Big Lots 2012 Annual Report Download - page 87

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investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is
not possible to predict or identify all such factors. Consequently, you should not consider the following to be a
complete discussion of all potential risks or uncertainties.
Our ability to achieve the results contemplated by forward-looking statements is subject to a number of
factors, any one, or a combination, of which could materially affect our business, financial condition, results of
operations, or liquidity. These factors may include, but are not limited to:
The current economic conditions (including commodity price fluctuations and sustained elevated
underemployment) give rise to risks and uncertainties that may adversely affect our capital resources,
financial condition, results of operations, and liquidity including, but not limited to the following:
x Fluctuating commodity prices, including but not limited to diesel fuel and other fuels used to
generate power by utilities, may affect our gross profit and operating profit margins.
x Our expectations regarding the demand for our merchandise may be inaccurate, which could cause
us to under buy or over buy certain categories or departments of merchandise, which could result in
customer dissatisfaction or require excessive markdowns to sell through the merchandise.
x Our customers may experience reduced disposable income due to increases in withholdings
on personal payroll taxes associated with the social security in the United States and other
governmental programs.
x The reaction of our competitors to the marketplace may drive our competitors, some of whom are
better capitalized than us, to offer significant discounts or promotions on their merchandise, which
could negatively affect our sales and profit margins.
x A downgrade in our credit rating could negatively affect our ability to access capital or could
increase the borrowing rates we pay.
If we are unable to continue to successfully execute our operating strategies in our U.S. segment, our
operating performance could be significantly impacted.
There is a risk that we will be unable to meet or exceed our operating performance targets and goals in
the future if our strategies and initiatives are unsuccessful. In 2010, we announced operating performance
targets and goals as part of an updated strategic plan that we intended to use as our roadmap for the future.
We continued to execute on that plan in 2012, which included a growth phase and a continued focus on
merchandising, real estate, and cost structure. During 2012, our senior management performed a review
and provided our Board of Directors with an updated view of our strategic plan for 2013 and beyond. In
December 2012, we announced the intention of our Chairman, Chief Executive Officer and President, Steven
S. Fishman, to retire in 2013, once his successor has been identified. The successful hiring of a new Chief
Executive Officer and the completion of the review our strategic plan could impact our abilities to meet our
operating performance targets. See the accompanying MD&A in this Form 10-K for additional information
concerning our operating strategy.
If we are unable to successfully implement our operating strategies in our Canadian segment, our operating
performance could be significantly impacted.
In 2011, we acquired Liquidation World Inc. as an avenue for entry into the Canadian retail market, which was
not specifically included in the strategic plan announced in 2010, but fell within the growth phase goals of our
overall plan. In 2012, the Company began implementing an operating strategy in Canada similar to that of our
U.S. segment. If we are unable to successfully complete the implementation of this strategy in Canada, such
failure could have a material adverse affect on our consolidated operating performance and the value of our
goodwill and intangibles assets associated with the Canadian segment could be negatively affected. See the
accompanying MD&A in this Form 10-K for additional information concerning our operating strategy.