Risk Factors.
−Removed: This section supplements and updates certain of the information found under Part I, Item 1A.
−Removed: “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the Securities and Exchange Commission on March 20, 2020, and under Part II, Item 1A.
−Removed: “Risk Factors” of our Quarterly Report on Form 10-Q for the period ended August 1, 2020 filed with the Securities and Exchange Commission on August 27, 2020, and is based on the information currently known to us and recent developments since the dates of those filings.
−Removed: The matters discussed below should be read in conjunction with the risk factors included in those filings and the discussion in Part 1, Item 2.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.
−Removed: However, the risks and uncertainties that we face are not limited to those described below and those set forth in our SEC filings.
−Removed: Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our common stock, particularly in light of the changing nature of the COVID-19 pandemic and related economic disruptions.
−Removed: If the COVID-19 pandemic worsens and new, more restrictive public health measures are implemented, there could be a material adverse impact on our business and results of operations.
−Removed: The continuing COVID-19 pandemic and related public health measures have caused economic disruptions that have adversely affected, and are expected to continue to adversely affect, elements of our business.
−Removed: We have, however, been classified as an essential business and been allowed to remain open but our operational costs have increased.
−Removed: To date, we have not experienced a sustained decline in overall sales, although the sales of certain categories, such as higher margin Easter merchandise at the Dollar Tree banner, were materially and adversely impacted.
−Removed: There continues to be uncertainty and unpredictability about the impact of the COVID-19 pandemic on our financial and operating results in future periods.
−Removed: If the pandemic worsens, governments may reinstate or extend business or personal restrictions, and we could be forced to curtail or restrict operations.
−Removed: We might also experience new disruptions in our supply chain and sources of supply, suffer facility closures or encounter difficulties in hiring or retaining the workforce required for our business.
−Removed: These circumstances, if applicable for an extended duration or across significant parts of our operating footprint, could have a material adverse effect on our business and results of operations.
−Removed: The COVID-19 pandemic and public health measures have already contributed to, among other things:
−Removed: Increases in the cost of operating our stores and distribution centers, including temporarily higher wages and bonuses paid to associates, enhanced cleaning protocols and the cost of personal protection equipment.
−Removed: Disruptions in the patterns of consumer demand, which has led to, among other things, decreased demand for Easter and party merchandise in the Dollar Tree segment, an increase in consumer demand for household cleaning and other essential supplies and corresponding difficulty in our ability to maintain those items in stock, fluctuations in demand for discretionary products, and an increase in demand for online sales (which is an insignificant part of our business) and home or curbside deliveries (which we do not offer).
−Removed: Decreasing foot traffic in our stores as a result of the promotion of social distancing, the adoption of various governmental restrictions on personal and business activities and changing consumer attitudes with respect to in-person shopping and changes in shopping patterns.
−Removed: Reduced consumer demand for holiday, seasonal, party, and other discretionary products that generally carry a higher margin may have a negative impact on our gross profit margin, especially in the later part of the year when they typically form a larger part of our merchandise mix.
−Removed: It is uncertain what effect the COVID-19 crisis will have on upcoming holiday merchandise sales such as Christmas.
−Removed: Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of unfavorable economic conditions or political uncertainties, for example because government assistance to households and businesses terminate or are reduced prematurely.
−Removed: Governmental authorities adopted substantial measures, including fiscal and monetary stimulus, to provide economic assistance to individual households and businesses and support economic stability during the pandemic and the related recession and increase in unemployment.
−Removed: We believe the economic intervention has materially benefited our sales.
−Removed: Some of these measures have been exhausted and replaced with lesser measures and we anticipate others will eventually be modified, reduced or discontinued in whole or in part.
−Removed: There can be no assurance that any current or future governmental efforts to support the economy during the pandemic will be sufficient to mitigate the negative effect of the pandemic on the economy.
−Removed: If consumer spending on the goods we sell declines as a result, there could be a material adverse impact on our business and results of operations.
−Removed: To date, the pandemic has not created material disruptions in the functioning of the credit or financial markets or impacted our credit ratings.
−Removed: However, we can provide no assurances that material disruptions in the credit or financial markets will not occur in the future or that such disruptions would not adversely affect our ability to access capital on favorable terms and continue to meet our liquidity needs.
−Removed: We are unable to predict the full extent to which COVID-19 and the resulting recession, or the timing or extent of any economic recovery, will affect our customers, associates, suppliers, vendors, other business partners or our business, results of operations and financial condition.
−Removed: If the pandemic-related recession is prolonged and/or worsens, it could amplify many of the other risks described in the “Risk Factors” section of our most recent Form 10-K.
−Removed: Our supply chain may be disrupted by changes in United States trade policy with China.
−Removed: We rely on domestic and foreign suppliers to provide us with merchandise in a timely manner and at favorable prices.
−Removed: Among our foreign suppliers, China is the source of a substantial majority of our imports.
−Removed: A disruption in the flow of our imported merchandise from China or an increase in the cost of those goods may significantly decrease our profits.
−Removed: The United States has scaled back punitive Section 301 tariffs on certain Chinese imports based on an agreement reached with China, which represents a material benefit to us.
−Removed: However, in 2020, the U.S.
−Removed: and Chinese governments have taken certain actions that appear to indicate worsening relations between the two countries.
−Removed: Such actions include:
−Removed: The signing of an Executive Order by President Trump revoking Hong Kong’s preferential trade status with the U.S.;
−Removed: The closing of the Chinese diplomatic consulate in Houston, Texas and of the U.S.
−Removed: consulate in the city of Chengdu, China and the imposition of sanctions by the U.S.
−Removed: on officials of China and Hong Kong and by the Chinese government on certain U.S.
−Removed: Steps by the U.S.
−Removed: government to restrict access by Chinese companies to U.S.-developed semiconductor technology and to require a Chinese digital company to divest operations in the United States.
−Removed: There is a risk that these actions will further escalate trade tensions between the U.S.
−Removed: and China, resulting in a weakening or disruption in trade relations between the two countries, which could adversely affect our ability to source merchandise from our Chinese suppliers in a timely manner and at a favorable cost.
−Removed: In addition, there is uncertainty as to the actions that may be taken during the remainder of the Trump Administration or under a new Biden Administration with respect to U.S.
−Removed: trade policy with China.
−Removed: The imposition of any new U.S.
−Removed: tariffs on Chinese imports or the taking of other actions against China in the future, and any responses by China, could impair our ability to meet customer demand and could result in lost sales or an increase in our cost of merchandise, which would have a material adverse impact on our business and results of operations.
+Added: There have been no material changes to the risk factors described in “Item 1A.
+Added: Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 30, 2021, other than as set forth in the discussion of risk factors in the “Cautionary Note Regarding Forward-Looking Statements” section and in the discussion of certain items that have impacted or could impact our business or results of operations during 2021 or in the future as set forth in the “Other Items” section within “Item 2.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.
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.