Big Lots, Inc. (NYSE:
BLI) today reported retail sales for the five weeks ended October 1, 2005 of
$385.3 million, a 7.7% increase compared to retail sales of $357.6 million for
the same period in fiscal 2004. Comparable store sales for all stores open at
least two years as of the beginning of the fiscal year increased 2.9% in
September, with the value of the average basket increasing 4.5% and the number
of customer transactions decreasing 1.6%.
(Logo: http://www.newscom.com/cgi-bin/prnh/20011026/BIGLOTSLOGO )
Retail sales increased 6.8% to $690.8 million for the nine-week quarter to
date period ended October 1, 2005, compared to $646.8 million for the same
period in fiscal 2004. Comparable store sales increased 1.9% for the quarter
to date period with the value of the average basket increasing 4.8% and the
number of customer transactions decreasing 2.9%.
For the thirty-five week year to date period ended October 1, 2005, retail
sales increased 6.7% to $2,817.1 million, compared to $2,639.0 million for the
same period in fiscal 2004. Comparable store sales increased 1.5% for the
year to date period with the value of the average basket increasing 4.3% and
the number of customer transactions decreasing 2.8%.

Comparable 2005 Comparable
Retail Sales ($ in millions) Store Sales Store Sales Detail
2005 2004 Change 2005 2004 Customers Basket

September $385.3 $357.6 7.7% 2.9% -2.1% -1.6% 4.5%

Quarter
to Date $690.8 $646.8 6.8% 1.9% -2.1% -2.9% 4.8%

Year to
Date $2,817.1 $2,639.0 6.7% 1.5% 0.6% -2.8% 4.3%

September's comparable store sales increase of 2.9% was driven by a
successful advertising circular early in the month and continued strength in
the average basket. From a merchandise perspective, consumables and furniture
were the strongest categories and comprised the majority of the basket
increase for the month. Consumables benefited from a broad selection of
recently delivered closeout merchandise in the food, paper, plastics, and
household chemicals categories. The Company's furniture departments enjoyed
double digit increases as a result of improved inventory position and
assortment.
The reported 1.9% increase in comparable store sales for the nine-week
quarter to date period is consistent with the Company's current expectations

for the third quarter where comparable store sales are estimated to increase
in the range of 1% to 3%.

WIN Strategy Update
Commenting on the Company's progress of its recently announced WIN
strategy, Steven S. Fishman, Chairman and Chief Executive Officer stated, "In
August, we indicated we were in the discovery phase of developing a new
strategy referred to as WIN, or What's Important Now. WIN will involve
tactical plans to improve the financial performance of the business over the
next twelve to eighteen months and is focused on three key areas: operating
expenses, merchandising, and real estate. I committed to you that as the
strategy is developed and decisions are made that we will update you on our
progress. Today, we are sharing some initial actions involving our
merchandising and real estate strategies and providing further clarity around
our timeline for communicating a complete WIN strategy."

Operating Expenses
The Company's current cost structure is highly fixed in nature with a
comparable stores sales leverage point that has steadily improved in recent
years. However, given the disappointing sales results in 2004 and 2005
coupled with the Company's investment in store remodels, distribution centers,
and new stores, the expense rate as a percent of sales has increased.
Therefore, the Company is in the process of critically reviewing its overall
cost structure and expects to communicate its findings and potential future
expense savings opportunities in November.

Merchandising
The Company's merchandising strategy remains in the developmental phase.
Nevertheless, the Company has identified incremental markdowns that will be
necessary to lower in-store inventory levels and improve inventory sell-thru.
While a markdown strategy and timing of execution has not been finalized, the
Company anticipates the pre-tax impact of the incremental markdowns and
related costs will not exceed $28 million, or $0.15 per share, and will be
incurred throughout the balance of 2005.

