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Staples Q4 Results Beat Estimates

Staples Q4 Results Beat Estimates
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2/29/2012 7:54 AM ET

Office supplies retailer Staples, Inc. (SPLS: Quote) reported Wednesday a higher profit for the fourth quarter, reflecting a growth in sales, boosted by performance at North American retail and delivery business. Earnings per share and revenues surpassed analysts' expectations.

For full-year 2012, the company assumes slow growth in the U.S. economy and a soft demand environment in Europe, but expects earnings per share to increase in high single-digits, and sales to increase in low single-digits.

During the quarter, North American Delivery segment sales increased 2 percent and North American Retail sales were up 3 percent from last year. Meanwhile, the Framingham, Massachusetts-based world's largest office products company said its sales in international operations declined 5 percent from the prior year.

Commenting on the company's full year, Ron Sargent, chairman and chief executive officer said, "During 2011 Staples celebrated its 25th anniversary with $25 billion in total company sales. We drove strong earnings growth, generated more than $1 billion of free cash flow for the fourth consecutive year, and have solid plans in place to build on our momentum in 2012."

In the fourth quarter, net income attributable to the company increased to $283.59 million or $0.41 per share from $274.74 million or $0.38 per share in the prior-year quarter.

Earnings per share, on an adjusted basis, increased from the prior year. On average, 17 analysts polled by Thomson Reuters expected earnings per share of $0.40 for the quarter. Analysts' estimates typically exclude one-time items.

Quarterly sales grew 1 percent to $6.46 billion from $6.42 billion in the same quarter last year, which also exceeded analysts estimate of $6.45 billion.

For the quarter, North American Delivery segment sales increased 2 percent to $2.5 billion, benefited by double-digit sales growth in facilities and breakroom supplies and strong growth in technology products. North American Retail sales were $2.6 billion, an increase of 3 percent from last year and comparable store sales were up 2 percent.

Sales in international operations segment declined 5 percent to $1.3 billion. According to the company, topline growth in European Contract was more than offset by a 9 percent decrease in comparable store sales in Europe and weak sales in Australia.

Including the impact of the 53rd week in fiscal 2012, the company expects full-year earnings per share to increase in high single-digits, and sales to increase in low single-digits compared to last year. Also, Staples anticipates to generate over $1 billion of free cash flow in 2012.

The company opened 12 stores and closed four stores in the U.S. and opened two stores and closed one in Canada during the period.

SPLS closed Tuesday's regular trading at $16 on the Nasdaq. In the pre-market activity, the shares are up 2.19 percent.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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