1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended February 3,2024OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the t
2、ransition period from toCommission file number:001-35600Five Below,Inc.(Exact name of Registrant as specified in its charter)Pennsylvania75-3000378(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S.EmployerIdentification No.)701 Market StreetSuite 300 PhiladelphiaPennsylvania 19106(
3、Address of Principal Executive Offices)(Zip Code)(215)546-7909(Registrants Telephone Number,Including Area Code)Securities registered pursuant to Section 12(b)of the Exchange Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,$0.01 par value per shareFIVEThe N
4、asdaq Stock Market LLCSecurities registered pursuant to Section 12(g)of the Exchange Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the securities act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant
5、to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant wasrequired to file su
6、ch reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the precedi
7、ng 12 months(or forsuch shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions o
8、f“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and emerging growth company in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated Filer Non-Accelerated Filer Smaller Reporting Company Emerging Growth Company If an emerging growth company,indicate by check m
9、ark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of theExchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements
10、 assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate b
11、y check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based comp
12、ensation received by any of the registrants executive officers during the relevant recovery periodpursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No As of July 28,2023,the last business day of the registrants
13、 most recently completed second fiscal quarter,the aggregate market value of common stock(based upon the last reported sales price on The Nasdaq Global Select Market)heldby non-affiliates of the registrant was approximately 11,334,179,492.The number of shares of the registrants common stock,$0.01 pa
14、r value,outstanding as of March 20,2024 was 55,235,131.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants Proxy Statement for the 2024 Annual Meeting of Shareholders(hereinafter referred to as the“Proxy Statement”)are incorporated by reference into Part III of this report.SPECIAL NOTE RE
15、GARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K,or Annual Report,contains forward-looking statements pursuant to the“safe harbor”provisions of the Private Securities Litigation Reform Act of 1995.Forward-looking statements relate to expectations,beliefs,projections,future plans and
16、 strategies,anticipated events or trends and similar expressions concerning matters that are not historical facts or present facts orconditions,such as statements regarding our industry,business strategy,goals and expectations concerning our market position,future operations or results of operations
17、,prospects and strategies for futuregrowth,the introduction of new merchandise,the implementation of our marketing and branding strategies,margins,profitability,capital expenditures,liquidity and capital resources and other financial andoperating information.Investors can identify these statements b
18、y the fact that they use words such as anticipate,assume,”believe,continue,could,estimate,expect,intend,may,plan,potential,predict,project,future,may,will,should,expects,plans,anticipates,believes,estimates,predicts,potential and similar terms and phrases,or the negative of these termsor other compa
19、rable terminology.The forward-looking statements contained in this Annual Report reflect our views as of the date of this report about future events and are subject to risks,uncertainties,assumptions and changes incircumstances that may cause events or our actual activities or results to differ sign
20、ificantly from those expressed in any forward-looking statement.Although we believe that the expectations reflected in theforward-looking statements are reasonable,we cannot guarantee future events,results,actions,levels of activity,performance or achievements.A number of important factors could cau
21、se actual results todiffer materially from those indicated by the forward-looking statements,including,but not limited to,those factors described below,in Part I,Item 1A“Risk Factors,”and in Part II,Item 7“ManagementsDiscussion and Analysis of Financial Condition and Results of Operations.”These fac
22、tors include without limitation:the impacts of inflation and increasing commodity prices;failure to successfully implement our growth strategy;disruptions in our ability to select,obtain,distribute and market merchandise profitably;reliance on merchandise manufactured outside of the United States;th
23、e direct and indirect impact of current and potential tariffs imposed and proposed by the United States on foreign imports,including,without limitation,the tariffs themselves,any counter-measures thereto and any indirect effects on consumer discretionary spending,which could increase the cost to us
24、of certain products,lower our margins,increase our import related expenses,andreduce consumer spending for discretionary items,each of which could have a material adverse effect on our business,financial condition and results of future operations;the impact of price increases,such as,a reduction in
25、our unit sales,damage to our reputation with our customers,and our becoming less competitive in the marketplace;dependence on the volume of traffic to our stores and website;inability to successfully build,operate or expand our shipcenters or network capacity;disruptions to the global supply chain,i
26、ncreased cost of freight,constraints on shipping capacity to transport inventory or the timely receipt of inventory;extreme weather conditions in the areas in which our stores are located could negatively affect our business and results of operations;disruptions in our information technology systems
27、 and our inability to maintain and update those systems could adversely affect operations and our customers;systemic failure of the banking system in the United States or globally;the risks of cyberattacks or other cyber incidents,such as the failure to secure customers confidential or credit card i
28、nformation,or other private data relating to our crew or our Company,including the costs associated with protection against or remediation of such incidents;increased usage of machine learning and other types of artificial intelligence in our business,and challenges with properly managing its use in
29、creased operating costs or exposure to fraud or theft due to customer payment-related risks;inability to increase sales and improve the efficiencies,costs and effectiveness of our operations;dependence on our executive officers,senior management and other key personnel or inability to hire additiona
30、l qualified personnel;inability to successfully manage our inventory balances and inventory shrinkage;inability to meet our lease obligations;the costs and risks of constructing and owning real property;changes in our competitive environment,including increased competition from other retailers and t
31、he presence of online retailers;the seasonality of our business;inability to successfully implement our expansion into online retail;natural disasters,adverse weather conditions,pandemic outbreaks,global political events,war,terrorism or civil unrest;the impact of changes in tax legislation;the impa
32、ct to our financial performance related to insurance programs;inability to protect our brand name,trademarks and other intellectual property rights;the impact of product and food safety claims and effects of legislation;and restrictions imposed by our indebtedness on our current and future operation
33、s.Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements.All of theforward-looking statements we have included in this Annual Report are based on information available to us
34、on the date of this report.We undertake no obligation to publicly update or revise any forward-looking statement,whether as a result of new information,future events or otherwise,except as otherwise required by law.INDEXPART IPageITEM 1.BUSINESS6ITEM 1A.RISK FACTORS18ITEM 1B.UNRESOLVED STAFF COMMENT
35、S32ITEM 2.PROPERTIES33ITEM 3.LEGAL PROCEEDINGS34ITEM 4.MINE SAFETY DISCLOSURES34PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES35ITEM 6.SELECTED FINANCIAL DATA36ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION A
36、ND RESULTS OF OPERATIONS38ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK48ITEM 8.CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA49ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE71ITEM 9A.CONTROLS AND PROCEDURES71ITEM 9B.OTHER I
37、NFORMATION74ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS75PART IIIITEM 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE75ITEM 11.EXECUTIVE COMPENSATION75ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS75ITEM
38、13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE75ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES75PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES76ITEM 16.FORM 10-K SUMMARY80SIGNATURES81 PART IITEM 1.BUSINESSGeneralFive Below,Inc.was incorporated in Pennsylvania
39、 in January 2002.Our principal executive office is located at 701 Market Street,Suite 300,Philadelphia,PA19106 and our telephone number is(215)546-7909.Our corporate website address is .The information contained on,or accessible through,ourcorporate website does not constitute part of this Annual Re
40、port.As used herein,“Five Below,”the“Company,”“we,”“us,”“our”or“our business”refers to FiveBelow,Inc.(collectively with its wholly owned subsidiaries),except as expressly indicated or unless the context otherwise requires.As used herein,references to“Crew”refers to our employees,and references to“Sh
41、ipcenters”refers to our distribution and logistics centers.We purchase products in reaction to existing marketplace trends and,hence,refer to our products as“trend-right.”We use the term“dynamic”merchandise torefer to the broad range and frequently changing nature of the products we display in our s
42、tores.We use the term“power”shopping center to refer to an unenclosedshopping center with 250,000 to 750,000 square feet of gross leasable area that contains three or more“big box”retailers(large retailers with floor space over 50,000square feet)and various smaller retailers with a common parking ar
43、ea shared by the retailers.We use the term“lifestyle”shopping center to refer to a shopping centeror commercial development that is often located in suburban areas and combines the traditional retail functions of a shopping mall with leisure amenities orientedtowards upscale consumers.We use the ter
44、m“community”shopping center to refer to a shopping area designed to serve a trade area of 40,000 to 150,000 peoplewhere the lead tenant is a variety discount,junior department store and/or supermarket.We use the term“trade area”to refer to the geographic area from which agiven retailer generates a m
45、ajority of its customers.Trade areas vary by market based on geographic size,population density,demographics and proximity toalternative shopping opportunities.We operate on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52-or 53-week period
46、ending on the Saturdayclosest to January 31 of the following year.References to fiscal year 2024 or fiscal 2024 refer to the period from February 4,2024 to February 1,2025,whichconsists of a 52-week fiscal year.References to fiscal year 2023 or fiscal 2023 refer to the period from January 29,2023 to
47、 February 3,2024,which consists of a53-week fiscal year.References to fiscal year 2022 or fiscal 2022 refer to the period from January 30,2022 to January 28,2023,which consists of a 52-weekfiscal year.References to fiscal year 2021 or fiscal 2021 refer to the period from January 31,2021 to January 2
48、9,2022,which consists of a 52-week fiscal year.References to fiscal year 2020 or fiscal 2020 refer to the period from February 2,2020 to January 30,2021,which consists of a 52-week fiscal year.Referencesto“fiscal year 2019”or“fiscal 2019”refer to the period from February 3,2019 to February 1,2020,wh
