The following discussion and analysis of the Big 5 Sporting Goods Corporation
("we," "our," "us") financial condition and results of operations includes
information with respect to our plans and strategies for our business and should
be read in conjunction with our interim unaudited condensed consolidated
financial statements and related notes ("Interim Financial Statements") included
herein, the Risk Factors included herein and in our other filings with the
Securities and Exchange Commission ("SEC"), and our consolidated financial
statements, related notes, Risk Factors and Management's Discussion and Analysis
of Financial Condition and Results of Operations contained in our Annual Report
on Form 10-K for the fiscal year ended January 1, 2023.
Our fiscal year ends on the Sunday nearest December 31. Fiscal 2023 is comprised
of 52 weeks and ends on December 31, 2023. Fiscal 2022 was comprised of 52 weeks
and ended on January 1, 2023. The interim periods in fiscal 2023 and 2022 are
each comprised of 13 weeks.
Overview
We are a leading sporting goods retailer in the western United States, with 430
stores and an e-commerce platform under the name "Big 5 Sporting Goods" as of
April 2, 2023. We provide a full-line product offering in a traditional sporting
goods store format that averages approximately 12,000 square feet. Our product
mix includes athletic shoes, apparel and accessories, as well as a broad
selection of outdoor and athletic equipment for team sports, fitness, camping,
hunting, fishing, home recreation, tennis, golf, and winter and summer
recreation.
In the first quarter of fiscal 2023 we closed two stores and in the first
quarter of fiscal 2022 we did not open or close any stores. For fiscal 2023, we
anticipate opening approximately six new stores and closing approximately six
stores.
Executive Summary
Net income decreased in the first quarter of fiscal 2023 compared with the first
quarter of fiscal 2022 as a result of reduced net sales and lower merchandise
margins year over year. Reduced net sales in the first quarter of fiscal 2023 in
part reflected challenging macro-economic conditions including significant
inflationary pressures which dampened consumer sentiment and negatively impacted
discretionary spending.
•
Net sales for the first quarter of fiscal 2023 decreased 7.1% to $224.9 million
compared to $242.0 million for the first quarter of fiscal 2022. The decrease in
net sales reflects a decline of 7.1% in same store sales when compared with the
first quarter of fiscal 2022. Our lower same store sales in the first quarter of
fiscal 2023 in part reflected significant inflationary pressures and heightened
recessionary concerns that negatively impacted consumer demand, which
contributed to reduced net sales across our major merchandise categories of
hardgoods and footwear, partially offset by an increase in our apparel category
that reflected higher winter-product sales.
•
Gross profit for the first quarter of fiscal 2023 represented 33.4% of net
sales, compared with 35.5% in the first quarter of the prior year. The decrease
in gross profit margin primarily reflects higher store occupancy and
distribution expense as a percentage of net sales as well as lower merchandise
margins compared with the prior year. While merchandise margins were down year
over year they remained healthy and continued to compare favorably to
pre-pandemic levels.
•
Selling and administrative expense for the first quarter of fiscal 2023 remained
relatively unchanged at $75.2 million, or 33.4% of net sales, compared to $75.3
million, or 31.1% of net sales, for the first quarter of fiscal 2022. Selling
and administrative expense primarily reflects decreases in company
performance-based incentive accruals offset by an increase in employee labor
expense.
•
Net income for the first quarter of fiscal 2023 was $0.2 million, or $0.01 per
diluted share, compared to net income of $9.1 million, or $0.41 per diluted
share, for the first quarter of fiscal 2022, primarily reflecting lower net
sales and, to a lesser degree, lower merchandise margins year over year.
•
Operating cash flow for the first quarter of fiscal 2023 was a positive $12.3
million compared to operating cash flow in the first quarter of fiscal 2022 of a
negative $23.7 million. The increased operating cash flow was due primarily to
decreased funding of merchandise inventory and accrued expenses, primarily
related to performance-based incentive accruals, partially offset by decreased
net income.