Real Estate
New store openings for the Company have historically been very
opportunistic in nature and not market specific. In recent quarters, the
profitability of new stores has slowed due to the softness in Company sales
and gross margin trends coupled with pressures of higher occupancy costs and
capital required to open stores in a challenging real estate market. While
the details of the new store real estate strategy will be communicated in
November, the Company expects to develop a market specific strategy where the
store size and costs will be tailored to match the estimated store or market
potential. Based on this potential shift to a more market specific strategy,
the Company will open fewer new stores than originally planned for the balance
of 2005 and net new store growth is expected to be minimal in 2006, as the
Company focuses on improving the sales and profitability of its current
stores.
The Company regularly reviews profit and cash flow results on a store-by-
store basis in order to identify under-performing stores, review lease
terminations and renewals, estimate future store closings, and test for the
impairment of assets. At the end of fiscal 2004, this review led to a fiscal
2005 store closing estimate of approximately 40 stores. As a key component of
the Company's WIN strategy, the Company has reviewed its entire fleet of over
1,500 stores paying particular attention, in light of recent Company
performance, to a growing number of marginally performing stores in weaker or
less densely populated markets.
This critical store-by-store review has led the Company to decide to close
approximately 85 additional closeout stores by the end of fiscal 2005. The
Company's analysis suggests the cash flow impact is slightly positive to close
these stores in January 2006 when compared to leaving the stores open through
the balance of their lease terms. Similar to total Company, these stores were
originally planned for profit improvement in 2005; however, the Company now
forecasts that current year performance in this group of 85 stores will
actually decline and result in four wall pre-tax operating losses of
approximately $9 million, or $0.05 per share. These 85 stores represent
approximately 6% of the Company's closeout store base while accounting for
approximately 4% of sales in closeout stores. These additional stores tend to
be lower volume, located in small, rural, or weaker performing markets with
low population densities per store. On a regional basis, the Midwest will
incur the largest number of closings while very few closings are expected to
occur in the Company's strongest markets (West and Southeast) or new markets
(Northeast and Pacific Northwest).
Additionally, the Company has indicated its intent to close its 41 stand-
alone furniture stores by the end of fiscal 2005. In recent years, the total
sales growth of the Company's furniture category has been the result of the
rapidly growing number of furniture departments in new and existing closeout
stores, not from the stand-alone furniture stores. Furniture sales within
existing closeout stores represent approximately 12% of total Company sales
and will continue to be a key differentiator for the Company in comparison to
other value retailers. Stand-alone furniture store sales represent less than
1% of total Company sales and recently have been generating operating losses.
Closing these stand-alone furniture stores is expected to improve future
annual operating profit by approximately $0.01 per share, lower inventory
investment, and focus the Company's resources on the more profitable furniture
departments in closeout stores.
The closing of approximately 85 closeout stores along with the 41 stand-
alone furniture stores are incremental to the 40 stores the Company had
already anticipated closing in fiscal 2005 as part of the ordinary course of
its business and is expected to result in a total of 165 to 170 total store
closings for the year. Based on the combination of fewer new store openings
mentioned earlier in this release and the incremental store closings for
fiscal 2005, the Company now anticipates ending fiscal 2005 with approximately
1,400 stores.
The Company estimates the pre-tax charges related to the incremental store
closings (closeout and stand-alone furniture) will be approximately $60
million, or $0.35 per share. The table below summarizes the type of expenses
and identifies the cash components:

Cost ($ millions) Total Non-Cash 2005 Cash Future Cash

Lease Related Obligations $28.0 $28.0
Inventory Liquidation $21.0 21.0
Asset Write-downs $7.0 $7.0
Severance and Other $4.0 $4.0

Total $60.0 $28.0 $4.0 $28.0

In the table above, "2005 Cash" means that the expense will require
payment of cash in fiscal year 2005, and "Future Cash" relates to the
settlement of lease obligations over their scheduled lease terms. Asset
write-downs include assets used in normal operations of retail stores and
include remaining unrecoverable net book values of fixtures, racking,
equipment, signs, etc. The table does not include the cash impact of the tax
benefit, which generally will be realized when the lease obligation is paid,
or the asset is disposed of or sold.

2005 Guidance
Certain WIN related costs, such as the lease obligations, asset write-
down, and severance costs related to store closings, can be reasonably
estimated by fiscal quarter for the balance of 2005. However, the
calendarization is less certain when estimating the incremental markdowns
surfaced through our merchandising strategy development or the markdowns which
will be taken as part of the store closing process, as these decisions will be
made throughout the balance of the fiscal year based on weekly sales and a
targeted merchandise exit date. Additionally, research has begun and should
be completed by the end of the third fiscal quarter regarding how these
incremental charges may impact the Company's ability to realize certain state
income tax net operating loss carryforward benefits. Given the materiality
and uncertainty surrounding the timing of the WIN related charges discussed in
this release and the corresponding impact on the Company's effective income
tax rate, the Company has discontinued forward looking earnings guidance until
such point that more facts or assumptions are known and can be reasonably
quantified. Accordingly, earnings guidance previously provided by the Company
should no longer be relied upon.

Hurricane Katrina and Hurricane Rita Update
Hurricanes Katrina and Rita have significantly impacted the Gulf Coast
region of the country and hundreds of Big Lots associates. The Company has
been in contact with all store management and district management associates;
however, the Company has been unable to determine the status of several store
associates. The Company's Emergency Hot Line at 1-866-834-7325 remains
available so the Company can provide assistance to any displaced Big Lots
associates.
The Company estimates lost sales from store closings that occurred as the
hurricanes came inland were offset by the pre-hurricane preparation sales that
occurred in days immediately preceding the events. As of October 5, the
Company reported 10 stores remained closed, 7 from Katrina and 3 from Rita.
Of the 10 stores, it appears that 4 stores will reopen in the next several
weeks and 6 stores could be a total loss or could take up to several months to
rebuild. The Company anticipates any losses, such as merchandise, furniture
and fixtures and business interruption, that occurred as a result of these
hurricanes will be substantially covered by insurance proceeds.

Big Lots, Inc. is the nation's largest broadline closeout retailer. The
Company currently operates a total of 1,536 stores in 47 states operating as
BIG LOTS and BIG LOTS FURNITURE. Wholesale operations are conducted through
BIG LOTS WHOLESALE, CONSOLIDATED INTERNATIONAL, WISCONSIN TOY and with online
sales at http://www.biglotswholesale.com. The Company's website is located at
http://www.biglots.com.