49、ich consists of a 52-week fiscal year.References to 2024,2023,2022,2021,2020,and 2019 are to our fiscal years unless otherwise specified.Our CompanyFive Below is a leading high-growth value retailer offering trend-right,high-quality products loved by tweens,teens and beyond.We believe life is better
50、 whencustomers are free to“let go&have fun”in an amazing experience filled with unlimited possibilities.We offer a dynamic,edited assortment of exciting products,most priced at$5 and below,including select brands and licensed merchandise across eight worlds:Style,Room,Sports,Tech,Create,Party,Candy
51、and New&Now.Based on our managements experience and industry knowledge,we believe our customer-centric,experience-first,innovative approach to retail has led to a loyalcustomer base and has fostered universal appeal across a variety of age groups beyond our target demographic.We opened the first Fiv
52、e Below store in the greater Philadelphia area in 2002 and,since then,have been expanding throughout the United States.As ofFebruary 3,2024,we operated a total of 1,544 locations across 43 states.Our new store model assumes a store size of approximately 9,500 square feet and istypically located with
53、in power,community and lifestyle shopping centers across a variety of urban,suburban and semi-rural markets.We opened 204 net new storesin fiscal 2023 and we plan to open between 225 and 235 new stores in fiscal 2024.We believe that we have the opportunity to grow our store base to more than 3,500lo
54、cations over time.We also offer our merchandise on the internet,through our e-commerce website,offering home delivery and the option to buy online and pickup in store.Additionally,we sell our merchandise through on-demand third-party delivery services to enable our customers to shop online and recei
55、ve convenientdelivery.All e-commerce sales,which includes shipping and handling revenue,are included in net sales and are included in comparable sales.Our e-commerceexpenses will have components classified as both cost of goods sold and selling,general and administrative expenses(including depreciat
56、ion and amortization).6We believe that our business model has resulted in strong financial performance when considered in light of the economic environment:Our comparable sales increased by 2.8%in fiscal 2023,decreased by 2.0%in fiscal 2022,and increased by 30.3%in fiscal 2021.Comparable salesresult
57、s in fiscal 2021 were impacted by the COVID-19 pandemic.We expanded our store base from 1,190 stores at the end of fiscal year 2021 to 1,544 stores at the end of fiscal year 2023,representing acompounded annual growth rate of 13.9%.Between fiscal 2021 and 2023,our net sales increased from$2.8 billio
58、n to$3.6 billion,representing a compounded annual growth rate of 11.8%.Over the same period,our operating income increased from$379.9 million to$385.6 million,representing a compounded annual growth rate of0.7%.Our Competitive StrengthsWe believe the following strengths differentiate Five Below from
59、 competitors and are the key drivers of our success:Unique Focus on the Tween and Teen Customer.We target an attractive customer segment of tweens and teens with trend-right merchandise atdifferentiated price points.We have built our concept to appeal to this customer base,which we believe to be eco
60、nomically influential and resilientbased on our industry knowledge and experience,as well as their parents and others who shop for them.Our brand concept,merchandising strategyand store ambience work in concert to create an upbeat and vibrant retail experience that is designed to appeal to our targe
61、t audience,drive traffic toour stores and website,and keep our customers engaged throughout their visits.We monitor trends in the ever-changing tween and teen markets andare able to quickly identify and respond to trends.Our price points enable tweens and teens to shop independently,often using thei
62、r own money tomake frequent purchases of items geared primarily to them and to exercise self-expression through their independent retail purchases.Broad Assortment of Trend-Right,High-Quality Merchandise with Universal Appeal.We deliver an edited assortment of trend-right as well aseveryday products
63、 within each of our category worlds that changes frequently to create a sense of anticipation and freshness,which we believeprovides excitement for our customers.We have a broad range of vendors,most of which are domestically-based,which enables us to shortenresponse lead times,maximizes our speed t
64、o market and equips us to make more informed buying decisions.Our unique approach encouragesfrequent customer visits,and the breadth,depth and quality of our product mix and the diversity of our category worlds attract shoppers across abroad range of age and socio-economic demographics.Exceptional V
65、alue Proposition for Customers.We believe we offer a clear value proposition to our customers.Our price points,with mostproducts priced at$5 and below,resonate with our target demographic and with other value-oriented customers.We are able to deliver on this valueproposition through sourcing product
66、s in a manner that is designed to achieve low cost,fast response and high item velocity and sell-through.Wemaintain a dynamic and collaborative relationship with our vendor partners that provides us with favorable access to quality merchandise atattractive prices.We also have the ability to employ a
67、n opportunistic buying strategy,when appropriate,capitalizing on select excess inventoryopportunities with our vendors.This unique and flexible sourcing strategy allows us to offer high-quality products at exceptional value across all ofour category worlds.Differentiated Shopping Experience.We belie
68、ve we have created a unique and engaging in-store and online atmosphere that customers find funand exciting.While we refresh our products frequently,we maintain a floor layout,designed with an easy-to-navigate flow and featuring sightlinesacross the entire store enabling customers to easily identify
69、 our category worlds.All of our stores feature a sound system playing popular musicthroughout the shopping day.We employ novel and dynamic techniques to display our products,including distinctive merchandise fixtures andcolorful and stimulating signage.This approach makes our stores a destination,en
70、couraging hands-on interaction with our products and conveyingour value pricing.We have developed a unique culture that emanates from our crew,many of whom frequently shop at Five Below,to ourcustomers,thereby driving a higher level of connectivity and engagement.Additionally,we believe our price po
71、ints,coupled with our dynamicmerchandising approach,create an element of discovery,driving repeat visits and customer engagement.7Powerful and Consistent Store Economics.We have a proven store model that generates strong cash flow,consistent store-level financial resultsand a high-level return on in
72、vestment.Our stores have been successful in varying geographic regions,population densities and real estate settingsand our new stores have achieved average payback periods of less than one year.We believe our robust store model,reinforced by our rigorous siteselection process and in-store execution
73、,drives the strength and consistency of our comparable sales and financial results across all geographicregions and store-year classes.Highly Experienced and Passionate Senior Management Team with Proven Track Record.Our senior management team,led by Joel Anderson,our President and Chief Executive O
74、fficer,has extensive retail experience across a broad range of disciplines,including merchandising,real estate,finance,store operations,digital,supply chain management and information technology.Our management team drives our operating philosophy,which is based on a relentless focus on providing hig
75、h-quality merchandise at exceptional value and a superior shopping experience utilizing adisciplined,low-cost operating and sourcing structure.We believe our management team is integral to our success and has positioned us well forlong-term growth.Growth StrategyWe believe we can grow our net sales
76、and earnings by executing on the following strategies:Grow Our Store Base.We believe there is significant opportunity to expand our store base throughout the United States from 1,544 locations asof February 3,2024 to more than 3,500 locations within the United States over time.Based upon our strateg
77、y of store densification,we expect mostof our near-term growth will occur within our existing markets,as well as new markets.This strategy allows us to benefit from enhanced brandawareness and achieve operational efficiencies.We opened 150 new stores in fiscal 2022 and 204 net new stores in fiscal 2
78、023,and we plan to openbetween 225 and 235 new stores in fiscal 2024.Our new store model assumes approximately 9,500 square feet and is primarily in-line locationswithin power,community and lifestyle shopping centers across a variety of urban,suburban and semi-rural markets.We have a talented anddis
79、ciplined real estate management team and a rigorous real estate site selection process.We analyze the demographics of the surrounding tradeareas and the performance of adjacent retailers,as well as traffic and specific site characteristics and other variables.As of February 3,2024,wehave executed le
80、ase agreements for the opening of 137 new stores in fiscal 2024.Drive Comparable Sales.We expect to continue generating positive comparable sales growth by continuing to hone and refine our dynamicmerchandising offering and differentiated in-store shopping experience.We intend to increase our brand
81、awareness through cost-effectivemarketing efforts and enthusiastic customer engagement.We believe that executing on these strategies will increase the frequency of purchases byour existing customers and attract new customers to our stores.Increase Brand Awareness.We have a cost-effective marketing s
82、trategy designed to promote brand awareness and drive store and website traffic.Our strategy predominantly includes the use of digital marketing,streaming video,television,philanthropic and local community marketing tosupport existing and new market entries.We leverage our growing e-mail database,mo
83、bile website and social media presence to drive brandengagement and increased store visits within existing and new markets.We believe that our digital experience is an extension of our brand andretail stores,serving as a marketing and customer engagement tool for us.Our digital experience allows us
84、to continue to build brand awareness,grow online sales and expand our customer base.Enhance Operating Margins.We believe we have further opportunities to drive margin improvement over time.A primary driver of ourexpected margin expansion will come from leveraging our cost structure as we continue to
85、 increase our store base and drive our average net salesper store.We intend to capitalize on opportunities across our supply chain as we grow our business and achieve further economies of scale.Our HistoryThe Company was incorporated in Pennsylvania in January 2002 under the name of Cheap Holdings,I
86、nc.by David Schlessinger and Thomas Vellios,whorecognized a market need for a fun and affordable shopping destination aimed at our target customer.We changed our name to Five Below,Inc.in August 2002.InJuly 2014,Joel Anderson joined the Five Below senior management team,and he was appointed Chief Ex
87、ecutive Officer effective February 1,2015.8Our Market OpportunityAs a result of our unique merchandise offering and value proposition,we believe we have effectively tapped the tween and teen markets.According to the U.S.Census Bureau,there were over 62 million people in the United States between the
88、 ages of 5 and 19,which represented approximately 20%of the U.S.population asof April 1,2020.Based on managements experience and industry knowledge,we believe that this segment of the population has a significant amount of disposableincome as the vast majority of this age groups basic needs are alre
89、ady met.Our MerchandiseStrategyWe offer a dynamic,edited assortment of trend-right,high-quality products,with most priced at$5 or below,including select brands and licensed merchandise,targeted at the tween and teen customer.We believe we are transforming the shopping experience of our target demogr
