1318008--3/25/2008--Zumiez

related topics

{customer, product, revenue}

{acquisition, growth, future}

{financial, litigation, operation}

{operation, natural, condition}

{stock, price, operating}

{condition, economic, financial}

{control, financial, internal}

{personnel, key, retain}

{operation, international, foreign}

{debt, indebtedness, cash}

{system, service, information}

{regulation, government, change}

{product, market, service}

{property, intellectual, protect}

{competitive, industry, competition}

{investment, property, distribution}

Our growth strategy depends on our ability to open and operate a significant number of new stores each year, which could strain our resources and cause the performance of our existing stores to suffer. If we fail to effectively execute our expansion strategy, we may not be able to successfully open new store locations in a timely manner, if at all, which could have an adverse affect on our net sales and results of operations. Our business is dependent upon our being able to anticipate, identify and respond to changing fashion trends, customer preferences and other fashion-related factors; failure to do so could have a material adverse effect on us. Our ability to attract customers to our stores depends heavily on the success of the shopping malls in which our stores are located; any decrease in customer traffic in those malls could cause our sales to be less than expected. Our sales and inventory levels fluctuate on a seasonal basis, leaving our operating results particularly susceptible to changes in back-to-school and holiday shopping patterns. Our quarterly results of operations are volatile and may decline. Failure to successfully integrate any businesses or stores that we acquire could have an adverse impact on our results of operations and financial performance. Our business is susceptible to weather conditions that are out of our control including the potential risks of unpredictable weather patterns, including any weather patterns associated with global warming, and the resultant unseasonable weather could have a negative impact on our results of operations. We may be unable to compete favorably in the highly competitive retail industry, and if we lose customers to our competitors, our sales could decrease. If we fail to maintain good relationships with vendors or if a vendor is otherwise unable or unwilling to supply us with adequate quantities of their products at acceptable prices, our business and financial performance could suffer. If we lose key management or are unable to attract and retain the talent required for our business, our financial performance could suffer. Our failure to meet our staffing needs could adversely affect our ability to implement our growth strategy and could have a material impact on our results of operations. Our operations, including our sole distribution center, are concentrated in the western United States, which makes us susceptible to adverse conditions in this region. We are required to make substantial rental payments under our operating leases and any failure to make these lease payments when due would likely have a material adverse effect on our business and growth plans. The terms of our revolving credit facility impose operating and financial restrictions on us that may impair our ability to respond to changing business and economic conditions. This impairment could have a significant adverse impact on our business. Our business could suffer as a result of small parcel delivery services such as United Parcel Service or Federal Express being unable to distribute our merchandise. Our business could suffer if a manufacturer fails to use acceptable labor practices. Our failure to adequately anticipate a correct mix of private label merchandise may have a material adverse effect on our business. Most of our merchandise is produced by foreign manufacturers, therefore the availability and costs of these products may be negatively affected by risks associated with international trade and other international conditions. If our information systems hardware or software fails to function effectively or does not scale to keep pace with our planned growth, our operations could be disrupted and our financial results could be harmed. Our inability or failure to protect our intellectual property or our infringement of other's intellectual property could have a negative impact on our operating results. The effects of war or acts of terrorism could adversely affect our business. The outcome of litigation could have a material adverse effect on our business and may result in substantial costs and could divert management's attention. Our operations expose us to the risk of litigation which could lead to significant potential liability and costs that could harm our business, financial condition or results of operations. Our internet operations subject us to numerous risks that could have an adverse effect on our results of operations. We have incurred and will continue to incur significant expenses as a result of being a public company, which will negatively impact our financial performance. Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses. The security of our databases that contain personal information of our retail customers could be breached, which could subject us to adverse publicity, litigation, and expenses. In addition, if we are unable to comply with security standards created by the credit card industry, our operations could be adversely affected. The current uncertainty surrounding the United States economy coupled with cyclical economic trends in action sports retailing could have a material adverse effect on our results of operations. We may fail to meet analyst expectations, which could cause the price of our stock to decline. The trading price of our investment in marketable securities may fluctuate

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1318008--3/25/2008--Zumiez_Inc