Company: SPWH
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0000950170-25-048890
Chunk: 212

Company: SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 1B
Chunk 212
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 rates of our minimum wage outfitters, but also the wages paid to our other hourly outfitters as well. Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer. Any increase in the cost of our labor could have an adverse effect on our operating costs, financial condition and results of operations.

31

Risks Related to Our Business Strategy

Our expansion into new, unfamiliar markets presents increased risks that may prevent us from being profitable in these new markets.  

Part of our long-term strategy is to continue to expand by opening new stores and in recent years, some of our new stores have not generated four-wall Adjusted EBITDA margins and returns on invested capital that we have historically experienced. Opening new stores presents increased risks, especially when we expand into new markets. For instance, in new markets, we will have less familiarity with local customer preferences and may encounter difficulties in attracting customers due to a reduced level of customer familiarity with our brand. Other factors that may impact our ability to open or acquire stores in new markets and operate them profitably, many of which are beyond our control, include: 

•our ability to identify suitable locations, including our ability to gather and assess demographic and marketing data to determine consumer demand for our products in the locations we select; 

•our ability to obtain financing on favorable terms or negotiate favorable lease agreements; 

•our ability to properly assess the profitability of potential new retail store locations; 

•our ability to successfully rebrand any new stores we acquire and integrate such stores into our existing operations; 

•our ability to secure required governmental permits and approvals; 

•our ability to attract, hire and train skilled store operating personnel, especially management personnel; 

•the availability of construction materials and labor and the absence of significant construction delays or cost overruns; 

•our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers living in the areas where new retail stores are built; 

•our ability to supply new retail stores with inventory in a timely manner; 

•our competitors building or leasing stores near our retail stores or in locations we have identified as targets for a new retail store; 

•consumer demand for our products, particularly firearms and ammunition, which drives traffic to our retail stores; 

•regional economic and other factors in the geographies in which we expand; and 

•general economic, political, and business conditions affecting consumer confidence and spending and the overall strength of