90、aphic with a unique merchandising strategyand high-energy retail concept that our customers consider fun and exciting.Based on managements experience and industry knowledge,we believe our compellingvalue proposition and the dynamic nature of our merchandise offering has fostered universal appeal to
91、customers across a variety of age groups beyond our targetdemographic.Our typical store features in excess of 4,000 products across a number of our category worlds including Style,Room,Sports,Tech,Create,Party,Candy andNew&Now.We focus our merchandising strategy on maintaining core categories within
92、 our stores but aim to generate high item velocity and sell-through to keepour assortment fresh and drive repeat visits.We monitor trends in our target demographic market,historical sales trends of current and prior products and the successof new product launches to ensure that our merchandise is re
93、levant for our customers.We have a highly planned merchandise strategy focused on trend-right andeveryday products supplemented by selected opportunistic purchases from our vendors to drive traffic and therefore offer our customers a consistently excitingshopping experience.We believe we offer a com
94、pelling value proposition to our customers across all of our core product categories.The common element of our dynamicmerchandise selection is the consistent delivery of exceptional value to the consumer,with most products offered at or below the$5 price point.Our pricing enablesus to provide an ext
95、ensive range of exciting products,while maintaining the attraction of a value retailer.Many of the products we sell can also be found in mallspecialty stores,department stores,mass merchandisers and drug stores;however,we offer all of these products in an exciting and easy to shop retail environment
96、 atexceptional price points.Product MixWe organize the merchandise in our stores into the following category worlds:Style:Consists primarily of accessories such as novelty socks,sunglasses,jewelry,scarves,gloves,hair accessories,athletic tops and bottoms and“attitude”t-shirts.Our style offering also
97、 includes products such as nail polish,lip gloss,fragrance,and branded cosmetics.Room:Consists of items used to complete and personalize our customers living space,including trendy lamps,posters,frames,fleece blankets,plush items,pillows,candles,incense,lighting,novelty dcor,accent furniture and rel
98、ated items.We also offer storage options for the customersroom.Sports:Consists of an assortment of sport balls,team sports merchandise and fitness accessories,including hand weights,jump ropes and gymballs.We also offer a variety of games,including name brand board games,puzzles,collectibles and toy
99、s including remote control.In the summerseason,our sports offering also includes pool,beach and outdoor toys,games and accessories.Tech:Consists of a selection of accessories for cell phones,tablets,audio and computers.The offering includes cases,chargers,headphones andother related items.We also ca
100、rry a range of media products including books,video games and DVDs.Create:We offer an assortment of craft activity kits,as well as arts and crafts supplies such as crayons,markers and stickers.We also offer trend-right items for school such as backpacks,fashion notebooks and journals,novelty pens an
101、d pencils,locker accessories as well as everyday namebrand items.9Party:Consists of party goods,decorations,gag gifts and greeting cards,as well as every day and special occasion merchandise.Candy:Consists of branded items that appeal to tweens and teens.This category includes an assortment of class
102、ic and novelty candy bars andmovie-size box candy,seasonal-related candy as well as gum and snack food.We also sell chilled drinks via coolers.New&Now:Consists of seasonally specific items used to celebrate and decorate for events such as Christmas,Easter,Halloween and St.PatricksDay.These products
103、are most often placed at the front of the store.Set forth below is data for the following groups of products leisure,fashion and home,and snack and seasonal.The percentage of net sales represented byeach product group for each of the last three fiscal years was as follows:Percentage of Net Sales2023
104、20222021Leisure46.2%47.6%49.6%Fashion and home29.3%29.2%30.2%Snack and seasonal24.5%23.2%20.2%Total100.0%100.0%100.0%Leisure includes items such as sporting goods,games,toys,tech,books,electronic accessories,arts and crafts,and party.Fashion and home include items suchas personal accessories,“attitu
105、de”t-shirts,beauty offerings,home goods and storage options.Snack and seasonal include items such as seasonal goods,greetingcards,candy and other snacks,and beverages.Our StoresAs of February 3,2024,we operated 1,544 stores throughout the United States.Our new store model assumes a store size of app
106、roximately 9,500 square feet.Our stores are primarily located in power,community and lifestyle shopping centers;approximately 4%of our stores are located in malls.The following map showsthe number of stores in each of the states in which we operated and the locations of our shipcenters as of Februar
107、y 3,2024.10Store Design and LayoutWe present our products in a unique and engaging in-store atmosphere.We maintain a floor layout designed with an easy-to-navigate flow and featuringsightlines across the entire store enabling customers to easily identify our category worlds.All of our stores feature
108、 a sound system playing popular music throughoutthe shopping day.We employ novel and dynamic techniques to display our products,including distinctive merchandise fixtures and colorful and stimulating signage,which attract customers,encourage hands-on interaction with our products and convey our valu
109、e pricing.In addition to traditional perimeter and gondola shelving,racks and tables,we utilize innovative approaches such as wheelbarrows,oil drums and bins strategically placed throughout our stores.These techniques fostercustomer interaction with products,supporting the strong relationship we str
110、ive to develop with our customers and enhance our upbeat and vibrant shoppingenvironment.Each of our category worlds is strategically located within our stores in an effort to enhance the customers shopping experience.For example,our New&Nowofferings are located in the front of the store with the go
111、al of catching customers attention and being“top of mind,”and specially featured value items and other keyitems are positioned along the center aisle.Impulse items and“dollar value”items surround the checkout areas to capture add-on purchases.Expansion Opportunities and Site SelectionOur unique focu
112、s on the tween and teen customer is supported by our real estate strategy to locate stores in high-visibility locations.We seek to operate storesin high-visibility,high-traffic retail venues,which reinforce our brand message,heighten brand awareness and drive customer traffic.Our strategy is to dens
113、ify markets with clusters of stores because of the considerable benefit that stores derive from market concentration.Our store model isprofitable across a variety of urban,suburban and semi-rural markets and in multiple real estate venues including power,community and lifestyle shopping centers.Our
114、retail concept works well with a large and varied group of national co-tenants that drive customer traffic.We select store sites for new store openings based upon certain criteria including minimum population density requirements,availability of attractive leaseterms,sufficient space and strong posi
115、tioning within a center.Crew on our real estate team spend considerable time evaluating prospective sites before bringing aproposal to our real estate committee.Our real estate committee,which is composed of senior management including some of our executive officers,approves all ofour locations befo
116、re a lease is signed.We believe there is a significant opportunity to expand our store base in the United States.We opened 204 net new stores in fiscal 2023 and we plan to openbetween 225 and 235 new stores in fiscal 2024 through expansion in existing markets and by entering new markets.We maintain
117、a pipeline of real estate sites thathave been approved by our real estate committee and have executed 137 leases as of February 3,2024 for new stores in fiscal 2024.The actual number,location andtiming of new store openings in 2024 will depend on a number of factors,such as retail trends,competition
118、,the general economic environment and our ability to hireand retain new store managers and crew.Our recent store growth is summarized in the following table:PeriodStores atStart ofPeriodStoresOpenedStoresClosedNetStoreIncreaseStores atEnd ofPeriodFiscal 20211,0201711170 1,190Fiscal 20221,190150150 1
119、,340Fiscal 20231,3402051204 1,544Opening stores within existing markets enables Five Below to benefit from enhanced brand awareness and to achieve advertising,operating and distributionefficiencies.Our targeted new store openings include additional locations in existing markets as well as expansion
120、into new markets.In existing markets,we use astore densification strategy that promotes brand awareness and leverages marketing,operating and distribution costs.When entering new markets,we employ a storeclustering strategy,opening multiple stores in a single market on the same day,enabling us to le
121、verage marketing and pre-opening expenses and generate initial newmarket brand awareness.11Our store growth is supported by our new store economics,which we believe to be compelling.Our new store model assumes a store size of approximately9,500 square feet that achieves sales of approximately$2 mill
122、ion in the first full year of operation and an average new store cash investment of approximately$0.4million,including our store build-out(net of tenant allowances),inventory(net of payables)and cash pre-opening expenses.Our new store model targets an averagepayback period of less than one year on o
123、ur initial investment.Store OperationsEach of our stores is managed by a store manager and one or two assistant managers who oversee full-time and part-time crew within each store.Each storemanager is responsible for the day-to-day operations of his or her store,including the units operating results
124、,maintaining a clean and appealing store environmentand the hiring,training and development of crew.We also employ district managers who are responsible for overseeing the operations of 10 to 15 stores,on average,and regional directors who are responsible for overseeing the operations of our distric
125、t managers.We are guided by a philosophy that recognizes strong sales performance and customer service,allowing us to identify and reward crew who meet our high-performance standards.Store managers participate in a rewarding bonus incentive program.We also recognize individual performance through in
126、ternal promotionsand provide extensive opportunities for advancement.Our crew are critical to achieving our goals,and we strive to hire talented people with high energy levels and motivation.We have well-established storeoperating policies and procedures and an in-store training program for new stor
127、e managers,assistant managers and store associates.In addition,we have a dedicatedgroup of training and new store opening managers who are focused on ensuring a consistent new store opening and remodel process and who leverage their extensiveexperience and knowledge of Five Below to train new store
128、managers.Our customer service and store procedure training programs are designed to enable crew toassist customers in a friendly manner and to help create a positive sales-driven environment as well as teach successful operating practices and procedures.Merchandising,Sourcing and DistributionWe have
129、 developed a disciplined approach to buying and a dynamic inventory planning and allocation process to support our merchandising strategy.MerchandisingOur merchandising team consists of a Chief Merchandising Officer,who reports directly to our Chief Executive Officer,and is supported by an extensive
130、 teamof merchandising crew.Our merchandising team works directly with our product development team and our central planning and allocation group to ensure aconsistent delivery of products across our store base.Our Chief Merchandising Officer has over 30 years of experience within the retail sector.O