•
Capital expenditures for the first quarter of fiscal 2023 decreased to $2.5
million from $2.9 million for the first quarter of fiscal 2022. We expect to
open approximately six new stores in fiscal 2023, after opening three new stores
in the prior year.
- 18 -
--------------------------------------------------------------------------------
•
We had cash and cash equivalents of $27.5 million, $25.6 million and $62.0
million as of April 2, 2023, January 1, 2023 and April 3, 2022, respectively.
The balances as of April 2, 2023 and April 3, 2022 included cash equivalents of
$15.0 million and $50.0 million, respectively, related to investments in
highly-liquid U.S. Treasury bills. We have had no borrowings under our credit
facility since the full pay-down of outstanding balances under the credit
facility in the third quarter of fiscal 2020.
•
We paid cash dividends in the first quarter of fiscal 2023 and 2022 of $6.1
million, or $0.25 per share.
•
We did not repurchase any shares of common stock in the first quarter of fiscal
2023, and we repurchased 94,983 shares of common stock for $1.6 million in the
first quarter of fiscal 2022.
Results of Operations
The results of the interim periods are not necessarily indicative of results for
the entire fiscal year.
13 Weeks Ended April 2, 2023 Compared to 13 Weeks Ended April 3, 2022
The following table sets forth selected items from our interim unaudited
condensed consolidated statements of operations by dollar and as a percentage of
our net sales for the periods indicated:
13 Weeks Ended
April 2, April 3,
2023 2022
(Dollars in thousands)
Net sales $ 224,939 100.0 % $ 241,981 100.0 %
Cost of sales (1) 149,795 66.6 156,048 64.5
Gross profit 75,144 33.4 85,933 35.5
Selling and administrative expense (2) 75,173 33.4 75,317 31.1
Operating (loss) income (29 ) 0.0 10,616 4.4
Interest (income) expense (115 ) (0.1 ) 184 0.1
Income before income taxes 86 0.1 10,432 4.3
Income tax (benefit) expense (107 ) 0.0 1,329 0.5
Net income $ 193 0.1 % $ 9,103 3.8 %
(1)
Cost of sales includes the cost of merchandise, net of discounts or allowances
earned, freight, inventory reserves, buying, distribution center expense,
including depreciation and amortization, and store occupancy expense. Store
occupancy expense includes rent, amortization of leasehold improvements, common
area maintenance, property taxes and insurance.
(2)
Selling and administrative expense includes store-related expense, other than
store occupancy expense, as well as advertising, depreciation and amortization,
expense associated with operating our corporate headquarters and impairment
charges, if any.
Net Sales. Net sales decreased by $17.1 million, or 7.1%, to $224.9 million in
the first quarter of fiscal 2023 from $242.0 million in the first quarter last
year. The change in net sales reflected the following:
•
Same store sales decreased by $17.0 million, or 7.1%, for the 13 weeks ended
April 2, 2023, versus the comparable 13-week period in the prior year. The
decline in same store sales was attributed to the following:
o
The decrease in same store sales in the first quarter of fiscal 2023 in part
reflected significant inflationary pressures and heightened recessionary
concerns that dampened consumer sentiment and negatively impacted discretionary
spending. While we experienced strong winter-related product sales as a result
of cold winter-weather conditions during the first fiscal quarter, the
continuing cold and wet winter-weather patterns negatively impacted sales for
the spring categories of product such as baseball and other spring sports during
the second half of the fiscal quarter.
o
Our lower same store sales reflected decreases in our major merchandise
categories of hardgoods and footwear, while our apparel category increased
reflecting higher winter-product sales.
o
Same store sales comparisons are made on a comparable-day basis. Same store
sales for a period normally consist of sales for stores that operated throughout
the period and the full corresponding prior-year period, along with sales from
e-commerce. Same store sales comparisons exclude sales from stores permanently
closed, or stores in the process of closing, during the comparable periods.
Sales from e-commerce in the first quarter of fiscal 2023 and 2022 were not
material.
•
We experienced decreased customer transactions of 5.9% and a lower average sale
per transaction of 1.2% in the first quarter of fiscal 2023 compared to the
prior year.
