STAPLES NET INCOME FALLS
STAPLES NET INCOME FALLS
2008-03-05 at 2:50:18 pm #21843
Staples Net Income Falls 1% on Lower Retail Sales (Update3)
08 — Staples Inc., the world’s largest office-supplies retailer, said
fourth-quarter profit fell 1 percent on lower North American retail
sales and cut its annual forecast.Net income declined to $333.2
million, or 47 cents a share, the Framingham, Massachusetts-based
company said today in a statement. Profit met some analysts’ estimates.
Revenue for the three months ended Feb. 2 rose less than 1 percent to
$5.32 billion, missing analysts’ projections.
Sales at U.S. and
Canadian stores open at least a year dropped 6 percent. Office-supply
retailers’ sales have slowed as customers concerned about a declining
job market and the worst housing slump in a quarter century reduced
purchases of copiers and desks. Staples said it is “more guarded” in
its outlook for the year and same-store sales may continue to decline.
as good an operator as they are, they’re not immune to the weakness in
the economy,” said Walter Todd, who helps manage $800 million for
Greenwood Capital Associates LLC in Greenwood, South Carolina. North
American retail is “the most economically sensitive area of their
business,” he said.
The retailer predicted a “mid
single-digit” percentage increase in sales and “high single-digit”
percentage growth in earnings per share for the year ending next Jan.
31. Staples said in November that it expects earnings per share this
year to increase by a percentage in the “low teens,” with “high
single-digit” sales growth.
Staples fell 45
cents, or 2 percent, to $22.04 at 10:21 a.m. New York time in Nasdaq
Stock Market composite trading. The stock lost 2.5 percent of its value
this year through yesterday, compared with a 20 percent decline for
Office Depot Inc., the second-largest office-supplies retailer.Staples
also increased its annual dividend 14 percent to 33 cents a share. The
retailer operates 2,038 stores worldwide and sells office supplies in
North American retail sales dropped 3.9 percent to
$2.8 billion. Revenue at the unit that sells office supplies directly
to North American companies increased 3.6 percent to $1.72 billion.
International sales climbed 13 percent, helped by the dollar’s
decline.Analysts estimated fourth-quarter profit of 47 cents a share,
the average projection of 16 analysts surveyed by Bloomberg. Eleven
analysts, on average, estimated sales of $5.4 billion. Per-share
earnings were boosted by a lower number of outstanding shares.In the
year-earlier quarter, net income was $336.5 million, or 46 cents a
Corporate Express Bid
Staples last month made an
unsolicited offer to buy Corporate Express NV, the world’s biggest
distributor of office supplies, for 1.33 billion euros ($2.02 billion).
Amsterdam- based Corporate Express rejected the proposal, saying in a
statement that it “significantly” undervalues the company.The
takeover of Corporate Express, whose U.S. sales account for more than
half its revenue, would bolster Staples’ division that sells office
supplies directly to companies. Staples Chief Executive Officer Ron
Sargent said on a conference call the company offered a “fair” price
for Corporate Express, without giving more details.Last week Office
Depot said fourth-quarter profit plunged 85 percent. Revenue declined
both for the North American retail and direct sales divisions and North
American same-store sales dropped 7 percent. Chief Executive Officer
Steve Odland said U.S. and U.K. sales this quarter-to-date “remain
sluggish.”“They outperformed their office-supply competitors,” Todd
said today in an interview. “Even if looking at the lowered guidance
for 2008, relative to retail broadly speaking, it’s pretty good.” The
firm holds 210,000 Staples shares.