Staples shows economy is improving ... slowly
FRAMINGHAM, Mass. — When people are working -- whether at a small business or large corporation -- they need office supplies, so when a company such as Staples delivers a retail sales increase for the fourth quarter, it is good sign that the economy is improving.
The company reported that North American retail sales for the fourth quarter of 2011 were $2.6 billion, an increase of 3% compared with the fourth quarter of 2010. Comparable-store sales for the quarter were up 2%, reflecting higher average order size and a slight increase in customer traffic.
During the fourth quarter, the company opened 12 stores and closed four stores in the United Statesand opened two stores and closed one store in Canada.
Total sales for the fourth quarter of 2011 increased 1% to $6.5 billion compared with the fourth quarter of 2010. Net income for the fourth quarter of 2011 increased 3% year-over-year to $284 million. Diluted earnings per share, on a GAAP basis, increased 8% to 41 cents from 38 cents achieved in the fourth quarter of 2010, and increased 5% compared with adjusted diluted earnings per share of 39 cents achieved in the fourth quarter of 2010.
Staples also saw growth at its North American Delivery business where sales for the fourth quarter of 2011 were $2.5 billion, an increase of 2% compared with the prior year period. This primarily reflects double-digit sales growth in facilities and breakroom supplies and strong growth in technology products.
Outside of North America, Staples did not perform as well. Sales in international operations for the fourth quarter were $1.3 billion, a decrease of 5% in U.S. dollars and a decrease of 4%t on a local currency basis compared with the fourth quarter of 2010.
For the full year 2011, total company sales increased 2% to $25 billion compared to the full year 2010. Net income increased 12% year-over-year to $985 million, and diluted earnings per share, on a GAAP basis, increased 16% to $1.40 from the $1.21 achieved last year.
“During 2011 Staples celebrated its 25th anniversary with $25 billion in total company sales,” said Ron Sargent, Staples’ chairman and CEO. “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.”
While the U.S. economy may be showing signs of growth, Staples is being cautious with its outlook and expects full-year sales to increase in the low single digits compared with the prior year, and full-year diluted earnings per share to increase in the high single digits versus adjusted diluted earnings per share of $1.37 achieved in 2011.