131、ur productdevelopment team works directly with our merchandising group to identify new and improved products through international sourcing and has significant experiencewithin the retail sector.SourcingWe believe we have strong sourcing capabilities developed through a dynamic and collaborative rel
132、ationship with our vendor partners that provide us withfavorable access to quality merchandise at attractive prices.We regularly purchase core merchandise in accordance with our key categories.We also have the abilityto employ an opportunistic buying strategy,when appropriate,capitalizing on selecte
133、d excess inventory opportunities,to purchase complementary merchandise basedon consumer trends,product availability and favorable economic terms.We work with approximately 1,000 vendors,with no single vendor representing more than 5%of our purchases in fiscal 2023.We sourced approximately 60%of our
134、purchases from domestic vendors in fiscal 2023.We typically have no long-term supply agreements or exclusive arrangements with our vendors.Distribution and FulfillmentWe distribute approximately 85%of our merchandise for our retail stores from our approximately 1,030,000 square foot shipcenter in In
135、dianapolis,Indiana,ourapproximately 1,000,000 square foot shipcenter in Pedricktown,New Jersey,our approximately 860,000 square foot shipcenter in Conroe,Texas,our approximately860,000 square foot shipcenter in Buckeye,Arizona and our approximately 700,000 square foot shipcenter in Forsyth,Georgia,w
136、ith the remaining merchandiseshipped directly from the vendor to our stores.We realize cost savings by working with our vendors to streamline and reduce packaging to diminish shipping costs.12For our direct-to-customer e-commerce business,we distribute our merchandise from our shipcenters in Buckeye
137、,Arizona and Indianapolis,Indiana.We generally ship merchandise from our shipcenters to our stores one to six times a week,depending on the season and the volume of a specific store.We useeither contract carriers or our own private fleet of trucks to ship merchandise to our stores.We continuously as
138、sess ways to maximize the productivity and efficiency of our existing distribution facilities and evaluate opportunities for additionalshipcenters.In March 2019,we completed the purchase of an approximately 700,000 square foot shipcenter in Forsyth,Georgia.The total amount paid for the land andbuild
139、ing was approximately$42 million.We began operating the shipcenter in April 2019 and will expand to approximately 1,000,000 square feet in the first half of2024.The total construction cost of the expansion is expected to be approximately$21 million.In August 2019,we acquired land in Conroe,Texas,to
140、build an approximately 860,000 square foot shipcenter.The total amount paid for the land and buildingwas approximately$56 million.We began operating the shipcenter in July 2020.In July 2020,we acquired land in Buckeye,Arizona,to build an approximately 860,000 square foot shipcenter.The total amount
141、paid for the land and buildingwas approximately$65 million.We began operating the shipcenter in August 2021 and will expand to approximately 1,200,000 square feet in the second half of2024.The total construction cost of the expansion is expected to be approximately$26 million.In March 2021,we acquir
142、ed land in Indianapolis,Indiana,to build an approximately 1,030,000 square foot shipcenter.The total amount paid for the land andbuilding was approximately$60 million.We began operating the shipcenter in June 2022.As a result of the significant expansion of our network of distribution facilities ove
143、r the last several years,including the opening of our Indianapolis,Indianashipcenter in June 2022,we ceased operations at our shipcenters in Olive Branch,Mississippi and Cincinnati,Ohio in the first half of fiscal 2022 as well as the e-commerce operations in our Pedricktown,New Jersey shipcenter in
144、the first half of fiscal 2023.Marketing and AdvertisingOur cost-effective marketing strategy is designed to promote brand awareness and drive store and website traffic with our target demographic,as well as othervalue-oriented customers.Our strategy includes highlighting our brand,exceptional value
145、and quality proposition predominantly through the use of digitaladvertising,commercials(on television and through streaming),affiliate marketing,social influencers,content creators,syndicated talk show integrations and localmarketing,with a focus on peak selling seasons.Additionally,we rely on the s
146、trong visibility and the presence of our store locations,email messaging andphilanthropic community fundraising to promote and further our brand image and drive traffic.Our digital experience,anchored by our mobile e-commerce website,app and social media presence is growing rapidly as we utilize Tik
147、Tok,Instagram,Facebook,YouTube and Snapchat to engage our customers with compelling digitalcontent on a frequent basis.Our marketing team,which reports into our Chief Merchandising Officer,works with our merchandising team to develop novel and dynamic techniques todisplay our products,including dist
148、inctive merchandise fixtures and colorful and stimulating signage,which attract customers,encourage hands-on interaction withour quality products and convey our value pricing.For new store openings,we seek to create community awareness and consumer excitement predominantly through digital advertisin
149、g,public relations,community outreach and events promoting the grand opening.We also aim to execute multiple store openings in a given new market on the same day in order toleverage marketing efforts to produce maximum impact.In addition to our marketing and advertising efforts described above,we al
150、so maintain an e-commerce website()and,over the last fewyears,our online following has grown substantially.We use both our website and social media channels to highlight our featured products,value/quality proposition,store locations,employment opportunities,and grand openings.CompetitionWe compete
151、with a broad range of retailers including discount,mass merchandise,grocery,drug,convenience,variety and other specialty stores with bothphysical locations and online stores.Many of these retail companies operate stores in many of the areas where we operate,and many of them engage in extensiveadvert
152、ising and marketing efforts.We also compete with online retailers who do not have traditional brick and mortar locations.13The principal basis upon which we compete is by offering a dynamic,edited assortment of trend-right products,with most priced at$5 and below and alsoinclusive of select brands a
153、nd licensed merchandise,targeted at the tweens,teens and beyond.We believe we are transforming the shopping experience of our targetdemographic with a unique merchandising strategy and high-energy retail concept that our customers consider fun and exciting.Our success also depends insubstantial part
154、 on our ability to respond quickly to trends so that we can meet the changing demands of our customers.We believe that we compare favorablyrelative to many of our competitors based on our merchandising strategy,edited product assortment targeted at tweens and teens,store environment,flexible realest
155、ate strategy and company culture.Nonetheless,certain of our competitors have greater financial,distribution,marketing and other resources than we do.Trademarks and Other Intellectual PropertyWe own several trademarks that have been registered with the U.S.Patent and Trademark Office,including Five B
156、elow,Five Beyond and Five Below HotStuff.Cool Prices.We also own domain names,including ,and unregistered copyrights in our website content.We attempt to obtain registrationof our trademarks whenever practicable and pursue any infringement of those marks.Solely for convenience,trademarks and trade n
157、ames referred to in thisdocument may appear without the or symbols,but such references are not intended to indicate,in any way,that we will not assert,to the fullest extent underapplicable law,our rights or the rights of the applicable licensor to these trademarks and trade names.We also refer to pr
158、oduct names,trademarks,trade names andservice marks that are the property of other companies.Management Information SystemsOur management information systems provide a full range of business process assistance and timely information to support our merchandising strategy,warehouse management,stores a
159、nd operating and financial teams.We believe our current systems provide us with operational efficiencies,scalability,managementcontrol and timely reporting that allow us to identify and respond to merchandising and operating trends in our business.We use a combination of internal andexternal resourc
160、es to support store point-of-sale,merchandise planning and buying,inventory management,financial reporting,real estate,human resource andadministrative functions.We continuously assess ways to maximize productivity and efficiency,and evaluate opportunities to further enhance our existing systems.Gov
161、ernment RegulationWe are subject to labor and employment laws,laws governing advertising,privacy laws,safety regulations and other laws,including consumer protectionregulations that regulate retailers and/or govern the promotion and sale of merchandise and the operation of stores and shipcenters.We
162、monitor changes in these lawsand believe that we are in material compliance with applicable laws.InsuranceWe maintain third-party insurance for a number of risk management activities including but not limited to workers compensation,cyber,directors&officers,general liability,property and crew-relate
163、d health care benefits.We evaluate our insurance requirements on an ongoing basis to ensure we maintain adequate levels ofcoverage.14Human CapitalOur Purpose,Beliefs and Core ValuesThe success and growth of Five Below is the direct result of our crew who embrace our purpose,our beliefs and our core
164、values.Why We Exist-Our Purpose-What We Believe-The Five Below Way-How We Behave-Our Five Core Values-Five Below believes life is better when customers arefree to Let Go and Have Fun in an amazingexperience filled with unlimited possibilities priced solow we make it easy to say YES!to the newest,coo
165、lest stuff!We are an Adopted Family.One who activelyparticipates and leans in to support each other and ourbusiness.In this family,we value every individual for theiruniqueness and potential.We know Five Below isstrongest when our teams reflect the diversity of thecommunities we serve and our crew m
166、embers canbring their whole authentic self to work,do what theydo best,feel that they truly belong and grow everysingle day.We live our purpose through five core values.Thesevalues guide all of our decisions and actions.Wow Our CustomersUnleash Your PassionHold the Penny HostageAchieve the Impossibl
167、eWork Hard,Have Fun and Build a CareerCrewAs of February 3,2024,we employed approximately 7,000 full-time and 15,000 part-time crew.Of our total crew,approximately 800 were corporate,approximately 1,000 were based at our shipcenters in Pedricktown,New Jersey,Forsyth,Georgia,Conroe,Texas,Buckeye,Ariz
168、ona,and Indianapolis,Indiana andapproximately 20,200 were store crew located in 43 states throughout the United States.The number of part-time crew fluctuates depending on seasonal needs.Noneof our crew belong to a union or are party to any collective bargaining or similar agreement.15Total RewardsW
169、e provide a comprehensive suite of benefits designed to help crew and their families stay healthy,meet their financial goals,protect their income and helpthem balance their work and personal lives.We provide competitive pay and significant career growth opportunities all within a culture that values
170、 diverseviewpoints and contributions at every level.Our available benefits also include the following:Health and WellnessMedical(with a choice of two high deductible plans and a traditional plan)Prescription drug coverage included with every medical planDental(with a choice of three plans)Vision pla
171、n(with a choice of two plans)Health savings account with Company matchPre-tax flexible spending account for qualified medical and dependent care expensesMental health support with medical benefits coverageCrew assistance program with supplemental mental health supportMedical option for part-time cre
