Burlington Stores (BURL) risk factors, FY2025 10-K

Macroeconomic, Industry and Business Risks

1. 01A downturn in general economic conditions or consumer spending or inflationary conditions could adversely affect our business
2. 02We face increased competition from other retailers that could adversely affect our business
3. 03Our net sales, operating income and inventory levels fluctuate on a seasonal basis
4. 04A reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located could significantly reduce our sales
5. 05Failure to identify customer trends and preferences to meet customer demand could negatively impact our performance and reputation
6. 06We may be unable to meet evolving regulatory requirements and stakeholder expectations regarding environmental, social or governance (ESG) matters
7. 07Extreme and/or unseasonable weather conditions caused by climate change or otherwise, or natural disasters, could have a significant adverse effect on our business
8. 08Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations

Strategic Risks

1. 09We may not be able to sustain our growth plans or successfully implement our long-range strategic goals
2. 10Failure to execute our opportunistic buying and inventory management process could adversely affect our business

Operational Risks

1. 11If we cannot optimize our existing stores or maintain favorable lease terms, our growth strategy and profitability could be negatively impacted
2. 12If we are unable to purchase attractive brand name merchandise in sufficient quantities at competitive prices, we may be unable to offer an appealing merchandise mix and our sales may be harmed
3. 13Our failure to attract, train and retain quality employees and temporary personnel in sufficient numbers could adversely affect our business
4. 14them in our business model, support their development and retain them, our performance could be adversely affected or our growth could be limited
5. 15Labor costs, including healthcare costs, and other challenges from our large workforce may adversely affect our results and profitability
6. 16Parties with whom we do business may be subject to insolvency risks or may otherwise become unable or unwilling to perform their obligations to us
7. 17Many of our vendors produce merchandise overseas, and our business is exposed to the risk of foreign and domestic operations and international tax policies and trade relations
8. 18fluctuation in our vendors’ local currency against the dollar, which may increase our cost of goods sold; and
9. 19Any of the foregoing factors, or a combination thereof, could have a material adverse effect on our business
10. 20Any disruption to our distribution network could cause disruptions in our business, a loss of sales and profits, increases in our expenses, and other material adverse effects
11. 21If we are unable to protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks, our operations could be disrupted, we may suffer financial losses and our reputation may be damaged
12. 22security and oversight for processing, transmission, storage and the protection of confidential information, and to recover from unexpected outages
13. 23damage to our competitiveness, stock price, and long-term stockholder value
14. 24We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business
15. 25requirements, and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted, making compliance more difficult or costly
16. 26Our future growth and profitability could be adversely affected if our advertising and marketing programs are not effective in generating sufficient levels of customer awareness and traffic
17. 27convert customer awareness into actual store visits and product purchases
18. 28Damage to our corporate reputation or brand could adversely affect our sales and operating results
19. 29The loss of executives or other key personnel may disrupt our business and adversely affect our financial results

Legal, Regulatory, Compliance and Tax Risks

1. 30Difficulty complying with existing and changing laws, rules, regulations and local codes could negatively affect our business operations and financial performance
2. 31The insurance we carry may not always pay, or be sufficient to pay or reimburse us, for our losses
3. 32Issues with safety and merchandise shrinkage could damage our sales and financial results
4. 33Compliance with increasingly rigorous privacy and data security regulations could be costly, affect or limit our business opportunities and how we collect and/or use data, and potentially subject us to fines and lawsuits
5. 34Legal and regulatory proceedings could have an adverse impact on our results of operations
6. 35Use of social media by the Company or third parties at our direction in violation of applicable laws and regulations may adversely impact our reputation or subject us to fines or other penalties

Risk Related to Our Substantial Indebtedness and Corporate Structure

1. 36Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations
2. 37Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our results of operations and our financial condition
3. 38The conditional conversion feature of the 2027 Convertible Notes, if triggered, may adversely affect our financial condition and operating results
4. 39Conversion of the Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Notes, or may otherwise depress the price of our common stock
5. 40We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations

Risks Related to Ownership of Our Common Stock

1. 41Our stock price has been and may continue to be volatile
2. 42Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that stockholders might consider favorable
3. 43require the approval of holders of at least 75% of the outstanding shares of our voting common stock to amend the amended and restated bylaws and certain provisions of the amended and restated certificate of incorporation
4. 44Our business could be impacted as a result of actions by activist stockholders or others