Big Lots 2010 Annual Report Download - page 6

to reengineer our quality, value, and merchandise assortment to the customer. I am confident we will deliver a much-improved
Consumables offering in 2011, and I am hopeful the business will respond accordingly.
We maintained our sharp focus on leveraging expenses, taking a thoughtful and strategic approach to managing our business
in an uncertain post-recession environment. And the good news is we see opportunity to lower our expenses as a percent of
sales for the foreseeable future as we remain devoted to operational discipline and accountability.
In terms of store operations, I believe our Ready for Business standards have led us to a better in-store shopping experience.
We have recruited and developed a significant pool of new talent with a focus on improving the shopping experience and
supporting future new store growth. I firmly believe we can never have enough talent or “bench strength” across the
organization, especially in store operations given our new store growth plans for the future. Continuous improvement in this
area will forever be the goal … we will never be done.
From a marketing perspective, we’re now approaching eight million active Buzz Club Rewards
®
members, and the program
continues to build. We’re busy testing different promotions with the goal of improving both the number of transactions
and the size of the basket with some of our most loyal customers.
Along the way, we continued to invest in our business … investing nearly $110 million in stores, both new and existing,
distribution centers, technology, and new enterprisewide systems, all with an eye toward supporting the company’s future
growth. Bottom line: In 2010, we grew operating profit dollars and EPS and recorded our 4th consecutive record year of
results. We generated $200 million of cash flow. We invested in our business and returned a large allocation of capital to
you in the form of stock repurchases. We invested $342 million to repurchase 10.5 million shares, or 13% of the company,
at an average price of less than $33 per share.
Maximizing Value
I came to Big Lots with a passion to lead the company on a long-term journey by taking a truly unique retail model and
repositioning certain of its strategies with a vision of long-term, sustainable shareholder returns. A strategy is nothing more
than a business word for “choices.” Whether you run a small business or a Fortune 500 company, if the choices you make are
based on knowing your customers’ needs and leveraging your own unique strengths or niche, I believe you’ll succeed. During
my tenure, we have remained incredibly consistent and focused on the Big Lots strategy. We have not veered or been tempted
to become something we are not, and the results of the last 5 years have been pretty rewarding:
Grew EPS to $2.83 in fiscal 2010 from $0.14 in fiscal 2005
Grew operating profit dollars to $357 million in fiscal 2010
from $27 million in fiscal 2005
Generated cash flow of over $1.2 billion
Reinvested over $370 million in stores, systems, and
infrastructure to support future growth
Returned over $1.2 billion to shareholders by repurchasing
over 52 million shares, or nearly 45% of the company, at a
weighted average price of less than $24 — a pretty wise
investment considering where the stock was trading at the
time of this letter.
A tremendous amount of progress and financial return have occurred,
and there is no doubt that we are bringing to life our vision for Big Lots.
The investments we have made and our strategic repositioning have
worked, and with the support of 34,000+ associates across the
country, we’re focused on building momentum for the future.
But I believe we are only just beginning, and Big Lots is in a good
position to
create value well into the future. Value can mean
different things, depending on how you’re connected to the company.
Big Lots, Inc. 2010 Annual Report