172、wLife and DisabilityNo cost life and disability coverage provided for all full-time crewSupplemental life plan at option and cost of crew401(k)401(k)retirement savings option with safe harbor Company matchOtherIn-store crew discountEmployee Stock Purchase PlanPaid time off provided to all full-time
173、crewPaid parental leave provided to all full-time crewIdentification theft,pet insurance,legal services access,term life,as well as supplemental accident,hospital indemnity,andcritical illness coverage at option and cost of crewEmployment PracticesWe aim to provide challenging,meaningful and rewardi
174、ng opportunities for personal and professional growth of all crew and encourage all crew to bring theirunique backgrounds and experiences to the table to work together.In order to promote the desired work environment,we have adopted policies which describe thestandards of respect,inclusivity and pro
175、fessionalism expected of all crew.As an equal opportunity employer,we comply with all federal,state and local laws.This means that we make all employment decisions(such as who to recruit,hire,train,promote,transfer,and terminate,as well as compensation decisions)without considering an crews or appli
176、cants sex,race,religion,color,gender(including gender identity and gender expression),national origin,ancestry,physical or mental disability,medical condition,genetic information,marital status,registered domestic partner status,age,sexual orientation,military and veteran status or any other charact
177、eristic protected by federal,state or local law.We do not and will not tolerate harassment,discrimination,retaliation,and disrespectful or other unprofessional conduct against crew or any other coveredpersons based on any protected characteristic.We also prohibit discrimination,harassment,disrespect
178、ful or unprofessional conduct based on the perception thatanyone has any of those characteristics or is associated with a person who has or is perceived as having any of those characteristics.In addition,we will not retaliateagainst individuals who raise complaints of discrimination or harassment or
179、 who participate in workplace investigations or other protected activities.Furthermore,weare committed to maintaining a workplace free from sexual harassment and unwelcome conduct and recognizes sexual harassment as a form of workplacediscrimination.We promote and strive to maintain a safe and healt
180、hy work environment and conduct our business in ways that protect our crews safety and are sensitive to theenvironment.We are committed to maintaining a drug-free workplace and prohibit the manufacture,distribution,sale,purchase,transfer,possession,or use of illegalsubstances in the workplace,while
181、representing us outside the workplace or if such activity affects work performance or the work environment of the Company.16We encourage open,timely communications that help us achieve organizational goals,share information,increase understanding,participate in the decision-making process,enhance ou
182、r pride in the organization and provide recognition for our work-related successes.We believe our policies and practices are incompliance with all applicable laws and have been designed with significant inputs from the crew themselves.TurnoverRetention of our talented crew is an important focus for
183、us.We,therefore,monitor crew turnover,particularly at the store management and district managementlevels and employ various strategies to strive to improve our turnover rate.Crew EngagementWe engage our crew in a variety of ways,including:conducting an annual crew survey to directly engage with,and
184、collect feedback from our crew,maintaining an open-door policy for crew to report concerns,and providing an anonymous reporting hotline,available in multiple languages and managed by anindependent company not affiliated with us,to allow crew to voice concerns freely.The annual crew survey results he
185、lp us understand the crew experience,evaluate our performance,identify our strengths,and pinpoint opportunities forimprovement.Starting in fiscal 2020,we partnered with Gallup,Inc.,a global analytics and advisory firm,to monitor and improve the engagement of our workforce.We utilize the survey resul
186、ts to identify strengths and weaknesses and create action plans to improve engagement and,ultimately,team performance.In 2023 a high percentage of our crew participated in the survey,and the results demonstrated that our overall engagement levels exceed Gallups overallcompany averages in the United
187、States and worldwide.The results also reflected that we are a mission-driven company with crews response on our strength ofpurpose far exceeding Gallups measurement for world class.SeasonalityOur business is seasonal in nature with the highest level of net sales and net income generated in the fourt
188、h fiscal quarter due to the year-end holiday seasonand,therefore,operating results for any fiscal quarter are not necessarily indicative of results for the full fiscal year.To prepare for the holiday season,we must orderand keep in stock more merchandise than we carry during other parts of the year.
189、We expect inventory levels,along with an increase in accounts payable and accruedexpenses,generally to reach their highest levels in the third and fourth fiscal quarters in anticipation of the increased net sales during the year-end holiday season.Asa result of this seasonality,and generally because
190、 of variation in consumer spending habits,we experience fluctuations in net sales,net income and working capitalrequirements during the year.Available InformationFor more information about us,visit our website at .The contents of our website are not part of this Annual Report on Form 10-K.Ourelectro
191、nic filings with the Securities and Exchange Commission(including all annual reports on Form 10-K,quarterly reports on Form 10-Q,and current reports onForm 8-K,and any amendments to these reports),including the exhibits,are available,free of charge,through our website as soon as reasonably practicab
192、le after weelectronically file them with,or furnish them to,the Securities and Exchange Commission.17ITEM 1A.RISK FACTORSYou should carefully consider the following risks and uncertainties when reading this Annual Report.If any of the following risks actually occur,our business,financial condition a
193、nd/or results of operations could be materially and adversely affected.In that event,the trading price of our common stock could decline.Although we believe that we have identified and discussed below the key risk factors affecting our business,there may be additional risks and uncertainties that ar
194、enot presently known to us or that we currently deem to be immaterial that may materially adversely affect our business,financial condition and/or results ofoperations.Risks Relating to Our Business and IndustryInflation and rising commodity prices could adversely affect our business.Our financial p
195、erformance could be adversely impacted by inflation,which is subject to market conditions.Inflationary pressures on the products we sell couldimpact our net sales and earnings.If the cost of goods changes as a result of inflation,we may be unable to adjust our retail prices accordingly,which could a
196、dverselyimpact our sales or earnings.During fiscal 2022,we experienced levels of inflation that are higher than we have experienced in recent years,resulting in part fromvarious supply disruptions,increased shipping and transportation costs,increased commodity costs,increased labor costs in the supp
197、ly chain,monetary policyactions,and other disruptions caused by the uncertain economic environment.While we have been able to mitigate this impact to date through our pricing strategies,we are unable to predict how long the current inflationary environment will continue or the impact of inflationary
198、 trends on consumer behavior and our sales andprofitability in the future.Additionally,commodities can be subject to availability constraints and price volatility caused by weather,supply conditions,politicalinstability,government regulations,tariffs,energy prices and general economic conditions and
199、 other unpredictable factors.Changes in commodity prices could alsonegatively impact our sales and earnings if our competitors react more aggressively.We may not be able to successfully implement our growth strategy on a timely basis or at all,which could harm our growth and results of operations.Ou
200、r growth is dependent on our ability to open profitable new stores.We believe we have an opportunity to continue to grow our store base from 1,544 storesin 43 states as of February 3,2024 to more than 3,500 locations over time.Our ability to open profitable new stores depends on many factors,includi
201、ng our ability to:identify suitable markets and sites for new stores;negotiate leases with acceptable terms;achieve brand awareness in the new markets;efficiently source and distribute additional merchandise;expand our distribution capacity by successfully opening and operating new shipcenters;maint
202、ain adequate distribution capacity,information systems and other operational system capabilities;hire,train and retain store management and other qualified crew;andachieve sufficient levels of cash flow and financing to support our expansion.Unavailability of attractive store locations,delays in the
203、 acquisition or opening of new stores,delays or costs resulting from a decrease in commercialdevelopment due to landlord capital constraints,difficulties in staffing and operating new store locations or lack of customer acceptance of stores in new market areasmay negatively impact our new store grow
204、th and the costs or the profitability associated with new stores.Additionally,some of our new stores may be located in areas where we have little experience or a lack of brand recognition.Those markets may have differentcompetitive conditions,market conditions,consumer tastes and discretionary spend
205、ing patterns than our existing markets,which may cause these new stores to beless successful than stores in our existing markets.Other new stores may be located in areas where we have existing stores.Although we have experience in thesemarkets,increasing the number of locations in these markets may
206、result in inadvertent over-saturation of markets and temporarily or permanently divert customersand sales from our existing stores,thereby adversely affecting our overall financial performance.18Accordingly,we cannot guarantee that we will achieve our planned growth or,even if we are able to grow ou
207、r store base as planned,that any new stores willperform as planned.If we fail to successfully implement our growth strategy,we will not be able to sustain the rapid growth in sales and profits that we expect,whichwould likely have an adverse impact on the price of our common stock.Any disruption in
208、our ability to select,obtain,distribute and market merchandise attractive to customers at prices that allow us to profitably sell suchmerchandise could impact our business negatively.We generally have been able to select and obtain sufficient quantities of attractive merchandise at prices that allow
209、 us to be profitable.If we are unable tocontinue to select products that are attractive to our customers,to obtain such products at costs that allow us to sell such products at a profit,or to market suchproducts effectively to consumers,our sales or profitability could be affected adversely.In addit
210、ion,the success of our business depends in part on our ability toanticipate,identify and respond promptly to evolving trends in demographics and consumer preferences,expectations and needs.If we are unable to quickly respondto developing trends or if the spending patterns or demographics of these ma
211、rkets change,and we do not timely and appropriately respond to such changes,then thedemand for our products,which are discretionary,and our market share could be adversely affected.Failure to maintain attractive stores and to timely identify oreffectively respond to changing consumer needs,preferenc
212、es and spending patterns could adversely affect our relationship with customers,the demand for ourproducts and our market share.Any disruption in the supply or increase in pricing of our merchandise could negatively impact our ability to achieve anticipated operating results.The productswe sell are