- 19 -
--------------------------------------------------------------------------------
Gross Profit. Gross profit decreased by $10.8 million to $75.1 million, or 33.4%
of net sales, in the 13 weeks ended April 2, 2023, compared with $85.9 million,
or 35.5% of net sales, in the 13 weeks ended April 3, 2022. The change in gross
profit was primarily attributable to the following:
•
Net sales decreased by $17.1 million, or 7.1%, compared with the first quarter
of last year.
•
Merchandise margins, which exclude buying, occupancy and distribution expense,
decreased by an unfavorable 23 basis points compared with the first quarter of
last year when merchandise margins increased by a favorable 119 basis points.
Our decreased merchandise margins primarily reflect increased promotional
pricing and higher product purchase costs. While merchandise margins were down
year over year they remained healthy and continued to compare favorably to
pre-pandemic levels.
•
Store occupancy expense increased by $0.7 million, or an unfavorable 110 basis
points as a percentage of net sales, compared with the first quarter of last
year.
•
Distribution expense, including costs capitalized into inventory, increased by
$0.5 million, or an unfavorable 59 basis points as a percentage of net sales, in
the first quarter of fiscal 2023 compared to the prior year. The increase
primarily reflected decreased costs capitalized into inventory, which were
partially offset by lower trucking and fuel expense.
Selling and Administrative Expense. Selling and administrative expense decreased
by $0.1 million to $75.2 million, or 33.4% of net sales, in the 13 weeks ended
April 2, 2023, compared to $75.3 million, or 31.1% of net sales, in the first
quarter last year. The change in selling and administrative expense was
primarily attributable to the following:
•
Administrative expense decreased by $1.7 million, primarily attributable to
decreases in company performance-based incentive accruals and employee
benefit-related expense in the current year.
•
Our advertising expense decreased by $0.2 million in the first quarter of fiscal
2023. Our expense remains less than half of pre-pandemic expense as a result of
initial measures we took in response to COVID-19 in fiscal 2020. We expect our
expense to continue to benefit from reduced advertising activity in the
foreseeable future as we continue to evaluate the impact on our sales.
•
Store-related expense, excluding occupancy, increased by $1.8 million due
largely to increases in employee labor expense, store security and systems
improvements and the impact of broad-based inflation, partially offset by
reductions in health and welfare expense as compared to the prior year which
experienced a surge related to post-COVID-19 medical treatment. Wages continue
to reflect the incremental impact of legislated minimum wage rate increases
primarily in California, where over half of our stores are located. In
California, state-wide minimum wage rates have risen from $10.00 per hour in
2017 to $15.50 per hour beginning on January 1, 2023. Additionally, certain
other jurisdictions within California, including Los Angeles and San Francisco,
as well as various other states in which we do business, are and have been
implementing their own scheduled increases that exceed the state-wide minimum
wage rates, which may also include interim impacts effective at various points
throughout the year. Labor expense for the first quarter of fiscal 2023 also
reflected higher demand for labor in many of our markets resulting in higher
wages. We estimate that the combined impact of these wage pressures caused our
labor expense to increase by approximately $1.2 million for the first quarter of
fiscal 2023 compared with the first quarter of fiscal 2022.
Interest (Income) Expense. Interest expense decreased by $0.3 million in the
first quarter of fiscal 2023 compared to the first quarter of fiscal 2022 as a
result of generating interest income for the current fiscal year reflecting
higher interest earned on cash equivalents.
Income Taxes. The provision for income taxes was a benefit of $0.1 million for
the first quarter of fiscal 2023 compared to an expense of $1.3 million for the
first quarter of fiscal 2022, primarily reflecting lower pre-tax income and a
tax deduction related to share-based compensation compared to the first quarter
of fiscal 2022.
- 20 -
--------------------------------------------------------------------------------
Liquidity and Capital Resources
Our principal liquidity requirements are for working capital, capital
expenditures and cash dividends. We fund our liquidity requirements primarily
through cash and cash equivalents, cash flows from operations and borrowings
from the revolving credit facility, when necessary.
