THE BUCKLE, INC. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto of the Company included in this Form 10-Q. All references herein to the "Company", "Buckle", "we", "us", or similar terms refer toThe Buckle, Inc. and its subsidiary. The following is management's discussion and analysis of certain significant factors which have affected the Company's financial condition and results of operations during the periods included in the accompanying condensed consolidated financial statements.
EXECUTIVE OVERVIEW
Company management considers the following items to be key performance indicators in evaluating Company performance.
Comparable Store Sales - Stores are deemed to be comparable stores if they were
open in the prior year on the first day of the fiscal period being presented.
Stores which have been remodeled, expanded, and/or relocated, but would
otherwise be included as comparable stores, are not excluded from the comparable
store sales calculation. Online sales are included in comparable store sales.
Management considers comparable store sales to be an important indicator of
current Company performance, helping leverage certain fixed costs when results
are positive. Negative comparable store sales results could reduce net sales and
have a negative impact on operating leverage, thus reducing net earnings.
Net Merchandise Margins - Management evaluates the components of merchandise
margin including initial markup and the amount of markdowns during a period. Any
inability to obtain acceptable levels of initial markups or any significant
increase in the Company's use of markdowns could have an adverse effect on the
Company's gross margin and results of operations.
Operating Margin - Operating margin is a good indicator for management of the
Company's success. Operating margin can be positively or negatively affected by
comparable store sales, merchandise margins, occupancy costs, and the Company's
ability to control operating costs.
Cash Flow and Liquidity (working capital) - Management reviews current cash and
short-term investments along with cash flow from operating, investing, and
financing activities to determine the Company's short-term cash needs for
operations and expansion. The Company believes that existing cash, short-term
investments, and cash flow from operations will be sufficient to fund current
and long-term anticipated capital expenditures and working capital requirements
for the next several years.
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RESULTS OF OPERATIONS
The following table sets forth certain financial data expressed as a percentage
of net sales and the percentage change in the dollar amount of such items
compared to the prior period:
Percentage of Net Sales
For Thirteen Weeks Ended Percentage
May 2, May 4,
2020 2019 Increase/(Decrease)
Net sales 100.0 % 100.0 % (42.7 )%
Cost of sales (including buying, distribution, and
occupancy costs) 76.8 % 61.9 % (28.9 )%
Gross profit 23.2 % 38.1 % (65.0 )%
Selling expenses 29.0 % 23.2 % (28.1 )%
General and administrative expenses 8.2 % 5.6 % (16.0 )%
Income (loss) from operations (14.0 )% 9.3 % (186.4 )%
Other income, net 0.5 % 0.6 % (54.3 )%
Income (loss) before income taxes (13.5 )% 9.9 % (178.1 )%
Income tax expense (benefit) (3.3 )% 2.4 % (178.1 )%
Net income (loss) (10.2 )% 7.5 % (178.1 )%
Net sales decreased from $201.3 million for the first quarter of fiscal 2019 to
$115.4 million for the first quarter of fiscal 2020, a 42.7% decrease. The
decrease in net sales for the quarter was the result of the Company's closing of
all brick and mortar stores beginning March 18, 2020 due to the COVID-19
pandemic. Please see below for further discussion of the actions taken by the
Company as a result of the COVID-19 pandemic and their impact on the Company's
financial results. As a result of the store closures, the Company is only
reporting total net sales for the first quarter as it does not believe
comparable store sales is a meaningful metric given the closures. The Company's
online store remained open during the quarter without interruption. Online sales
for the quarter increased 31.5% to $32.1 million for the thirteen week period
ended May 2, 2020 compared to $24.4 million for the thirteen week period ended
May 4, 2019 . For the quarter, the average retail price per piece of merchandise
sold increased 1.7%, the average transaction value increased 0.5%, and the
average units sold per transaction decreased 0.8%.
The Company's average retail price per piece of merchandise sold increased
$0.75 , or 1.7%, during the first quarter of fiscal 2020 compared to the first
quarter of fiscal 2019. This $0.75 increase was primarily attributable to the
following changes (with their corresponding effect on the overall average price
per piece): a shift in the merchandise mix ($1.20 ); partially offset by a 1.9%
reduction in average denim price points (-$0.41 ) and a reduction in average
price points for certain other merchandise categories (-$0.04 ). These changes
are primarily a reflection of merchandise shifts in terms of brands and product
styles, fabrics, details, and finishes.