213、sourced from a wide variety of domestic and international vendors.We have not experienced any difficulty in obtaining sufficient quantities of coremerchandise and believe that,if one or more of our current sources of supply become unavailable,we would generally be able to obtain alternative sources
214、withoutexperiencing a substantial disruption of our business.However,such alternative sources could increase our merchandise costs and reduce the quality of ourmerchandise,and an inability to obtain alternative sources could affect our sales.Our reliance on merchandise manufactured outside of the Un
215、ited States subjects us to legal,regulatory,political and economic risks.In particular,tariffsimposed by the U.S.government could increase the cost to us of certain products,lower our margins,increase our import related expenses,cause us to increaseour prices to consumers,and reduce consumer spendin
216、g on discretionary items,each of which could have a material adverse effect on our business,financialcondition and results of future operations.A significant majority of our merchandise is manufactured outside of the United States,and changes in the prices and flow of these goods for any reason coul
217、dhave an adverse impact on our operations.The United States and other countries have occasionally proposed and enacted protectionist trade policies,which mayresult in changes in tariff structures and trade policies and restrictions that could increase the cost or reduce the availability of certain m
218、erchandise.For example,in2018 and 2019 the United States imposed increased tariffs on certain imports from China(up to 30%),and the then-President of the United States,at one point,directed United States companies to immediately begin to look for alternatives to China and suggested he had the author
219、ity to order United States companies to ceaseproduction in,and importation from,China.Although a partial trade deal has been reached between the United States and China,the trade issues between thesecountries are not fully resolved.The trade issues between the United States and China may continue to
220、 be volatile and difficult to predict or forecast.Increased tariffs as well as any newly imposed tariffs on items imported from China or elsewhere would likely result in lower gross margins on impactedproducts,unless we are able to successfully take any one or more of the following mitigating action
221、s:negotiate lower product costs with our vendors,purchaseproducts produced in countries with no or lower tariffs or transition away from domestic vendors who source from China or other tariff impacted countries,increaseour prices,or alter or cease offering certain products.Any increase in pricing,al
222、teration of products or reduced product offering could reduce the competitiveness ofour products.Furthermore,any retaliatory countermeasures imposed by countries subject to such tariffs,such as China,could increase our,or our vendors,importexpenses.Additionally,even if the products we import are not
223、 directly impacted by additional tariffs,the imposition of such additional tariffs on goods imported intothe United States could cause increased prices for consumer goods in general,which could have a negative impact on consumer spending for discretionary itemsreducing demand for our products.These
224、direct and indirect impacts of increased tariffs or trade restrictions implemented by the United States,both individually andcumulatively,could have a material adverse effect on our business,financial condition and results of future operations.It has also been suggested that the United States may ma
225、terially modify or withdraw from some of its existing trade agreements.Any of these or other measures,if ultimately enacted,or events relating to the manufacturers of our merchandise and the countries in which they are located,some or all of which are beyond ourcontrol,could adversely affect our abi
226、lity to access suitable merchandise on acceptable terms,negatively impact our operations,increase costs and lower our margins.Such events or circumstances include,but are not limited to:19 political and economic instability;the financial instability and labor problems of the manufacturers of our mer
227、chandise;the availability and cost of raw materials;merchandise quality or safety issues;changes in currency exchange rates;the regulatory environment in the countries in which the manufacturers of our merchandise are located;work stoppages or other employee rights issues;inflation or deflation;and
228、transportation availability,costs and disruptions.Moreover,negative press or reports about products manufactured outside the United States may sway public opinion,and thus customer confidence,away fromthe products sold in our stores.These and other factors affecting the manufacturers of our merchand
229、ise who are located outside of the United States and our access toour products could adversely affect our financial performance.We have implemented price increases in an effort to mitigate current and future cost increases.These or future price increases could reduce our unit sales,damage our reputa
230、tion with our customers as an extreme value retailer,or cause us to become less competitive in the marketplace,each of which could have amaterial adverse effect on our business,financial condition and results of future operations.We,like many retailers,are and may in the future be subject to increas
231、ing operational costs,including escalating product costs,the imposition of tariffs onimported goods,and higher wage and benefits costs in response to legislative requirements and competitive pressures.In fiscal 2019,we implemented price increases(including beyond$5 per item)in an effort to mitigate
232、some or all of the risks of such operational cost increases.We can offer no assurances that price increases willbe accepted by our customers,or that price increases will be sufficient to offset the impact of future cost increases.In addition,any increase in our prices may causeour unit sales to decl
233、ine and could undermine our positioning as an extreme value retailer making us less attractive to our customers and less competitive in themarketplace.Accordingly,such factors could have a material adverse effect on our business,financial condition and results of future operations.Our sales depend o
234、n a volume of traffic to our stores,and a reduction in traffic to,or the closing of,anchor tenants and other destination retailers in theshopping centers in which our stores are located could significantly reduce our sales and leave us with excess inventory.Most of our stores are located in power,co
235、mmunity and lifestyle shopping centers that benefit from the ability of“anchor”retail tenants,generally big boxstores,and other destination retailers and attractions to generate sufficient levels of consumer traffic in the vicinity of our stores.Any decline in the volume ofconsumer traffic at shoppi
236、ng centers,whether because of consumer preferences to shop on the internet or at large warehouse stores,an economic slowdown,a declinein the popularity of shopping centers,the closing of anchor stores or other destination retailers or otherwise,could result in reduced sales at our stores and leave u
237、swith excess inventory,which could have a material adverse effect on our financial results or business.20Our new store growth is dependent upon our ability to successfully expand our distribution network capacity,and failure to achieve or sustain these plans couldaffect our performance adversely.We
238、maintain shipcenters in Pedricktown,New Jersey,Forsyth,Georgia,Conroe,Texas,Buckeye,Arizona,Indianapolis and Indiana.We continuously assessways to maximize the productivity and efficiency of our existing distribution facilities and evaluate opportunities for additional shipcenters.In March 2019,weco
239、mpleted the purchase of an approximately 700,000 square foot shipcenter in Forsyth,Georgia,which we began operating in April 2019,and will expand toapproximately 1,000,000 square feet in the first half of 2024.In August 2019,we acquired land in Conroe,Texas to building an approximately 860,000 squar
240、e footshipcenter,which we began operating in July 2020.In July 2020,we acquired land in Buckeye,Arizona,to build an approximately 860,000 square foot shipcenter,which we began operating in August 2021,and will expand to approximately 1,200,000 square feet in the second half of 2024.In March 2021,we
241、acquired land inIndianapolis,Indiana,to build an approximately 1,030,000 square foot shipcenter,which we began operating in June 2022.As a result of the significant expansion ofour network of distribution facilities over the last several years,including the opening of our Indianapolis,Indiana shipce
242、nter in June 2022,we ceased operations atour shipcenters in Olive Branch,Mississippi and Cincinnati,Ohio in the first half of fiscal 2022 as well as the e-commerce operations in our Pedricktown,NewJersey shipcenter in the first half of fiscal 2023.Delays in opening the planned new shipcenters could
243、adversely affect our future operations by slowing store growth,which could in turn reduce sales growth.In addition,any distribution-related construction or expansion projects entail risks which could cause delays and costoverruns,such as:shortages of materials;shortages of skilled labor or work stop
244、pages;unforeseen construction,scheduling,engineering,environmental or geologicalproblems;weather interference;fires or other casualty losses;and unanticipated cost increases.The completion date and ultimate cost of future projects,includingopening the planned new shipcenters could differ significant
245、ly from initial expectations due to construction-related or other reasons.We cannot guarantee that anyproject will be completed on time or within established budgets.In addition,the fixed costs associated with owning,operating and maintaining our shipcenters during a period of economic weakness or d
246、eclining sales canresult in lower operating efficiencies,financial deleverage and potential impairment in the recorded value of distribution assets.This fixed cost structure mayadversely affect profitability if sales volumes decline for an extended period of time and could have material adverse effe
247、cts on our financial condition,results ofoperations or cash flow.Furthermore,our shipcenters in Forsyth,Georgia,Conroe,Texas,Buckeye,Arizona and Indianapolis,Indiana subject us to the risks of owning real property,which include,but are not limited to:the possibility of environmental contamination an
248、d the costs associated with remediating any environmental problems;adverse changes in the value of this property,and any future properties we may own,due to interest rate changes,changes in the neighborhood inwhich the property is located,or other factors;the possible need for structural improvement
249、s in order to comply with zoning,seismic and other legal or regulatory requirements;the potential disruption of our business and operations arising from or connected with a relocation due to moving to or renovating the facility;increased cash commitments for improvements to the building or the prope
250、rty,or both;increased operating expenses for the buildings or the property,or both;andthe risk of financial loss in excess of amounts covered by insurance,or uninsured risks,such as the loss caused by damage to the buildings as aresult of earthquakes,floods and/or other natural disasters.21A signifi
251、cant disruption to our distribution network or to the timely receipt of inventory could adversely impact sales or increase our transportation costs,whichwould decrease our profits.Because most of our products are distributed from our shipcenters,the unexpected loss of any one of our shipcenters,due
252、to natural disaster or otherwise,wouldmaterially affect our operations.We also rely upon independent third-party transportation to provide goods to our stores in a timely and cost-effective manner,through deliveries to our shipcenters from vendors and then from the shipcenters or direct ship vendors
253、 to our stores.Our use of outside delivery services forshipments is subject to risks outside of our control and any disruption,unanticipated expense or operational failure related to this process could affect store operationsnegatively.Unexpected delivery delays or increases in transportation costs(