As of April 2, 2023, we had $27.5 million of cash and cash equivalents compared
to $62.0 million of cash and cash equivalents as of April 3, 2022. Our cash
flows from operating, investing and financing activities are summarized as
follows:
13 Weeks Ended
April 2, April 3,
2023 2022
(In thousands)
Total cash provided by (used in):
Operating activities $ 12,292 $ (23,717 )
Investing activities (2,529 ) (2,926 )
Financing activities (7,869 ) (8,739 )
Net increase (decrease) in cash and cash equivalents $ 1,894 $ (35,382 )
Operating Activities. Operating cash flows for the first quarter of fiscal 2023
and 2022 were a positive $12.3 million and a negative $23.7 million,
respectively. The increased cash flow provided by operating activities for the
first quarter of fiscal 2023 compared to the prior year primarily reflects
decreased funding of merchandise inventory and accrued expenses, primarily
related to performance-based incentive accruals, partially offset by lower net
income.
Investing Activities. Net cash used in investing activities for the first
quarter of fiscal 2023 and 2022 was $2.5 million and $2.9 million, respectively.
Capital expenditures, excluding non-cash acquisitions, represented substantially
all of the cash used in investing activities for each period. Capital
expenditures for both periods primarily reflect store-related remodeling,
distribution center investments and computer hardware and software purchases.
Financing Activities. Financing cash flows for the first quarter of fiscal 2023
and 2022 were a negative $7.9 million and a negative $8.7 million, respectively.
For the first quarter of both periods, cash was used primarily to fund dividend
payments and make principal payments on finance lease liabilities, partially
offset by proceeds received from the exercise of employee share option awards.
For the first quarter of fiscal 2022, cash was also used to purchase treasury
stock.
As of April 2, 2023, January 1, 2023 and April 3, 2022, we had no revolving
credit borrowings, and $1.4 million, $1.4 million and $1.1 million,
respectively, of letter of credit commitments outstanding.
In fiscal 2022 we paid quarterly cash dividends of $0.25 per share of
outstanding common stock. In the first quarter of fiscal 2023, we paid a
quarterly cash dividend of $0.25 per share of outstanding common stock, and in
the second quarter of fiscal 2023, our Board of Directors declared a quarterly
cash dividend of $0.25 per share of outstanding common stock, which will be paid
on June 15, 2023 to stockholders of record as of June 1, 2023.
Periodically, we repurchase our common stock in the open market pursuant to
programs approved by our Board of Directors. We may repurchase our common stock
for a variety of reasons, including, among other things, our alternative cash
requirements, existing business conditions and the current market price of our
stock. In the first quarter of fiscal 2022, our Board of Directors authorized a
new share repurchase program of up to $25.0 million of our common stock, which
replaced the previous share repurchase program. Under this program, we may
purchase shares from time to time in the open market or in privately negotiated
transactions in compliance with the applicable rules and regulations of the SEC.
However, the timing and amount of such purchases, if any, would be at the
discretion of our management and Board of Directors, and would depend on market
conditions and other considerations. We repurchased 94,983 shares of our common
stock for $1.6 million in the first quarter of fiscal 2022 and repurchased
295,719 shares of our common stock for $4.1 million in the full year of fiscal
2022. We did not repurchase any shares of our common stock in the first quarter
of fiscal 2023. Since the inception of our initial share repurchase program in
May 2006 through April 2, 2023, we have repurchased a total of 4,186,014 shares
for $53.6 million.
- 21 -
--------------------------------------------------------------------------------
Loan Agreement. We are party to a Loan, Guaranty and Security agreement with
Bank of America, N.A. ("BofA"), as agent and lender, which was amended on
November 22, 2021 and October 19, 2022 (as so amended, the "Loan Agreement").