Gross profit after buying, distribution, and occupancy expenses decreased from
$76.7 million in the first quarter of fiscal 2019 to $26.8 million in the first
quarter of fiscal 2020. As a percentage of net sales, gross profit decreased
from 38.1% in the first quarter of fiscal 2019 to 23.2% in the first quarter of
fiscal 2020. The gross margin decline was the result of deleveraged occupancy,
buying, and distribution expenses as a result of the store closures (13.80%, as
a percentage of net sales) and a decline in merchandise margins primarily due to
an increase in the reserve for inventory markdowns and obsolescence (1.10%, as a
percentage of net sales).
Selling expenses decreased from $46.6 million in the first quarter of fiscal
2019 to $33.5 million in the first quarter of fiscal 2020. As a percentage of
net sales, selling expenses increased from 23.2% for the first quarter of fiscal
2019 to 29.0% for the first quarter of fiscal 2020.
General and administrative expenses decreased from $11.3 million in the first
quarter of fiscal 2019 to $9.5 million in the first quarter of fiscal 2020. As a
percentage of net sales, general and administrative expenses increased from 5.6%
in the first quarter of fiscal 2019 to 8.2% in the first quarter of fiscal 2020.
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In total, Selling, General, and Administrative Expenses decreased $14.9 million
or 25.7% from $57.9 million for the first quarter of fiscal 2019 to $43.0
million for the first quarter of fiscal 2020. A $13.5 million reduction in
compensation and benefit related expenses and a $3.3 million reduction in
certain other expense categories (including travel expenses, store supplies,
professional fees, and bankcard fees) were partially offset by a $0.9 million
increase in shipping and marketing costs related to the strong growth in online
sales and a $1.0 million expense for store-related asset impairment charges.
As a result of the above changes, the Company's loss from operations was $16.2
million in the first quarter of fiscal 2020 compared to income from operations
of $18.7 million in the first quarter of fiscal 2019.
Other income decreased from $1.3 million in the first quarter of fiscal 2019 to
$0.6 million in the first quarter of fiscal 2020. The Company's other income is
derived primarily from investment income related to the Company's cash and
investments.
The income tax benefit, as a percentage of the pre-tax loss, was 24.5% in the
first quarter of fiscal 2020 and income tax expense, as a percentage of pre-tax
income, was 24.5% in the first quarter of fiscal 2019, bringing the net loss to
$11.8 million in the first quarter of fiscal 2020 compared to net income of
$15.1 million in the first quarter of fiscal 2019.
Response to the COVID-19 Pandemic
Store Closings - As previously announced onMarch 17, 2020 andMarch 31, 2020 , the Company temporarily closed all of its brick and mortar stores beginningMarch 18, 2020 to protect the health and welfare of its guests, teammates, and communities. The Company began the process of reopening certain stores the week ofApril 26, 2020 , following all appropriate federal, state, and local reopening guidelines. As ofMay 2, 2020 , 37 stores had been reopened. The Company has continued to reopen stores each week and had reopened 397 of its 444 stores as ofJune 5, 2020 . The store closings had a significant impact on the Company's revenue for the quarter, which was down$85.9 million or 42.7%. The Company's online store remained open without interruption. Teammate Impact - Given the store closures and resulting reduction in revenue, the Company took several actions related to its teammates. For the initial two week period of the closure (March 18, 2020 throughMarch 31, 2020 ), the Company provided full pay and benefits for all its teammates. Then, beginningApril 5, 2020 , the Company furloughed the majority of its store and corporate office teammates without pay. During the furlough period, the Company continued to provide full benefits for all participating teammates. As an additional measure, all essential teammates who continued working during the furlough period were subject to a temporary salary reduction program - with the Company's Chairman and its President and Chief Executive Officer electing to forgo their entire salary until such time as normal business operations resume. Similarly, the Company's Board of Directors elected to forgo their respective quarterly cash retainers for the first quarter. As mentioned above, these changes resulted in a$13.5 million reduction in SG&A expenses for the quarter related to compensation and benefits. Subsequent to the end of the quarter, the Company ended the temporary salary reduction program effectiveMay 31, 2020 . As of that same date, the Company's Chairman and its President and Chief Executive Officer updated their elections to forgo 50% of their salary, rather than the previous 100% of their salary, through the end of the Company's fiscal second quarter endingAugust 1, 2020 . Inventory and Vendor Payments - During the quarter, the Company's buying teams worked closely