GPS Gap, Inc.

Risks

• We must successfully gauge apparel trends and changing consumer preferences to succeed.
• Our business is highly competitive.
• Global economic conditions and any related impact on consumer spending patterns could adversely impact our results of operations.
• We may engage in or seek to engage in strategic transactions, such as acquisitions and dispositions, that are subject to various risks and uncertainties, which could disrupt or adversely affect our businesses.
• We must maintain our reputation and brand image.
• Our failure to manage key executive succession and retention and to continue to attract qualified personnel could have an adverse impact on our results of operations.
• Our investments in customer, digital, and omni-channel shopping initiatives may not deliver the results we anticipate.
• If we are unable to manage our inventory effectively, our gross margins could be adversely affected.
• Our business is subject to risks associated with global sourcing and manufacturing.
• We are subject to data and security risks, which could have an adverse effect on our results of operations and consumer confidence in our security measures.
• Failures of, or updates or changes to, our IT systems may disrupt operations.
• Our efforts to expand internationally may not be successful.
• The market for real estate is competitive.
• Risks associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct, could harm our business.
• Our franchise business is subject to certain risks not directly within our control that could impair the value of our brands.
• Trade matters may disrupt our supply chain.
• Our business is exposed to the risks of foreign currency exchange rate fluctuations and our hedging strategies may not be effective in mitigating those risks.
• We experience fluctuations in our comparable sales and margins.
• Changes in our credit profile or deterioration in market conditions may limit our access to the capital markets and adversely impact our financial position or our business initiatives.
• Changes in the regulatory or administrative landscape could adversely affect our financial condition and results of operations.
• Our results could be adversely affected by natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events.
• Reductions in income and cash flow from our credit card arrangement related to our private label and co-branded credit cards could adversely affect our operating results and cash flows.
• We are subject to various proceedings, lawsuits, disputes, and claims from time to time, which could adversely affect our business, financial condition, and results of operations.