Cabela's 2009 Annual Report Download - page 21

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12
ITEM 1A. RISK FACTORS
Risk Factors
Risks Related to Our Merchandising Business
A decline in discretionary consumer spending could reduce our revenue.
Our revenue depends on discretionary consumer spending, which may decrease due to a variety of factors
beyond our control, including:
• unfavorable general business conditions;
• increases in interest rates;
• increases in inflation;
• wars, fears of war, and terrorist attacks and organizing activities;
• increases in consumer debt levels and decreases in the availability of consumer credit;
• adverse or unseasonal weather conditions or events;
• increases in gasoline prices reducing the willingness to travel to our retail stores;
• adverse changes in applicable laws and regulations;
• adverse legislation relating to sales of firearms and ammunition;
• increases in taxation;
• adverse fluctuations of foreign currencies;
• adverse unemployment trends;
• adverse conditions in the mortgage and housing markets; and
• other factors that adversely influence consumer confidence and spending.
Our customers’ purchases of discretionary items, including our products, could decline during periods when
disposable income is lower or periods of actual or perceived unfavorable economic conditions. If this occurs, our
revenue would decline.
Difficult conditions in the economy generally may materially adversely affect our business and results
of operations.
Our results of operations are materially affected by conditions in the economy generally. Volatile oil prices,
falling real estate values, the availability and cost of credit, risks of increased inflation and deflation, declining business
and consumer confidence, and increased unemployment have created fears of a continuing recession. Factors such as
consumer spending and the volatility and strength of the capital markets all affect the business and macroeconomic
environment and, ultimately, the revenue and profitability of our business. In a recession characterized by higher
unemployment, lower family income, and lower consumer spending, the demand for our products could be adversely
affected. This may materially affect our business and results of operations.
Competition in the outdoor recreation and casual apparel and footwear markets could reduce our
revenue and profitability.
The outdoor recreation and casual apparel and footwear markets are highly fragmented and competitive. We
compete directly or indirectly with the following types of companies:
• other specialty retailers that compete with us across a significant portion of our merchandising categories
through retail store or direct businesses, such as Bass Pro Shops, Gander Mountain, Orvis, The Sportsman’s
Guide, and Sportsman’s Warehouse;
• large-format sporting goods stores and chains, such as The Sports Authority, Dick’s Sporting Goods, and
Big 5 Sporting Goods;
• retailers that currently compete with us through retail businesses that may enter the direct business;
• mass merchandisers, warehouse clubs, discount stores, and department stores, such as Wal-Mart and
Target; and
• casual outdoor apparel and footwear retailers, such as L.L. Bean, Lands’ End, and REI.