with its merchandise vendors to extend payment terms, cancel and reduce orders, as well as alter the timing and flow of future inventory for the rest of spring/summer and into the fall season. This allowed the Company to finish the quarter with inventory up 0.7% compared to the same time a year ago, limited the amount of potential markdown inventory, and maximized open-to-buys for future seasons. The shortened spring selling season did, however, have an impact on the aging of the Company's inventory as of quarter end and resulted in an increase in the reserve for markdowns and obsolescence (as further described in the section titled Critical Accounting Policies and Estimates included herein). The adjustment to inventory for markdowns and/or obsolescence was$15.1 million as ofMay 2, 2020 compared to$11.3 million as ofMay 4, 2019 . Rent Payments - During the quarter, the Company's real estate team worked closely with its landlords. As a result of these efforts, the Company elected to pay essentially full rent for the month of April but was then able to negotiate substantial rent deferrals for May and June. Consistent with guidance in the FASB Staff Q&A regarding lease concessions related to the effects of the COVID-19 pandemic, the Company has made the election to treat all lease concessions as though the enforceable rights and obligations existed in each contract and, therefore, will not apply the lease modification guidance in ASC 842. As such, these deferrals had no impact to rent expense during the quarter. Store-Related Impairment - Given the substantial reduction in the Company's sales (and the related impact on cash flow projections) as a result of store closures due to the COVID-19 pandemic, an impairment assessment was triggered for certain stores. This analysis resulted in$1.0 million of store-related asset impairment charges in the first quarter of fiscal 2020. 16 -------------------------------------------------------------------------------- Dividend Payments - As announced onJune 2, 2020 , at its quarterly meeting of the Board of Directors, held onJune 1, 2020 , the Board temporarily suspended the Company's quarterly dividend payments. Previously, at itsMarch 23, 2020 meeting, the Board had deferred making a decision on dividend payments until its next regularly scheduled Board meeting to allow more time to assess the impact of the COVID-19 pandemic on the Company. The Board determined that suspending the quarterly dividends is important to maintaining the Company's cash position, providing the Company with financial flexibility to deal with any ongoing uncertainty related to COVID-19.
LIQUIDITY AND CAPITAL RESOURCES
As ofMay 2, 2020 , the Company had working capital of$201.1 million , including$185.0 million of cash and cash equivalents and$17.7 million of short-term investments. The Company's cash receipts are generated from retail sales and from investment income, and the Company's primary ongoing cash requirements are for inventory, payroll, occupancy costs, dividend payments, new store expansion, remodeling, and other capital expenditures. Historically, the Company's primary source of working capital has been cash flow from operations. During the first quarter of fiscal 2020 and fiscal 2019, the Company's cash flow from operations was$(28.3) million and$29.3 million , respectively. Changes in operating cash flow between periods is primarily a function of changes in net income, along with changes in inventory and accounts payable based on the timing and amount of merchandise purchased in each respective period. The significant reduction for the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 is largely the result of the impact of the COVID-19 store closures on reported revenue and net income, along with the impact of the resulting adjustments the Company made related to inventory, accounts payable, and accrued employee compensation. The uses of cash for both thirteen week periods primarily include payment of annual bonuses accrued at fiscal year end, inventory purchases, construction costs for new and remodeled stores, other capital expenditures, and purchases of investment securities. The first quarter of fiscal 2019 also included cash used for dividend payments. During the first quarter of fiscal 2020 and 2019, the Company invested$1.5 million and$2.3 million , respectively, in new store construction, store renovation, and store technology upgrades. The Company also spent$0.6 million and$0.2 million in the first quarter of fiscal 2020 and 2019, respectively, in capital expenditures for the corporate headquarters and distribution facility. During the remainder of fiscal 2020, the Company anticipates completing six additional store construction projects, including 3 new stores and 3 stores to be substantially remodeled and/or relocated. Management estimates that total capital expenditures during fiscal 2020 will be approximately$7.0 to$10.0 million , which includes primarily planned store projects and technology investments. The Company believes that existing cash and cash equivalents, investments, and cash flow from