What changed in this filing

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Item 1A. Risk Factors

2021-06-04 compared with 2020-12-04 · 28 added, 25 removed, 0 unchanged (100% of the section changed)

Except as set forth below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020 and our Quarterly Reports on Form 10-Q for the first and second quarters of fiscal 2020.

In addition, the COVID-19 pandemic could exacerbate or trigger other risks discussed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020, any of which could materially affect our business, financial condition and results of operations.

The risk factor entitled “The COVID-19 pandemic may further adversely affect our operations” in our Annual Report on Form-10-K has been updated to read as follows:

The COVID-19 pandemic has adversely impacted, and may continue to adversely impact, our business and our results of operations.

Our operations and the markets in which we operate, procure merchandise and raise capital are currently experiencing significant disruption and financial market volatility associated with an outbreak of a novel strain of coronavirus (“COVID-19”).

The World Health Organization has declared COVID‑19 a pandemic.

Government, as well as state and local governments, have taken unprecedented measures to control the spread of COVID-19 and to provide stimulus as a mitigating measure to deteriorating economic conditions and increasing unemployment.

Many businesses, schools, and other institutions have closed to further the practice of “social distancing” as a method to slow the outbreak.

Our business and results of operations have been significantly impacted by the temporary closure of our physical stores effective March 19, 2020 and reduced foot traffic and sales prior to such time.

Beginning in late April, we began reopening stores in accordance with applicable health guidelines, and by the end of the second quarter of fiscal 2020, all of our stores were reopened.

As guidance and mandates from governments and public health officials continue to evolve, closures to some, or all, of our store and other operations may reoccur.

Our stock price and the stock prices of our peer companies have been volatile.

The extent of the impact of the COVID‑19 pandemic on our operational and financial performance will depend on future developments, including, but not limited to:

the duration and spread of the outbreak, including the impact of recent increases in the number of COVID-19 cases in the areas in which we operate and whether there are additional periods of increases or spikes in the number of such cases in future periods;

mitigating efforts deployed by government agencies and the public at large;

the development, pace of distribution, and effectiveness of vaccines and therapeutic treatments;

the general perception of those mitigating efforts where we operate, procure merchandise and raise capital.

Since our stores have reopened to our customers, our customers and store employees are exposed to certain safety risks.

While we have taken measures to control these risks, the unpredictable nature of COVID-19 may result in unexpected outcomes.

For example, if the protocols established cease to work, or are not followed, the health and safety of our employees and customers could be at risk.

A future outbreak in our stores, distribution center, or corporate headquarters could result in temporary or sustained workforce shortages or store or facility closures.

Inadequate response by us, perceived or otherwise, could impact our costs, our reputation, and/or our ability to recruit a qualified workforce.

Should the COVID-19 pandemic continue to cause financial market volatility and/or adverse changes in economic conditions and consumer spending;

increased operational risks and disruptions to our supply chain and distribution processes;

or periods of temporary closures of our stores to reoccur, our costs may increase, our sales and gross profit may decline and our stock price may decrease, any of which could negatively impact our results of operations, cash flows, and financial condition.

Except as set forth below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021.

The risk factor entitled “Adverse impacts on consumer spending may significantly harm our business“ has been updated to read as follows:

Adverse impacts on consumer spending may significantly harm our business.

The success of our business depends to a significant extent upon the level of consumer spending.

A number of factors may affect the level of consumer spending on merchandise that we offer, including, among other things:

general economic and industry conditions;

unemployment trends and salaries and wage rates;

energy costs, which affect gasoline and home heating prices;

the level of consumer debt;

consumer credit availability;

real estate values and foreclosure rates;

consumer confidence in future economic conditions;

interest rates;

health care costs;

the timing and level of government stimulus payments;

tax rates, policies and timing and amounts of tax refunds;

natural disasters, changing weather patterns and catastrophic events;

war, terrorism, civil unrest, other hostilities and security concerns.

The merchandise we sell generally consists of discretionary items.

Adverse economic conditions and unemployment rates, and any related decrease in consumer confidence and spending may result in reduced consumer demand for discretionary items.

The federal stimulus payments made directly to consumers as a result of the COVID-19 pandemic likely had a positive impact on our net sales, including in the first quarter of fiscal 2021.

The amount of any future stimulus payments and duration of the impact of such payments is uncertain.

Reduced consumer demand could result in reduced traffic in our physical stores and to our e-commerce platform;

a limit to the prices we can charge for our merchandise;

inventory markdowns;

increased selling and promotional expenses;

and the need to close underperforming stores, which could result in higher than anticipated closing costs.

Any of these impacts could have a material adverse effect on our business, results of operations and financial condition.

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.

What changed 10-Q

Item 1A. Risk Factors