DDS Dillard's, Inc.

Risks

• The COVID-19 pandemic and its effects on public health, our supply chain, the health and well-being of our employees and customers, and the retail industry in general could have a material adverse effect on our business, financial condition and results of operations.
• The retail merchandise business is highly competitive, and that competition could lower our revenues, margins and market share.
• Changes in economic, financial and political conditions, and the resulting impact on consumer confidence and consumer spending, could have an adverse effect on our business and results of operations.
• Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences, and other fashion-related factors.
• Our failure to protect our reputation could have an adverse effect on our business.
• Risks associated with our private label merchandise program could adversely affect our business.
• Fluctuations in the price of merchandise, raw materials, fuel and labor or their reduced availability could increase our cost of goods and negatively impact our financial results.
• Third party suppliers on whom we rely to obtain materials and provide production facilities and other third parties with whom we do business may experience financial difficulties due to current and future economic conditions, which may subject them to insolvency risk or may result in their inability or unwillingness to perform the obligations they owe us.
• We source many of our products from foreign countries, which exposes us to certain risks that include political and economic conditions.
• Failure by third party suppliers to comply with our supplier compliance programs or applicable laws could have a material adverse effect on our business.
• A decrease in cash flows from our operations and constraints to accessing other financing sources could limit our ability to fund our operations, capital projects, interest and debt repayments, stock repurchases and dividends.
• Reductions in the income and cash flow from our long-term marketing and servicing alliance related to the private label credit cards could impact operating results and cash flows.
• Our business is seasonal, and fluctuations in our revenues during the last quarter of our fiscal year can have a disproportionate effect on our results of operations.
• A shutdown of, or disruption in, any of the Company's distribution or fulfillment centers would have an adverse effect on the Company's business and operations.
• Current store locations may become less desirable, and desirable new locations may not be available for a reasonable price, if at all, either of which could adversely affect our results of operations.
• Ownership and leasing of significant amounts of real estate exposes us to possible liabilities and losses.
• A privacy breach could adversely affect our business, reputation and financial condition.
• Litigation with customers, employees and others could harm our reputation and impact operating results.
• Our profitability may be adversely impacted by weather conditions.
• Natural disasters, war, acts of violence, acts of terrorism, other armed conflicts, and public health issues may adversely impact our business.
• Increases in employee wages and the cost of employee benefits could impact the Company’s financial results and cash flows.
• The Company depends on its ability to attract and retain quality employees, and failure to do so could adversely affect our ability to execute our business strategy and our operating results.
• Variations in the amount of vendor allowances received could adversely impact our operating results.
• Our operations are dependent on information technology systems, and disruptions in those systems could have an adverse impact on our results of operations.
• The cost-to-cost method of accounting that we use to recognize contract revenues for our construction segment may result in material adjustments, which could result in a credit or a charge against our earnings.