Item 1A. Risk Factors
Item 1A. Risk Factors
Except as set forth below, as of the date of this filing, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended August 31, 2019.
The recent outbreak of COVID-19 has been declared a pandemic by the World Health Organization, has spread to the United States and many other parts of the world and may have a material adverse effect on our business operations, financial condition, liquidity and cash flow.
As the recent outbreak of COVID-19 continues to grow both in the U.S. and globally, there has been a recent downturn in financial market indices and the adoption of emergency legislation aimed to address the negative impacts of the pandemic. While sales were initially negatively impacted and we have incurred significant expenses, we are unable to accurately predict the ultimate impact that COVID-19 will have on our business and financial condition due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, the likelihood of a resurgence of the outbreak, actions that may be taken by governmental authorities in response to the disease and unintended consequences of the foregoing. In particular, it is unclear what near-term and long-term impact these factors will have on the number of vehicle miles driven, traffic to our stores, as well as demand for our products from our retail and commercial customers. Continued business disruption caused by COVID-19 may require significant actions to mitigate the impact, including but not limited to employee furloughs, reductions in store hours and store closings as well as ongoing increases in expenses. Further, the pandemic and related economic uncertainty may result in additional negative impacts of which we are not currently aware and may also magnify the various risks described in our Annual Report on Form 10-K, including those associated with sourcing quality merchandise domestically and outside the U.S.
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Accordingly, the pandemic could have a material adverse effect on demand for our products, workforce availability, our results of operations, financial condition, liquidity and cash flows.
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