operations will be sufficient to fund current and long-term anticipated capital expenditures and working capital requirements for the next several years. The Company has a consistent record of generating positive cash flow from operations each year and, as ofMay 2, 2020 , had total cash and investments of$218.6 million , including$15.9 million of long-term investments. Future conditions, however, may reduce the availability of funds based upon factors such as a decrease in demand for the Company's product, change in product mix, competitive factors, and general economic conditions as well as other risks and uncertainties which would reduce the Company's sales, net profitability, and cash flows. Also, the Company's acceleration in store openings and/or remodels or the Company entering into a merger, acquisition, or other financial related transaction could reduce the amount of cash available for further capital expenditures and working capital requirements. As discussed in Results of Operations above, COVID-19 had a significant impact on the Company's results of operations during the fiscal quarter endedMay 2, 2020 and also resulted in a$35.9 million reduction in cash and cash equivalents during the period. Although the Company ended the quarter in a strong financial position and had ample liquidity (with$218.6 million in cash and investments), it cannot reasonably estimate the length or severity of the pandemic's impact. Also, although the Company had reopened 397 of its 444 stores as ofJune 5, 2020 it is difficult to estimate the continuing impact of COVID-19 on the Company's consolidated financial position, consolidated results of operations, and consolidated cash flows for the remainder of fiscal 2020. The Company has available an unsecured line of credit of$25.0 million withWells Fargo Bank, N.A . for operating needs and letters of credit. The line of credit agreement has an expiration date ofJuly 31, 2021 and provides that$10.0 million of the$25.0 million line is available for letters of credit. Borrowings under the line of credit provide for interest to be paid at a rate based on LIBOR. The Company has, from time to time, borrowed against these lines of credit. There were no bank borrowings during the first quarter of fiscal 2020 or 2019. The Company had no bank borrowings as ofMay 2, 2020 and was in compliance with the terms and conditions of the line of credit agreement. 17 --------------------------------------------------------------------------------
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of Operations are based uponThe Buckle, Inc.'s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America . The preparation of these consolidated financial statements requires that management make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the financial statement date, and the reported amounts of sales and expenses during the reporting period. The Company regularly evaluates its estimates, including those related to inventory, investments, incentive bonuses, and income taxes. Management bases its estimates on past experience and on various other factors that are thought to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the estimates and judgments used in preparing these consolidated financial statements were the most appropriate at that time. Presented below are those critical accounting policies that management believes require subjective and/or complex judgments that could potentially affect reported results of operations. The critical accounting policies and estimates utilized by the Company in the preparation of its condensed consolidated financial statements for the period endedMay 2, 2020 have not changed materially from those utilized for the fiscal year endedFebruary 1, 2020 , included inThe Buckle Inc.'s 2019 Annual Report on Form 10-K.
1. Revenue Recognition. Retail store sales are recorded, net of expected
returns, upon the purchase of merchandise by customers. Online sales are
recorded, net of expected returns, when merchandise is tendered for delivery
to the common carrier. Shipping fees charged to customers are included in
revenue and shipping costs are included in selling expenses. The Company
recognizes revenue from sales made under its layaway program upon delivery of
the merchandise to the customer. Revenue is not recorded when gift cards and
gift certificates are sold, but rather when a card or certificate is redeemed
for merchandise. A current liability for unredeemed gift cards and
certificates is recorded at the time the card or certificate is purchased.
The liability recorded for unredeemed gift cards and gift certificates was
respectively. Gift card and gift certificate breakage is recognized as
revenue in proportion to the redemption pattern of customers by applying an
estimated breakage rate. The estimated breakage rate is based on historical
issuance and redemption patterns and is re-assessed by the Company on a
regular basis. Sales tax collected from customers is excluded from revenue
and is included as part of "accrued store operating expenses" on the
Company's condensed consolidated balance sheets.