254、including through increased fuel costs or a decrease in transportation capacity foroverseas shipments or resulting from labor shortages or work stoppages)could significantly decrease our ability to generate sales and earn profits.If we changeshipping companies,we could face logistical difficulties t
255、hat could adversely impact deliveries and we would incur costs and expend resources in connection withsuch change.Moreover,we may not be able to obtain terms as favorable as those received from the independent third-party transportation providers we currently use,which would increase our costs.Addit
256、ionally,long-term disruptions to the United States and international transportation infrastructure from wars,political unrest,terrorism,natural disasters,governmental budget constraints and other significant events that could lead to delays or interruptions of service could adversely affectour busin
257、ess.As we seek to expand our operation through the implementation of our online retail capabilities,we may face increased or unexpected demands onshipcenter operations,as well as new demands on our distribution network.Extreme weather conditions common to areas in which many of our stores are locate
258、d could negatively affect our business and results of operations,particularlyas such extreme conditions occur during what is typically our most profitable quarter.Extreme weather conditions in the areas in which our stores are located could negatively affect our business and results of operations.We
259、 have a significantnumber of stores in the Northeastern and Midwestern regions of the United States,which are prone to inclement weather conditions,as well as severe storms.Suchinclement weather could have a significant impact on consumer behavior,travel and store traffic patterns,as well as our abi
260、lity to operate our stores.For example,frequent or unusually heavy snowfall,ice storms,rainstorms or other extreme weather conditions over a prolonged period could make it difficult for our customers totravel to our stores and thereby reduce our sales and profitability.In addition,we typically gener
261、ate higher revenues and gross margins during our fourth fiscalquarter,which includes the year-end holiday season.If weather conditions are not favorable during these periods,our operating results and cash flow from operationscould be adversely affected.22A significant disruption in our information t
262、echnology systems and our inability to adequately maintain and update those systems could adversely affect ouroperations and negatively affect our customers.We rely extensively on our information technology systems(which includes certain systems currently outsourced to,or using cloud-based services
263、provided by,third parties)throughout our business.We also rely on continued and unimpeded access to the internet to use our information technology systems.Our systems aresubject to damage or interruption from power outages,telecommunications failures,computer viruses,malicious attacks,security breac
264、hes,catastrophic events,andimplementation errors.If our systems are damaged,disrupted or fail to function properly or reliably,we may incur substantial repair or replacement costs,experiencedata loss or theft and impediments to our ability to manage inventories or process customer transactions,and e
265、ncounter lost customer confidence,which could requireadditional promotional activities to attract customers and otherwise adversely affect our results of operations.We continually invest to maintain and update ourinformation technology systems.Implementing significant system changes increases the ri
266、sk of system disruption.The potential problems and interruptionsassociated with implementing technology initiatives,as well as providing training and support for those initiatives,could disrupt or reduce our operational efficiency,and could negatively impact customer experience and customer confiden
267、ce.If we are unable to secure our customers confidential or credit card information,or other private data relating to our crew or our Company,we could be subjectto negative publicity,costly government enforcement actions or private litigation,which could damage our business reputation and adversely
268、affect our financialresults.As with other companies,we are periodically subject to cyberattacks.Cyberattacks and other cyber incidents are occurring more frequently including as a resultof ongoing military conflicts,certain U.S.foreign relations,and remote work arrangements,are constantly evolving i
269、n nature,are becoming more sophisticated andare being made by groups and individuals(including criminal hackers,hacktivists,state-sponsored institutions,terrorist organizations and individuals or groupsparticipating in organized crime)with a wide range of expertise and motives(including monetization
270、 of corporate,payment or other internal or personal data,theft oftrade secrets and intellectual property for competitive advantage and leverage for political,social,economic and environmental reasons).Such cyberattacks and cyberincidents can take many forms including cyber extortion,denial of servic
271、e,social engineering,such as impersonation attempts to fraudulently induce crew or othersto disclose information or unwittingly provide access to systems or data,introduction of viruses or malware,such as ransomware through phishing emails,websitedefacement or theft of passwords and other credential
272、s.Although we may incur significant costs in protecting against or remediating cyberattacks or other cyberincidents,no cyberattack or other cyber incident has,to our knowledge,had a material adverse effect on our business,financial condition or results of operations todate.The protection of our cust
273、omer,crew and company data is critical to us.The regulatory environment surrounding information security and privacy isincreasingly demanding,with the frequent imposition of new and constantly changing requirements that affect our business.In addition,customers have a highexpectation that we will ad
274、equately protect their personal information from cyberattack or other security breaches.We have procedures and technology in placedesigned to safeguard our customers debit and credit card and other personal information,our crews private data and company records,intellectual property andother confide
275、ntial information,and we continue to devote significant resources to network security,backup and disaster recovery,and other security measures,including training,to protect our systems and data.Nevertheless,these security measures cannot provide absolute security or guarantee that we will be success
276、ful inpreventing or responding to every such breach or disruption,including through the intentional or negligent actions of our crew,business associates or third parties.Asa result,unauthorized parties may obtain access to our data systems and misappropriate customer data and company confidential in
277、formation.There can be no assurance that advances in computer capabilities,new discoveries in the field of cryptography or other developments will prevent thecompromise of our customer transaction processing capabilities and personal data.Furthermore,because the techniques used to obtain unauthorize
278、d access,disable ordegrade service,or sabotage systems change frequently and often are not recognized until launched against a target,we may be unable to anticipate these techniquesor to implement adequate preventative measures.If any such compromise of our security or the security of information re
279、siding with our business associates or thirdparties were to occur,we could be exposed to negative publicity,government enforcement actions,card issuer fines and/or penalties,private litigation or costlyresponse measures.In addition,our reputation within the business community and with our customers
280、may be affected,which could result in our customersdiscontinuing the use of debit or credit cards in our stores,or not shopping in our stores altogether.This could cause us to lose market share to our competitors andcould have an adverse effect on our financial results.We use,and may over time incre
281、ase the usage of,machine learning and other types of artificial intelligence in our business,and challenges with properlymanaging its use could adversely affect our business.23Like many businesses,we utilize machine learning and other types of artificial intelligence(collectively,“AI”)and advancemen
282、ts in technology may allow usto expand the use of AI,including generative AI,into key operational and/or administrative aspects of our business with the result that applications of AI may becomeimportant in our operations over time.Our competitors or other third parties may incorporate AI into their
283、 businesses more quickly or more successfully than us,which could impair our ability to compete effectively and adversely affect our results of operations.Additionally,if the types of information that AI applicationsassist in producing are or are alleged to be deficient,inaccurate,or biased,our busi
284、ness,financial condition,and results of operations may be adversely affected.Therapid evolution of AI,including potential government regulation of AI,may require significant resources to develop,test and maintain our implementations of AI.We are subject to customer payment-related risks that could i
285、ncrease operating costs or exposure to fraud or theft,subject us to potential liability and potentiallydisrupt our business.We accept payments using a variety of methods,including cash,credit and debit cards and gift cards.Acceptance of these payment options subjects us to rules,regulations,contract
286、ual obligations and compliance requirements,including payment network rules and operating guidelines,data security standards and certificationrequirements,and rules governing electronic funds transfers.Any inability to comply with such requirements may subject us to increased risk of liability forfr
287、audulent transactions and may adversely affect our business and operating results.For certain payment methods,including credit and debit cards,we pay interchange and other fees,which may increase over time and raise our operating costs.We rely on third parties to provide payment processing services,
288、including the processing of credit cards,debit cards,and other forms of electronic payment.If thesecompanies become unable to provide these services to us,or if their systems are compromised,it could potentially disrupt our business.The payment methods thatwe offer also subject us to potential fraud
289、 and theft by criminals,who are becoming increasingly more sophisticated,seeking to obtain unauthorized access to orexploit weaknesses that may exist in the payment systems.If we fail to comply with applicable rules or requirements for the payment methods we accept,or ifpayment-related data is compr
290、omised due to a breach or misuse of data,we may be liable for costs incurred by payment card issuing banks and other third parties orsubject to fines and higher transaction fees,or our ability to accept or facilitate certain types of payments may be impaired.In addition,our customers could loseconfi
291、dence in certain payment types,which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs.As a result,our business and operating results could be adversely affected.Our growth from existing stores is dependent upon our ability to in
292、crease sales and improve the efficiencies,costs and effectiveness of our operations,and failureto achieve or sustain these plans could affect our performance adversely.Increases in sales in existing stores are dependent on factors such as competition,including from online retailers,merchandise selec
293、tion,store operations andcustomer satisfaction.If we fail to realize our goals of successfully managing our store operations and increasing our customer retention and recruitment levels,oursales may not increase,and our growth may be impacted adversely.Our success depends on our executive officers,s
294、enior management,district,store,and shipcenter managers,and other key personnel.If we lose our executiveofficers,senior management,district,store,and shipcenter managers,or any other key personnel,or are unable to hire additional qualified personnel,ourbusiness could be harmed.Our future success dep
295、ends to a significant degree on the skills,experience and efforts of our executive officers,senior management,district,store,andshipcenter managers,and other key personnel,including Joel Anderson,our President and Chief Executive Officer.The loss of the services of any of our executiveofficers,senio
