7 added · 13 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Security breaches, cyber incidents or allegations that we used personal information in violation of applicable privacy and other laws could result in significant legal and financial exposure. 11 Table of Contents Legal and Compliance Risks Litigation with customers, employees and others could harm our reputation and impact operating results.
Additional actions, including the imposition or increase of tariffs, could negatively impact our ability and the ability of our third-party vendors and suppliers to source products from foreign jurisdictions and could lead to an increase in the cost of goods and adversely affect our profitability.
While future cash flows under the Citibank Alliance are difficult to predict, the Company and Citi remain focused on collaborative strategies to enhance customer awareness and acceptance of the program’s product offerings in an effort to improve the financial performance of this alliance; however, there can be no assurance that these efforts will significantly impact the performance.
If the income or cash flow that the Company receives from the Citibank Alliance decreases, our operating results and cash flows could be adversely affected. 9 Table of Contents Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, and enforcement of credit accounts, and limitations on the amount of finance charges and fees (including late fees) that may be charged by a credit card provider.
Our operations are largely dependent upon the integrity, security and consistent operation of various systems and data centers, including the point-of-sale systems in the stores, our Internet website, data centers that process transactions, communication systems and various software applications used throughout our Company to order merchandise, track inventory flow, process transactions and generate performance and financial reports.
Our information technology systems are also subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyberattacks and ransomware attacks, usage errors by our employees and other items discussed previously in this Item 1A, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and acts of war or terrorism.
Increases in employee wages and the cost of employee benefits could impact the Company’s financial results and cash flows.
No longer disclosed
For example, beginning in fiscal 2020, the United States Government took significant steps to address the forced labor concerns in the Xinjiang Uyghur Autonomous Region of China (“Xinjiang Region”), including withhold release orders (“WROs”) issued by United States Customs and Border Protection (“CBP”).
Additional actions, including new tariffs imposed in the first few months of fiscal 2025 or potential new tariffs on Vietnam or other countries where the Company sources a significant amount of its merchandise, could negatively impact our ability and the ability of our third-party vendors and suppliers to source products from foreign jurisdictions and could lead to an increase in the cost of goods and adversely affect our profitability.
In late fiscal 2021, the United States 8 Table of Contents Government enacted the Uyghur Forced Labor Prevention Act (“UFLPA”), which presumes goods produced in the Xinjiang Region, or with labor linked to specified Chinese government-sponsored labor programs, were produced using forced labor and prohibits importation of such goods into the United States absent clear and convincing evidence proving otherwise.
Security breaches, cyber incidents or allegations that we used personal information in violation of applicable privacy and other laws could result in significant legal and financial exposure.
Legal and Compliance Risks Litigation with customers, employees and others could harm our reputation and impact operating results.
Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, and enforcement of credit accounts, and limitations on the amount of finance charges and fees that may be charged by a credit card provider, such as the Consumer Financial Protection Bureau’s amendment to Regulation Z to limit the dollar amounts credit card companies can charge for late fees, which we expect could have a material adverse effect on the income and cash flows from our private label credit card program.
Our operations are largely dependent upon the integrity, security and consistent operation of various systems and data centers, including the point-of-sale systems in the stores, our Internet website, data centers that process transactions, communication systems and various software applications used throughout our Company to order merchandise, track inventory flow, process transactions and generate performance and financial reports. 10 Table of Contents Our information technology systems are also subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyberattacks and ransomware attacks, usage errors by our employees and other items discussed previously in Item 1A, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and acts of war or terrorism.
While future cash flows under the new program are difficult to predict, the Company expects income from the new program to initially be less than historical earnings from the Wells Fargo Alliance.
If the income or cash flow that the Company receives from the Citibank Alliance decreases, our operating results and cash flows could be adversely affected.
The extent to which future cash flows will vary over the term of the new program from historical cash flows cannot be reasonably estimated at this time.
The WROs allow CBP to detain and deny entry of imports suspected of containing cotton from Xinjiang, regardless of the origin of the finished products.
Compliance with UFLPA could lead to an increase in the cost of goods and adversely affect our profitability.