The Company establishes a liability for estimated merchandise returns, based
upon the historical average sales return percentage, that is recognized at the
transaction value. The Company also recognizes a return asset and a
corresponding adjustment to cost of sales for the Company's right to recover
returned merchandise, which is measured at the estimated carrying value, less
any expected recovery costs. Customer returns could potentially exceed the
historical average, thus reducing future net sales results and potentially
reducing future net earnings. The accrued liability for reserve for sales
returns was $2.9 million as of May 2, 2020 and $2.3 million as of February 1,
2020 .
The Company's Guest Loyalty program allows participating guests to earn points
for every qualifying purchase, which (after achievement of certain point
thresholds) are redeemable as a discount off a future purchase. Reported revenue
is net of both current period reward redemptions and accruals for estimated
future rewards earned under the Guest Loyalty program. A liability has been
recorded for future rewards based on the Company's estimate of how many earned
points will turn into rewards and ultimately be redeemed prior to expiration. As
of both May 2, 2020 and February 1, 2020 , $9.6 million was included in "accrued
store operating expenses" as a liability for estimated future rewards.
Through partnership with Comenity Bank , the Company offers a private label
credit card ("PLCC"). Customers with a PLCC are enrolled in our B-Rewards
incentive program and earn points for every qualifying purchase on their card.
At the end of each rewards period, customers who have exceeded a minimum point
threshold receive a reward to be redeemed on a future purchase. The B-Rewards
program also provides other discount and promotional opportunities to
cardholders on a routine basis. Reported revenue is net of both current period
reward redemptions, current period discounts and promotions, and accruals for
estimated future rewards earned under the B-Rewards program. A liability has
been recorded for future rewards based on the Company's estimate of how many
earned points will turn into rewards and ultimately be redeemed prior to
expiration, which is included in "gift certificates redeemable" on the Company's
condensed consolidated balance sheets.
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--------------------------------------------------------------------------------2. Inventory. Inventory is valued at the lower of cost or net realizable value.
Cost is determined using an average cost method that approximates the
first-in, first-out (FIFO) method. Management makes adjustments to inventory
and cost of goods sold, based upon estimates, to account for merchandise
obsolescence and markdowns that could affect net realizable value, based on
assumptions using calculations applied to current inventory levels within
each different markdown level. Management also reviews the levels of
inventory in each markdown group and the overall aging of the inventory
versus the estimated future demand for such product and the current market
conditions. Such judgments could vary significantly from actual results,
either favorably or unfavorably, due to fluctuations in future economic
conditions, industry trends, consumer demand, and the competitive retail
environment. Such changes in market conditions could negatively impact the
sale of markdown inventory, causing further markdowns or inventory
obsolescence, resulting in increased cost of goods sold from write-offs and
reducing the Company's net earnings. The adjustment to inventory for
markdowns and/or obsolescence was
million as of
3. Income Taxes. The Company records a deferred tax asset and liability for
expected future tax consequences resulting from temporary differences between
financial reporting and tax bases of assets and liabilities. The Company
considers future taxable income and ongoing tax planning in assessing the
value of its deferred tax assets. If the Company determines that it is more
than likely that these assets will not be realized, the Company would reduce
the value of these assets to their expected realizable value, thereby
decreasing net income. Estimating the value of these assets is based upon the
Company's judgment. If the Company subsequently determined that the deferred
tax assets, which had been written down, would be realized in the future,
such value would be increased. Adjustment would be made to increase net
income in the period such determination was made.
4. Leases. The Company's lease portfolio is primarily comprised of leases for
retail store locations. The Company also leases certain equipment and
corporate office space. Store leases for new stores typically have an initial
term of 10 years, with options to renew for an additional 1 to 5 years. The
exercise of lease renewal options is at the Company's sole discretion and is
included in the lease term for calculations of its right-of-use assets and
liabilities when it is reasonably certain that the Company plans to renew
these leases. Certain store lease agreements include rental payments based on
a percentage of retail sales over contractual levels and others include
rental payments adjusted periodically for inflation. Lease agreements do not
contain any residual value guarantees, material restrictive covenants, or
options to purchase the leased property.