The Loan Agreement has a maturity date of February 24, 2026 and provides for a
revolving credit facility with an aggregate committed availability of up to
$150.0 million. We may also request additional increases in aggregate
availability, up to a maximum of $200.0 million, in which case the existing
lender under the Loan Agreement will have the option to increase their
commitment to accommodate the requested increase. If the lender does not
exercise that option, we may (with the consent of BofA in its role as the
administrative agent, not to be unreasonably withheld) seek other lenders
willing to provide such commitments. The credit facility includes a $50.0
million sublimit for issuances of letters of credit.
We may borrow under the Loan Agreement from time to time, provided the amounts
outstanding will not exceed the lesser of the then aggregate committed
availability (as discussed above) and the Borrowing Base (such lesser amount
being referred to as the "Line Cap"). As defined in the Loan Agreement, the
"Borrowing Base" generally is comprised of the sum, at the time of calculation,
of (a) 90.00% of eligible credit card receivables; plus (b) the cost of eligible
inventory (other than eligible in-transit inventory), net of inventory reserves,
multiplied by 90.00% of the appraised net orderly liquidation value of eligible
inventory (expressed as a percentage of the cost of eligible inventory); plus
(c) the cost of eligible in-transit inventory, net of inventory reserves,
multiplied by 90.00% of the appraised net orderly liquidation value of eligible
in-transit inventory (expressed as a percentage of the cost of eligible
in-transit inventory), minus (d) certain agreed-upon reserves as well as other
reserves established by BofA in its role as the administrative agent in its
reasonable discretion.
Generally, we may designate specific borrowings under the Loan Agreement as
either base rate loans or Term SOFR rate loans. The applicable interest rate on
our borrowings is a function of the daily average, over the preceding fiscal
quarter, of the excess of the Line Cap over amounts borrowed (such amount being
referred to as the "Average Daily Availability"). Those loans designated as Term
SOFR rate loans bear interest at a rate equal to the then applicable secured
overnight financing rate as administered by the Federal Reserve Bank of New York
("SOFR") rate plus a 0.10% "SOFR adjustment" spread, plus an applicable margin
as shown in the table below. Those loans designated as base rate loans bear
interest at a rate equal to the applicable margin for base rate loans (as shown
below) plus the highest of (a) the Federal funds rate, as in effect from time to
time, plus one-half of one percent (0.50%), (b) the one-month SOFR rate, plus
one percentage point (1.00%), or (c) the rate of interest in effect for such day
as announced from time to time within BofA as its "prime rate." The applicable
margin for all loans will be a function of Average Daily Availability for the
preceding fiscal quarter as set forth below.
SOFR Rate Base Rate
Level Average Daily Availability Applicable Margin Applicable Margin
I Greater than or equal to $70,000,000 1.375% 0.375%
II Less than $70,000,000 1.500% 0.500%
The commitment fee assessed on the unused portion of the credit facility is
0.20% per annum.
Obligations under the Loan Agreement are secured by a general lien on and
security interest in substantially all of our assets. The Loan Agreement
contains covenants that require us to maintain a fixed charge coverage ratio of
not less than 1.0:1.0 in certain circumstances, and limits the ability to, among
other things, incur liens, incur additional indebtedness, transfer or dispose of
assets, change the nature of the business, guarantee obligations, pay dividends
or make other distributions or repurchase stock, and make advances, loans or
investments. We may generally declare or pay cash dividends or repurchase stock
only if, among other things, no default or event of default then exists or would
arise from such dividend or repurchase of stock and, after giving effect to such
dividend or repurchase, certain availability and/or fixed charge coverage ratio
requirements are satisfied, although we are permitted to make up to $5.0 million
of dividend payments or stock repurchases per year without satisfaction of the
availability or fixed charge coverage ratio requirements, but dividends or stock
repurchases made without satisfying the availability and/or fixed charge
coverage ratio requirements will require the establishment of an additional
reserve that will reduce borrowing availability under the Loan Agreement for 75
days. The Loan Agreement contains customary events of default, including,
without limitation, failure to pay when due principal amounts with respect to
the credit facility, failure to pay any interest or other amounts under the
credit facility, failure to comply with certain agreements or covenants
contained in the Loan Agreement, failure to satisfy certain judgments against
us, failure to pay when due (or any other default which permits the acceleration
of) certain other material indebtedness in principal amount in excess of $5.0
million, and certain insolvency and bankruptcy events.
