program, and we may discontinue it at any time.
+Added: Additionally, our operations are conducted through our wholly owned subsidiaries and our ability to generate cash to meet our debt service obligations or to make future dividend payments or conduct share repurchases, if any, is highly dependent on the earnings of, and the receipt of funds from, our subsidiaries via dividends or intercompany loans.
In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.
28 unchanged sentences
Alternatively, if a court were to find the choice of forum provision contained in our amended restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial conditions.
+Added: You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
+Added: We have approximately 223 million shares of common stock authorized but unissued.
+Added: Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock, options and other equity awards relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.
+Added: We have reserved shares for issuance under our New Academy Holding Company, LLC 2011 Unit Incentive Plan (the "2011 Equity Plan"), our 2020 Omnibus Incentive Plan (the "2020 Equity Plan"), and our 2020 Employee Stock Purchase Plan (the "ESPP").
+Added: Any common stock that we issue, including under our 2011 Equity Plan, 2020 Equity Plan, ESPP or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase common stock in this offering.
+Added: In the future, we may also issue our securities in connection with investments or acquisitions.
+Added: The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock.
+Added: Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.
Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.