Staples' Sales Rise While Office Depot's Drop

By Steve Smith -- TWICE, 3/10/2008

NEW YORK — A tale of two office superstores came to light when both Staples reported higher fiscal fourth-quarter sales, while Office Depot's results were disappointing.

Staples sales reported higher sales for its fiscal fourth quarter, which ended Feb. 2, while Office Depot reported disappointing fourth-quarter sales and earnings.

At Staples, including the impact of an extra week of sales in the fourth quarter of 2006, total company sales grew 1 percent to $5.3 billion. North American retail revenues decreased 4 percent, and North American delivery sales increased 4 percent.

On a GAAP basis, total company net income of $333 million declined slightly from $336 million, compared with the fourth quarter of 2006. Excluding $370 million of sales recorded during the 14th week in the fourth quarter of 2006, total company sales for the fourth quarter increased 8 percent to $5.3 billion compared with the same quarter of 2006.

Excluding North American retail sales of $209 million and North American delivery sales of $130 million recorded during the extra week in the fourth quarter of 2006, North American retail sales increased 4 percent, and North American delivery sales increased 12 percent.

Comp-store sales for the fourth quarter decreased 6 percent in North American retail.

At Office Depot total company sales for the fourth quarter, ended Dec. 29, 2007, were up 1 percent to $3.9 billion. Total company net earnings were $19 million compared with earnings of $127 million in the same period of 2006.

Sales in the North American retail division were down 3 percent with comp-store sales down 7 percent for the quarter. The chain said results continue to be negatively impacted by difficult housing-related economic conditions in key markets, particularly Florida and California.

Operating profit in the North American retail division was $23 million for the fourth quarter, a decline from $109 million in the same period of the prior year. Although costs were managed effectively in the fourth quarter, broader economic factors continued to pressure profit margins, which decreased 490 basis points vs. the fourth quarter 2006, the firm said.