Future Capital Requirements. We had cash and cash equivalents of $27.5 million
as of April 2, 2023. We expect capital expenditures for fiscal 2023, excluding
non-cash acquisitions, to range from approximately $15.0 million to $20.0
million primarily to fund store-related remodeling, the opening of new stores,
distribution center investments and computer hardware and software purchases.
For fiscal 2023, we anticipate opening approximately six new stores and closing
approximately six stores.
- 22 -
--------------------------------------------------------------------------------
Dividends are paid at the discretion of our Board of Directors. In fiscal 2022
we paid quarterly cash dividends of $0.25 per share of outstanding common stock.
In the first quarter of fiscal 2023, we paid a quarterly cash dividend of $0.25
per share of outstanding common stock, and in the second quarter of fiscal 2023,
our Board of Directors declared a quarterly cash dividend of $0.25 per share of
outstanding common stock, which will be paid on June 15, 2023 to stockholders of
record as of June 1, 2023.
As of April 2, 2023, a total of $20.9 million remained available for share
repurchases under our new share repurchase program. We did not repurchase any
shares of our common stock in the first quarter of fiscal 2023. We repurchased
94,983 shares of our common stock for $1.6 million in the first quarter of
fiscal 2022 and repurchased 295,719 shares of our common stock for $4.1 million
in the full year of fiscal 2022. We consider several factors in determining when
and if we make share repurchases including, among other things, our alternative
cash requirements, existing business conditions and the market price of our
stock.
We believe we will be able to fund our cash requirements from cash and cash
equivalents, operating cash flows and borrowings from our credit facility, for
at least the next 12 months.
Contractual Obligations. Our material contractual obligations include operating
lease commitments associated with our leased properties and other occupancy
expense, finance lease obligations, borrowings under the credit facility, if
any, and other liabilities. Operating lease commitments consist principally of
leases for our retail store facilities, distribution center and corporate
offices. These leases frequently include options which permit us to extend the
terms beyond the initial fixed lease term, and we intend to renegotiate most of
these leases as they expire. Operating lease commitments also consist of
information technology ("IT") systems hardware, distribution center delivery
tractors and equipment. Additional information regarding our operating and
finance leases is available in Notes 2 and 5 to the Interim Financial Statements
included in Part I, Item 1, Financial Statements, of this Quarterly Report on
Form 10-Q.
In the first quarter of fiscal 2023 and 2022, we had zero borrowings under our
revolving credit facility.
In the ordinary course of business, we enter into arrangements with vendors to
purchase merchandise in advance of expected delivery. Because most of these
purchase orders do not contain any termination payments or other penalties if
cancelled, they are not included as outstanding contractual obligations.
Critical Accounting Estimates
As discussed in Part II, Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, of our Annual Report on Form 10-K
for the fiscal year ended January 1, 2023, we consider our estimates on
valuation of merchandise inventory and valuation of long-lived assets to be
among the most critical in understanding the judgments that are involved in
preparing our consolidated financial statements. There have been no significant
changes to these estimates in the 13 weeks ended April 2, 2023.
Seasonality and Impact of Inflation
We experience seasonal fluctuations in our net sales and operating results,
which can suffer when weather does not conform to seasonal norms, such as the
first quarter of fiscal 2022 when we experienced warm and dry winter-weather
conditions across our markets that resulted in significant carryover of winter
inventory. Seasonality in our net sales influences our buying patterns which
directly impacts our merchandise and accounts payable levels and cash flows. We
purchase merchandise for seasonal activities in advance of a season and
supplement our merchandise assortment as necessary and when possible during the
season. Our efforts to replenish products during a season are not always
successful. In the fourth fiscal quarter, which includes the holiday selling
season and the start of the winter selling season, we normally experience higher
inventory purchase volumes and increased expense for staffing and advertising.
