Staples Inc. (SPLS), the global leader in the supply of office products, recently reported fourth-quarter 2009 financial results that remained in line with the Zacks Consensus Estimate.
The quarterly earnings of 38 cents a share rose 5.6% from 36 cents posted in the prior-year quarter. Management now expects first-quarter 2010 earnings in the range of 25 cents to 27 cents and fiscal year 2010 earnings between $1.23 and $1.33 per share.
Staples’ earnings surprise history compared to the Zacks Consensus Estimate for the preceding four quarters varies between negative 14.3% and positive 4.8%, with the average being negative 2.3%.
On a reported basis, including one-time items, earnings came in at 32 cents, down 20% from 40 cents delivered in the year-ago quarter. On a reported basis, earnings for the first-quarter 2010 are expected between 22 cents and 24 cents, and between $1.18 and $1.28 per share for fiscal year 2010.
Total sales for the quarter climbed 3.8% year-over-year to $6,406.1 million, boosted by Staples’ improving North American Retail and International operations. The office products retailer, which expects a modest recovery in 2010, forecasts sales to rise in the mid-single digit in the first quarter and to ascend low-single digit in fiscal year 2010.
Revenues by Segment
North American retail sales grew 7.5% to $2,573.7 million, 4.1% in local currency. Comparable store sales rose 3% versus the prior-year quarter due to traffic improvement and rise in sales of basic items such as ink, toner and computers, offset by sluggish demand registered in business machines, furniture and other durable products.
International sales climbed 6.7% to $1,407.6 million but fell 6.3% in local currency. North American delivery sales tumbled 1.5% to $2,424.8 million and dropped 2.5% in local currency.
Staples generated free cash flow of $1.8 billion during fiscal year 2009, which was used to reduce debt by $875 million during the year. Capital expenditure for the year was $313 million. The company ended the quarter with cash and cash equivalents of $1,415.8 million, long-term debt of $2,500.3 million, and shareholders’ equity of $6,771.9 million (excluding non-controlling interest).
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