The Company has elected to apply the practical expedient to account for lease components (e.g. fixed payments for rent, insurance, and real estate taxes) and nonlease components (e.g. fixed payments for common area maintenance) together as a single component for all underlying asset classes. Additionally, the Company elected as an accounting policy to exclude short-term leases from the recognition requirements. Consistent with guidance in the FASB Staff Q&A regarding lease concessions related to the effects of the COVID-19 pandemic, the Company has made the election to treat all lease concessions as though the enforceable rights and obligations existed in each contract and, therefore, will not apply the lease modification guidance in ASC 842.
5. Investments. Investments classified as short-term investments include
securities with a maturity of greater than three months and less than one
year. Available-for-sale securities are reported at fair value, with
unrealized gains and losses excluded from earnings and reported as a separate
component of stockholders' equity (net of the effect of income taxes), using
the specific identification method, until they are sold. Held-to-maturity
securities are reported at amortized cost. Trading securities are reported at
fair value, with unrealized gains and losses included in earnings, using the
specific identification method.
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OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS, AND COMMERCIAL COMMITMENTS
As referenced in the table below, the Company has contractual obligations and commercial commitments that may affect the financial condition of the Company. Based on management's review of the terms and conditions of its contractual obligations and commercial commitments, there is no known trend, demand, commitment, event, or uncertainty that is reasonably likely to occur which would have a material effect on the Company's financial condition, results of operations, or cash flows. In addition, the commercial obligations and commitments made by the Company are customary transactions which the Company believes to be similar to those of other comparable retail companies. The following table identifies the material obligations and commitments as ofMay 2, 2020 : Payments Due by Fiscal Year Contractual obligations (dollar amounts in thousands): Total 2020 (remaining)
2021-2022 2023-2024 Thereafter
Purchase obligations$ 13,304 $ 4,363$ 6,605 $ 1,780 $ 556 Deferred compensation 15,204 - - - 15,204 Operating lease payments (a) 390,476 74,854 157,338 103,515 54,769 Total contractual obligations$ 418,984 $ 79,217$ 163,943 $ 105,295 $ 70,529
(a) See Footnote 6 to the condensed consolidated financial statements.
The Company has available an unsecured line of credit of$25.0 million , which is excluded from the preceding table. The line of credit agreement has an expiration date ofJuly 31, 2021 and provides that$10.0 million of the$25.0 million line is available for letters of credit. Certain merchandise purchase orders require that the Company open letters of credit. When the Company takes possession of the merchandise, it releases payment on the letters of credit. The amounts of outstanding letters of credit reported reflect the open letters of credit on merchandise ordered, but not yet received or funded. The Company believes it has sufficient credit available to open letters of credit for merchandise purchases. There were no bank borrowings during the first quarter of fiscal 2020 or the first quarter of fiscal 2019. The Company had outstanding letters of credit totaling$1.1 million and$1.5 million as ofMay 2, 2020 andFebruary 1, 2020 , respectively. The Company has no other off-balance sheet arrangements.
SEASONALITY
The Company's business is seasonal, with the holiday season (from approximatelyNovember 15 to December 30 ) and the back-to-school season (from approximatelyJuly 15 to September 1 ) historically contributing the greatest volume of net sales. For fiscal years 2019, 2018, and 2017, the holiday and back-to-school seasons accounted for approximately 35% of the Company's fiscal year net sales. Quarterly results may vary significantly depending on a variety of factors including the timing and amount of sales and costs associated with the opening of new stores, the timing and level of markdowns, the timing of store closings, the remodeling of existing stores, competitive factors, and general economic conditions. FORWARD LOOKING STATEMENTS Information in this report, other than historical information, may be considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "1995 Act"). Such statements are made in good faith by the Company pursuant to the safe-harbor provisions of the 1995 Act. In connection with these safe-harbor provisions, this management's discussion and analysis contains certain forward-looking statements, which reflect management's current views and estimates of future economic conditions, Company performance, and financial results. The statements are based on many assumptions and factors that could cause future results to differ materially. Such factors include, but are not limited to, changes in product mix, changes in fashion trends, competitive factors, and general economic conditions, economic conditions in the retail apparel industry, as well as other risks and uncertainties inherent in the Company's business and the retail industry in general. Any changes in these factors could result in significantly different results for the Company. The Company further cautions that the forward-looking information contained herein is not exhaustive or exclusive. The Company does not undertake to update any forward-looking statements, which may be made from time to time by or on behalf of the Company. 20
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