If we miscalculate the consumer demand for our products generally or for our
product mix in advance of a season, particularly the fourth quarter, our net
sales can decline, which can harm our financial performance. A significant
shortfall from expected net sales, particularly during the fourth quarter, can
negatively impact our annual operating results.
In fiscal 2022 and the first quarter of fiscal 2023, we experienced greater
inflation in the cost of products that we purchase for resale as well as higher
freight costs than in previous years. While our merchandise inventory costs have
been impacted by inflationary pressures, we have generally been able to adjust
our selling prices in response to these higher product purchase costs. However,
if we are unable to adjust our selling prices for product purchase cost
increases that might occur in the future, then our merchandise margins could
decline, which would adversely impact our operating results. In fiscal 2022 and
the first quarter of fiscal 2023, we also experienced increased wage expense as
a result of higher demand and competition for labor in many of our markets and
we expect these dynamics to continue in fiscal 2023. Broad-based inflationary
pressures adversely impacted many categories of costs and expenses during fiscal
2022 and this impact is expected to continue during fiscal 2023.
- 23 -
--------------------------------------------------------------------------------
Recently Issued Accounting Updates
See Note 2 to the Interim Financial Statements included in Part I, Item 1,
Financial Statements, of this Quarterly Report on Form 10-Q.
Forward-Looking Statements
This document includes certain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements relate to, among other things, our financial condition, our results
of operations, our growth strategy and the business of our company generally. In
some cases, you can identify such statements by terminology such as "may,"
"could," "project," "estimate," "potential," "continue," "should," "expects,"
"plans," "anticipates," "believes," "intends" or other such terminology. These
forward-looking statements involve known and unknown risks and uncertainties and
other factors that may cause our actual results in current or future periods to
change significantly and differ materially from forecasted results. These
forward-looking statements involve known and unknown risks and uncertainties and
other factors that may cause our actual results in current or future periods to
change significantly and differ materially from forecasted results. These risks
and uncertainties include, among other things, the economic impacts of COVID-19,
including any potential variants, on our business operations, including as a
result of regulations that may be issued in response to COVID-19, global supply
chain disruptions resulting from the ongoing conflict in Ukraine, changes in the
consumer spending environment, fluctuations in consumer holiday spending
patterns, increased competition from e-commerce retailers, breach of data
security or other unauthorized disclosure of sensitive personal or confidential
information, the competitive environment in the sporting goods industry in
general and in our specific market areas, inflation, product availability and
growth opportunities, changes in the current market for (or regulation of)
firearm-related products, a reduction or loss of product from a key supplier,
disruption in product flow, seasonal fluctuations, weather conditions, changes
in cost of goods, operating expense fluctuations, increases in labor and
benefit-related expense, changes in laws or regulations, including those related
to tariffs and duties as well as environmental, social and governance issues,
public health issues (including those caused by COVID-19 or any potential
variants), impacts from civil unrest or widespread vandalism, lower than
expected profitability of our e-commerce platform or cannibalization of sales
from our existing store base which could occur as a result of operating the
e-commerce platform, litigation risks, stockholder campaigns and proxy contests,
risks related to our historically leveraged financial condition, changes in
interest rates, credit availability, higher expense associated with sources of
credit resulting from uncertainty in financial markets and economic conditions
in general. Those and other risks and uncertainties are more fully described in
Part II, Item 1A, Risk Factors, in this report and in Part I, Item 1A, Risk
Factors, in our Annual Report on Form 10-K and other filings with the SEC. We
caution that the risk factors set forth in this report and the other reports
that we file with the SEC are not exclusive. In addition, we conduct our
business in a highly competitive and rapidly changing environment. Accordingly,
new risk factors may arise. It is not possible for management to predict all
such risk factors, nor to assess the impact of all such risk factors on our
business or the extent to which any individual risk factor, or combination of
factors, may cause results to differ materially from those contained in any
forward-looking statement. We undertake no obligation to revise or update any
forward-looking statement that may be made from time to time by us or on our
behalf.
© Edgar Online, source Glimpses