296、r management,district,store,and shipcenter managers,or other key personnel could have an adverse effect on our operations.Competition for skilledand experienced management in the retail industry is intense,and our future success will also depend on our ability to attract,retain and motivate qualifie
297、d personnel,as a failure to attract these key personnel could have an adverse effect on our operations.We do not currently maintain key person life insurance policies with respectto our executive officers or key personnel.24Our profitability and cash flows from operations may be negatively affected
298、if we are not successful in managing our inventory balances and inventoryshrinkage.Our inventory balance represented approximately 15%of our total assets as of February 3,2024.Efficient inventory management is a key component of ourbusiness success and profitability.To be successful,we must maintain
299、 sufficient inventory levels and an appropriate product mix to meet our customers demandswithout allowing those levels to increase to such an extent that the costs to store and hold the goods unduly impacts our financial results.If our buying decisions donot accurately predict customer trends or pur
300、chasing actions,or if our expectations about customer spending levels are inaccurate,we may have to take unanticipatedmarkdowns to dispose of excess inventory,which also can adversely impact our financial results.We have historically experienced loss of inventory(also called“inventory shrink”,“shrin
301、k”,or shrinkage)due to damage,theft,and other causes and have recently seen inventory shrink reach higher than historic levels.Although we are making every effort to minimize inventory shrinkage,we cannot assure you that incidences of inventory loss and theft will decrease in the future,orthat the m
302、easures we are taking will effectively address the problem.We continue to focus on ways to reduce these risks,but we cannot assure you that we will besuccessful in our inventory management.If we are not successful in managing our inventory balances,our profitability and cash flows from operations ma
303、y benegatively affected.Our business requires that we lease substantial amounts of space and there can be no assurance that we will be able to continue to lease space on terms asfavorable as the leases negotiated in the past.Currently,we lease all of our store locations,as well as our corporate head
304、quarters and distribution facilities in Pedricktown,New Jersey(and own ourshipcenters in Forsyth,Georgia,Conroe,Texas,Buckeye,Arizona and Indianapolis,Indiana).As a result of the significant expansion of our network of distributionfacilities over the last several years,including the opening of our I
305、ndianapolis,Indiana shipcenter in June 2022,we ceased operations at our shipcenters in OliveBranch,Mississippi and Cincinnati,Ohio in the first half of fiscal 2022.Our stores are leased from third parties,with typical initial lease terms of ten years.Many ofour lease agreements also have additional
306、five-year renewal options.Historically,we have been able to negotiate terms that fit within our economic model and thatwe believe are favorable;however,there is no guarantee that we will be able to continue to negotiate such terms.Consolidation in the commercial retail real estatemarket could affect
307、 our ability to successfully negotiate favorable rental terms for our stores in the future.Should significant consolidation occur,a large proportionof our store base could be concentrated with one or a few landlords that would then be in a position to dictate unfavorable terms to us due to their sig
308、nificantnegotiating leverage.Many of our lease agreements have defined escalating rent provisions over the initial term and any extensions.Increases in our occupancy costsand difficulty in identifying economically suitable new store locations could have significant negative consequences,which includ
309、e:requiring that a greater portion of our available cash be applied to pay our rental obligations,thus reducing cash available for other purposes andreducing our profitability;increasing our vulnerability to general adverse economic and industry conditions;andlimiting our flexibility in planning for
310、,or reacting to changes in,our business or in the industry in which we compete.We depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs.If our business does not generate sufficient cash flowfrom operating activities to fund these expenses and needs and suf
311、ficient funds are not otherwise available to us,we may not be able to service our lease expenses,grow our business,respond to competitive challenges or fund our other liquidity and capital needs,which could harm our business.If an existing or future store is notprofitable,and we decide to close it,w
312、e may nonetheless be committed to perform our obligations under the applicable lease including,among other things,payingthe base rent for the balance of the lease term.Moreover,even if a lease has an early cancellation clause,we may not satisfy the contractual requirements for earlycancellation unde
313、r that lease.In addition,if we are not able to enter into new leases or renew existing leases on terms acceptable to us,this could have an adverseeffect on our results of operations.25Operational difficulties,including those associated with our ability to either lease or build and operate our shipce
314、nters,could adversely impact our business.We maintain a network of shipcenters and are planning to lease or build new shipcenters in the future to support our growth objectives.Delays in opening thesenew shipcenters could adversely affect our future financial performance by slowing store growth,whic
315、h may in turn reduce revenue growth,or by increasingtransportation costs.In addition,shipcenter-related construction entails risks that could cause delays and cost overruns,such as:shortages of materials or skilledlabor;work stoppages;unforeseen construction,scheduling,engineering,environmental or g
316、eological problems,weather interference;fires or other casualty losses;and unanticipated cost increases.The completion date and ultimate cost of these projects could differ significantly from initial expectations due to construction-related or other reasons.We cannot guarantee that these shipcenters
317、 or any future operational projects will be completed on time or within established budgets.Additionally,potential ownership of these facilities and of additional facilities which we may lease,acquire,build and own in the future,entails risks of our ability tocomply with regulations restricting the
318、construction and operation of these facilities,as well as local community actions opposed to the location of our facilities atspecific sites and the adoption of local laws restricting our operations and environmental regulations,which may impact our ability to find suitable locations,andincrease the
319、 cost of sites and of constructing,leasing and operating our facilities.We also may have difficulty negotiating real estate purchase agreements or leases onacceptable terms.Failure to manage these and other similar factors effectively may affect our ability to timely build or lease new facilities,wh
320、ich could have amaterial adverse effect on our future growth and profitability.We operate in a competitive environment and,as a result,we may not be able to compete effectively or maintain or increase our sales,market shares or margins.We operate in a highly competitive retail environment with numer
321、ous competitors,including online retailers,some of which have greater resources or betterbrand recognition than we do.We compete with respect to customers,price,store location,merchandise quality and supply,assortment and presentation,in-stockconsistency,customer service and crew.This competitive en
322、vironment subjects us to various risks,including the ability to provide quality,trend-right merchandise toour customers at competitive prices that allow us to maintain our profitability.Because of our low-price model,we may have limited ability to increase prices inresponse to increased costs withou
323、t losing competitive position which may adversely affect our margins and financial performance.In addition,price reductions byour competitors may result in the reduction of our prices and a corresponding reduction in our profitability.Accordingly,we may face periods of intense competitionin the futu
324、re,which could have a material adverse effect on our profitability and results of operations.Consolidation among retailers,changes in pricing of merchandise or offerings of other services by competitors could have a negative impact on the relativeattractiveness of our stores to consumers.We do not p
325、ossess exclusive rights to many of the elements that comprise our in-store experience and product offerings.Our competitors may seek to copy our business strategy and in-store experience,which could result in a reduction of any competitive advantage or special appeal thatwe might possess.In addition
326、,most of our products are sold to us on a non-exclusive basis.As a result,our current and future competitors may be able to duplicate orimprove on some or all of our in-store experience or product offerings that we believe are important in differentiating our stores and our customers shoppingexperie
327、nce.If our competitors were to duplicate or improve on some or all of our in-store experience or product offerings,our competitive position and our businesscould suffer.Our ability to provide quality,trend-right products at attractive,competitive prices could be impacted by various actions of our co
328、mpetitors that arebeyond our control.Our business is seasonal,and adverse events during the holiday season could have a substantial negative impact on our operating results.Our business is seasonal,with the highest percentage of sales(approximately 40%of total annual sales over the last two fiscal y
329、ears)occurring during thefourth fiscal quarter(November,December and January),which includes the year-end holiday season.This increased percentage of net sales has historically resultedin the highest percentages of net income during the fourth fiscal quarter.We purchase substantial amounts of invent
330、ory in the end of the third fiscal quarter(October)and beginning of the fourth fiscal quarter(November and December)and incur higher shipping costs and higher payroll costs in anticipation of the increased salesactivity during these time periods.Adverse events,such as inclement or unusual weather,de
331、teriorating economic conditions,higher unemployment,increased wagerates,higher gas prices or public transportation disruptions,could result in lower-than-planned sales during the holiday season which may lead to unanticipatedmarkdowns.Since we rely on third parties for transportation and use third-p
332、arty warehouses when we build up inventory,a number of these factors are outside of ourcontrol.Our holiday sales are also materially impacted by the length of the holiday selling season.In years where the selling season is shorter than typical due to thetiming of the major holidays,our retail sales
333、could be negatively impacted.In addition,the occurrence of any other operational disruptions during a shorter holidayperiod could have a heightened negative impact.An unsuccessful fourth quarter,or holiday season,will have a substantial negative impact on our financial conditionand results of operations for the entire fiscal year.26We may not be successful in our continued expansion into online re
0731-84720580
sgpjbg002
工作日 9:30 - 18:00
研報
新質生產力
DeepSeek?
低空經濟
大模型
AI Agent
AI Infra
具身智能
自動駕駛
寵物
銀發經濟
人形機器人
企業出海
算力
微短劇
薪酬
白皮書
創新藥
人工智能
AI產業
信息科技
互聯網
消費經濟
汽車交通
電商零售
傳媒娛樂
醫藥健康
投資金融
能源環境
地產建筑
傳統產業
英文報告
其它
最新報告
中英對照
全文搜索
報告精選
PDF上傳翻譯
多格式文檔互轉
入駐&報告售賣
會員權益
機構報告
券商研報
財報庫
專題合集
英文報告
數據圖表
會議報告
其他資源
行業聚焦
芯片產業
熱點概念
全球咨詢智庫
人工智能
500強
新質生產力
會議峰會
新能源汽車
企業年報
互聯網
公司研究
行業綜觀
消費教育
科技通信
醫藥健康
人力資源
投資金融
汽車產業
物流地產
電子商務
傳統產業
傳媒營銷
其它
2025低空經濟/低空產業報告合集（共49套打包）
2025年智算中心/AIDC/AI數據中心研究報告合集（共37套打包）
AI、科技與通信
廣告、傳媒與營銷
消費、零售與支付
HR、文化與旅游
金融、保險與投資
能源、環境與工業
醫療制藥與大健康
物流、地產與建筑
其他行業
AI ? 科技 ? 通信
數字化
金融財經
智能制造
電商傳媒
地產建筑
醫療醫學
能源化工
其他行業
收藏
下載
2025-05-20
AI查數
行業數據
政策法規
商業模式
產業鏈
競爭格局
市場規模
產業概述
其它
2025年
AI讀財報
年報
一季報
半年報
三季報
IPO招股書
社會責任報告
A股
IPO申報
港股
美股&全球
新三板
掃碼登錄
手機快捷登錄
賬號登錄
