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Staples N.A. Comps Rise

3/04/2004 02:00:00 AM Eastern

Framingham, Mass. — Fiscal fourth quarter North American comp-store sales exceeded expectations at office products retailer Staples, climbing 4 percent.

At the same time, the chain recorded a 9 percent increase in fourth quarter North American sales, reaching $2.3 billion, from $2.1 billion in the same three months a year ago.

The company’s North American retail segment enjoyed operating profit of $220.3 million in the fourth quarter, ended Jan. 31, up from $172.6 million year-on-year.

For the 12 months, Staples North American store comps also increased 4 percent, with segment sales jumping over 8 percent, to $7.8 billion, from $7.1 billion the previous year. Operating income for North America over the 12 months totaled $523.6 million, compared with $413.9 million a year earlier.

Staples, which cited a new 14,600-square-foot store model — with fewer SKUs and a lower cost labor factor that drove attractive returns with lower volume stores — as a key company accomplishment in 2003, enjoyed consolidated fourth quarter sales of 10 percent, hitting $3.7 billion, from $3.3 billion year-on-year.

Consolidated fourth quarter net income increased 29 percent, reaching $211.9 million, compared with $164.7 million in the same period a year earlier. Operating margin rose to 9.3 percent, the best quarterly performance in Staples’ history.

For the 12 months, Staples consolidated sales soared 14 percent, reaching $13.2 billion, up from $11.6 billion in the previous year. Net income rose 10 percent, to $490.2 million, from $446.1 million.

For the fiscal year, pro forma net income climbed to $552 million, which excludes an adjustment that reduced the retailer’s first quarter 2003 net income by $62 million. Pro forma net income increased 32 percent from 2002, excluding a non-recurring $29 million tax benefit in the first quarter of 2002.

Revenue is expected to increase about 10 percent in the current fiscal first quarter and fiscal year, with North American retail comps reaching low single-digit increases.

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