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The nature and scope of the consequences to date are difficult to evaluate precisely, and their future course is impossible to predict with confidence.
−Removed: The COVID-19 crisis has already had several significant effects on our business and our financial condition, including the following:
−Removed: • the impact of the pandemic on the economies and financial markets of the regions in which we operate, including an increase in unemployment, has resulted in consumers having less disposable income and, in turn, in decreased sales of our products;
−Removed: • “shelter in place” and other similar mandated or suggested isolation protocols have disrupted third-party retailer stores and company-owned stores, via store closures or reduced operating hours and decreased retail traffic;
−Removed: • many of our third-party retailer stores within the Wholesale channel are closed in the U.S.
−Removed: and around the world;
−Removed: • company-owned stores within the Direct channel are either closed or operating under restricted conditions.
−Removed: Table of C o ntents
−Removed: These effects, particularly store closures, have negatively impacted sales at the end of the quarter and may negatively impact sales until the COVID-19 pandemic moderates.
−Removed: At this time, we cannot reasonably estimate the length of time these closures will remain in effect, and the inability to sell our products through the Wholesale channel and within company-owned stores within the Direct channel has had and will continue to have a material adverse effect on our revenues and results of operation.
−Removed: Our e-commerce operations remain open globally and ready to serve our customers, as do the e-commerce operations for many of our third-party retailers.
+Added: The COVID-19 crisis has already had several significant effects on our business and our financial condition, including the impact of the pandemic on the economies and financial markets of the regions in which we operate.
+Added: "Shelter in place” and other similar mandated or suggested isolation protocols have disrupted third-party retail stores in our Wholesale channel and company-owned stores in our Direct channel, via store closures or reduced operating hours in the U.S.
+Added: and around the world, which has decreased retail traffic and which also, in turn, decreased sales of our products in March and April when COVID-19 began materially impacting our North America business segment.
+Added: At this time, most third-party retail stores and our company-owned stores have reopened.
+Added: However, we cannot reasonably estimate the length of time these stores will remain open, or if they will be mandated to close again as the COVID-19 crisis continues to evolve.
+Added: The inability to sell our products through the Wholesale channel and within company-owned stores within the Direct channel has had and may continue to have a material adverse effect on our revenues and results of operations.
+Added: Our e-commerce operations remain open globally, as do the e-commerce operations for many of our third-party retailers.
The COVID-19 pandemic is also shifting demand patterns to favor our lower-margin products, which is producing a reduction in our gross margins.
−Removed: These effects began in the latter weeks of March and have continued to date, so effects on the second quarter are likely to be more significant.
The effects of the COVID-19 crisis could be aggravated if the crisis continues, and we could also see additional impacts that might include the following:
−Removed: • a potential global recession, a decline in consumer confidence and spending, or a further increase in unemployment could continue to result in consumers having less disposable income and, in turn, in decreased sales of our products;
−Removed: • the continued disruption to third-party retailer stores and company-owned stores resulting from "shelter in place" and similar protocols, which, even if rolled back, could be reinstated as the pandemic continues to evolve;
+Added: • a potential global recession, a decline in consumer confidence and spending, or a further increase in unemployment or reduction in government stimulus payments could continue to result in consumers having less disposable income and, in turn, decreased sales of our products;
+Added: • the continued disruption to third-party retail stores and company-owned stores resulting from "shelter in place" and similar protocols, which, even though largely rolled back, could be reinstated as the pandemic continues to evolve;
• social distancing measures or changes in consumer spending behaviors due to COVID-19 may continue to impact retail demand after the resumption of more normalized operations and such actions could result in a loss of sales and profit;
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• the failure of our Wholesale channel customers to whom we extend credit to pay amounts owed to us on time, or at all, particularly if such customers are significantly impacted by COVID-19;
−Removed: • the risk that even after the pandemic has initially subsided, fear of COVID-19 re-occurrence could cause customers to avoid public places where our stores and those of our Wholesale partners are located;
−Removed: • we may experience temporary or long-term disruptions in our supply chain, as the outbreak has resulted in travel disruptions and has impacted manufacturing and distribution throughout the world;
+Added: • the risk that the persistence or reoccurrence of COVID-19 could cause customers to avoid public places where our stores and those of our Wholesale partners are located;
+Added: • we have experienced and may continue to experience disruptions in our supply chain, as the outbreak has disrupted travel, affected consumer demand and spending habits and impacted manufacturing and distribution throughout the world;
• we may be required to revise certain accounting estimates and judgments such as, but not limited to, those related to the valuation of long-lived assets and deferred tax assets, which could have a material adverse effect on our financial position and results of operations.
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• our success in attempting to reduce operating costs and conserve cash, which could require further actions to improve our cash position, including but not limited to, implementing expanded employee furloughs and foregoing capital expenditures and other discretionary expenses.
−Removed: Table of C o ntents
Delaware law and our certificate of incorporation and by-laws contain anti-takeover provisions, and on March 27, 2020 our Board of Directors adopted a limited duration shareholder rights agreement, any of which could delay or discourage a merger, tender offer, or assumption of control of the Company not approved by our Board of Directors that some stockholders may consider favorable.
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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.