Staples N.A. Comps Rise

By Jeff Malester On Mar 22 2004 - 8:00am

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 a consolidated fourth quarter sales increase 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.