Cautionary Statement Concerning Forward-Looking Statements for Purposes of
"Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995
The Private Securities Litigation Reform Act of 1995 (the "Act") provides
a "safe harbor" for forward-looking statements to encourage companies to
provide prospective information, so long as those statements are identified as
forward-looking and are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those discussed in the statements. The Company wishes to take
advantage of the "safe harbor" provisions of the Act.
This release, as well as other verbal or written statements or reports
made by or on the behalf of the Company, may contain or may incorporate
material by reference which includes forward-looking statements within the
meaning of the Act. By their nature, all forward-looking statements involve
risks and uncertainties. Statements, other than those based on historical
facts, which address activities, events, or developments that the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
business strategy, expansion and growth of the Company's business and
operations, future earnings, store openings and new market entries,
anticipated inventory turn, and other similar matters, as well as statements
expressing optimism or pessimism about future operating results or events, are
forward-looking statements, which are based upon a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate. The
words "believe," "anticipate," "project," "plan," "expect," "estimate,"
"objective," "forecast," "goal," "intend," and similar expressions generally
identify forward-looking statements. The forward-looking statements are and
will be based upon management's then-current views and assumptions regarding
future events and operating performance, and are applicable only as of the
dates of such statements. Although the Company believes the expectations
expressed in forward-looking statements are based on reasonable assumptions
within the bounds of its knowledge of its business, actual events and results
may materially differ from anticipated results described in such statements.
The Company's 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 the Company's business,
financial condition, results of operations, or liquidity. These factors may
include, but are not limited to:

* the Company's ability to source and purchase merchandise on favorable
terms;
* interruptions and delays in merchandise supply from the Company's and
its vendors' foreign and domestic sources;
* risks associated with purchasing, directly or indirectly, merchandise
from foreign sources, including increased import duties and taxes,
imposition of more restrictive quotas, loss of "most favored nation"
trading status, currency fluctuations, work stoppages, transportation
delays, foreign government regulations, political unrest, natural
disasters, war, terrorism, and trade restrictions including
retaliation by the United States against foreign practices;
* the ability to attract new customers and retain existing customers;
* the Company's ability to establish effective advertising, marketing,
and promotional programs;
* economic and weather conditions which affect buying patterns of the
Company's customers;
* changes in consumer spending and consumer debt levels;
* the Company's ability to anticipate buying patterns and implement
appropriate inventory strategies;
* continued availability of capital and financing on favorable terms;
* competitive pressures and pricing pressures, including competition
from other retailers;
* the Company's ability to comply with the terms of its credit
facilities (or obtain waivers for noncompliance);
* significant interest rate fluctuations and changes in the Company's
credit rating;
* the creditworthiness of the Company's former KB Toys business;
* the Company's indemnification and guarantee obligations with respect
to approximately 390 KB Toys store leases and other real property
leases, some or all of which may have been rejected or materially
modified in connection with the KB Toys bankruptcy proceedings, as
well as other potential costs arising out of the KB Toys bankruptcy;
* litigation risks and changes in laws and regulations, including
changes in accounting standards, the interpretation and application of
accounting standards, and tax laws;
* transportation and distribution delays or interruptions that adversely
impact the Company's ability to receive and/or distribute inventory;
* the impact on transportation costs from the driver hours of service
regulations adopted by the Federal Motor Carriers Safety
Administration that became effective in January 2004;
* the effect of fuel price fluctuations on the Company's transportation
costs and customer purchases;
* interruptions in suppliers' businesses;
* the Company's ability to achieve cost efficiencies and other benefits
from various operational initiatives and technological enhancements;
* the costs, interruptions, and problems associated with the
implementation of, or failure to implement, new or upgraded systems
and technology;
* the effect of international freight rates and domestic transportation
costs on the Company's profitability;
* delays and costs associated with building, opening, and modifying the
Company's distribution centers;
* the Company's ability to secure suitable new store locations under
favorable lease terms;
* the Company's ability to successfully enter new markets;
* delays associated with constructing, opening, and operating new
stores;
* the Company's ability to attract and retain suitable employees; and
* other risks described from time to time in the Company's filings with
the SEC, in its press releases, and in other communications.

The foregoing list is not exhaustive. There can be no assurances that the
Company has correctly and completely identified, assessed, and accounted for
all factors that do or may affect its business, financial condition, results
of operations, and liquidity. Additional risks not presently known to the
Company or that it believes to be immaterial also may adversely impact the
Company. Should any risks or uncertainties develop into actual events, these
developments could have material adverse effects on the Company's business,
financial condition, results of operations, and liquidity. Consequently, all
of the forward-looking statements are qualified by these cautionary
statements, and there can be no assurance that the results or developments
anticipated by the Company will be realized or that they will have the
expected effects on the Company or its business or operations.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. The Company undertakes no
obligation to publicly release any revisions to the forward-looking statements
contained in this release, or to update them to reflect events or
circumstances occurring after the date of this release, or to reflect the
occurrence of unanticipated events. Readers are advised, however, to consult
any further disclosures the Company may make on related subjects in its public
announcements and SEC filings.