Risk Factors Update Summary

• Addition of new risk related to the inability to achieve organizational efficiency and align the organizational structure, which could impact business productivity and efficiency.
• Inclusion of the risk of failure to identify and respond to fashion trends and customer preferences, which may result in lower sales and profitability.
• Increased enforcement of intellectual property (IP) practices may result in tariffs and denial of market access, impacting costs and operations.
• Addition of the risk of increased competition in the women's specialty retail industry, including online and in-store competitors, which may negatively impact sales and operating margins.
• Reliance on one supplier decreased from 13% to 14% of total purchases in fiscal years 2022 and 2021, respectively.
• Failure to adhere to acceptable labor practices in the supply chain may result in termination of supplier relationships.
• Inclusion of the risk of supply chain inflation and disruptions, particularly due to the COVID-19 pandemic, leading to higher costs and potential liquidity challenges.
• Addition of the risk related to general economic conditions, including factors such as unemployment levels, consumer credit, inflation, and interest rates, which may reduce customer spending and impact financial performance.
• Reliance on one location for operations may hinder response to changes and pose risks to business continuity.
• Mention of the fluctuating costs and inflation, including energy costs, shipping/freight costs, and inflationary pressures, which may affect margins and results of operations.
• Scrutiny and evolving expectations regarding ESG disclosures and initiatives may impact brand value.
• Inclusion of the risk related to information technology systems, including disruptions, delays, and failures that could severely disrupt store operations and websites, requiring significant expenditures to remedy.
• Risks associated with global economic trends, geopolitical risks, and trade policies may affect profitability and demand for products.
• Changes in laws, regulations, and government policies can require modifications to business operations and impact competitive position.
• Addition of the risk of cybersecurity and data privacy breaches, which can increase costs, impact competitiveness, and expose the company to fines, penalties, and reputational damage.
• Mention of the potential impact of travel restrictions and disruptions on the supply chain during the COVID-19 pandemic.
• Mention of the potential impact of changes in laws or regulations, such as privacy laws and PCI standards, on system or administrative costs and the potential consequences of a cyber breach or privacy violation.
• Inclusion of the risk of supply chain disruptions, particularly in China and Vietnam, which could impact merchandise costs and availability.