874841--3/31/2010--PACIFIC_SUNWEAR_OF_CALIFORNIA

related topics

{customer, product, revenue}

{cost, operation, labor}

{operation, natural, condition}

{acquisition, growth, future}

{product, market, service}

{condition, economic, financial}

{system, service, information}

{stock, price, operating}

{property, intellectual, protect}

{cost, contract, operation}

{personnel, key, retain}

{control, financial, internal}

{regulation, change, law}

{competitive, industry, competition}

We face significant competition from both vertically-integrated and brand-based competitors which could have a material adverse effect on our business. Our failure to reverse declining sales in our Juniors business would have a material adverse impact on our business and profitability. We have previously changed certain of our merchandising and real estate strategies with the goal of improving our operating results. We may continue to modify our strategies going forward and we cannot be certain that our existing or modified strategies will be successful in improving our store productivity or profitability. Our comparable store net sales results fluctuate significantly, which can cause volatility in our operating performance and stock price. Our net sales, operating income and inventory levels fluctuate on a seasonal basis. Our customers may not prefer our proprietary brand merchandise, which may negatively impact our profitability. Our foreign sources of production may not always be reliable, which may result in a disruption in the flow of new merchandise to our stores. The loss of key personnel could have a material adverse effect on our business at any time. We operate our business from one corporate headquarters facility and one distribution facility which exposes us to significant operational risks. Our business depends on our ability to operate existing stores that achieve acceptable levels of profitability. Any failure to do so may negatively impact our stock price and operational performance. We have stated our intention to pursue a merchandise assortment planning strategy based on localization, which may not be successful in improving our store productivity or profitability. The continued volatility in the U.S. economy has adversely affected consumer spending, which could negatively impact our business, operating results and stock price. Our current or prospective vendors may be unable or unwilling to supply us with adequate quantities of their merchandise in a timely manner or at acceptable prices, which could have a material adverse impact on our business. Consolidation in the commercial retail industry may affect our ability to successfully negotiate favorable rent terms for our stores in the future. Any reinvestment in our existing store base may not result in improved operating performance. Conversely, the lack of any reinvestment may cause many of our stores to appear less attractive to customers. Any material failure, interruption or security breach of our computer systems or information technology may adversely affect the operation of our business and our financial results. The effects of terrorism or war could significantly impact consumer spending and our operational performance. Adverse outcomes of litigation matters or failure to comply with federal or state regulations could significantly affect our operating results. 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. Selling merchandise over the Internet carries particular risks that can have a negative impact on our business.

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874841--3/31/2010--PACIFIC_SUNWEAR_OF_CALIFORNIA_INC