Big Lots 2012 Annual Report Download - page 102

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The following table sets forth the seasonality of net sales and operating profit for 2012, 2011, and 2010 by
fiscal quarter:
First Second Third Fourth
Fiscal Year 2012
Net sales as a percentage of full year ............................ 24.0% 22.6% 21.0% 32.4%
Operating profit as a percentage of full year ...................... 23.0 13.2 (2.2) 66.0
Fiscal Year 2011
Net sales as a percentage of full year ............................ 23.6% 22.4% 21.9% 32.1%
Operating profit as a percentage of full year ...................... 25.0 17.3 2.6 55.1
Fiscal Year 2010
Net sales as a percentage of full year ............................ 24.9% 23.1% 21.3% 30.7%
Operating profit as a percentage of full year ...................... 25.2 17.7 7.5 49.6
Operating Strategy
In 2005, Mr. Fishman joined us as our Chief Executive Officer, Chairman and President and introduced our
current operating strategy, the What’s Important Now Strategy (“WIN Strategy”). The WIN Strategy focuses
on three key elements of our business: merchandising, real estate, and cost structure. The WIN Strategy was
designed to increase the operating profit performance of our existing store base. In 2009, driven by both the
improvements in our store productivity and the softening of the commercial real estate market, we expanded
our WIN Strategy to also include the pursuit of net new store growth. In 2011, our Board of Directors approved
the purchase of Liquidation World Inc., a Canadian closeout retailer, with the expectation that the management
team could implement the key elements of the WIN Strategy to produce a profitable turnaround strategy
while growing a store base in Canada. From 2010 to 2012, we grew our net store count by 213 stores, or 16%,
including stores acquired through the purchase of Liquidation World, Inc. Additionally, over the past three
years, we have reinvested $370 million in our business through capital expenditures and $1 billion was returned
to shareholders through publicly announced share repurchase programs.
Although Mr. Fishman has announced his intentions to retire in 2013, we anticipate that the key elements of
the WIN Strategy will remain consistent in 2013. During 2013, the Company intends to announce the hiring of
a new Chief Executive Officer, who we expect to assess the current WIN strategy initiatives and finalize our
strategic plan for future years.
In 2013, we anticipate:
x Earnings per diluted share from continuing operations to be $3.05 to $3.25.
x Net sales to increase in both the U.S. and Canada:
ż U.S. comparable stores sales in the range of flat to 1% increase and growth of 2% to 3% in total
net sales.
ż Canadian comparable stores sales increase of 15% to 22% and growth of 16% to 23% in total
net sales.
x Opening 50 new stores and closing 45 stores, for net growth of 5 stores in the U.S. Additionally, in
Canada, we expect to open 2 to 3 new stores under the Big Lots name while closing a similar number
of Liquidation World or LW stores.
x Cash flow (operating activities less investing activities) of approximately $180 million for future
reinvestment, return to shareholders, or to lower our obligations under the 2011 Credit Agreement.
The following sections provide additional discussion and analysis of our WIN Strategy in our U.S. segment and
the implementation of the WIN Strategy in our Canadian segment. The “2012 Compared To 2011” section below
provides additional discussion and analysis of the impact of these strategies on our financial performance and
the assumptions and expectations upon which we are basing our guidance for our future results.