Staples, Inc. (NASDAQ:SPLS) Reports Messy 4Q But 2011 Outlook intact

Staples, Inc. (NASDAQ:SPLS) reported fourth fiscal quarter results on Monday which misses analysts' expectation but 2011 guidance in line with expectation. Net income for the fourth fiscal quarter rose to $274.7 million or 38 cents per share, up 17.44% from $233.9 million or 32 cents per share, a year earlier. The company blames the weak quarter on the poor weather conditions around the U.S. during the quarter, but states that the net income increase was due to lower operating expenses. Adjusted EPS arrived at 39 cents, below the consensus of 40 cents a share. A lower-than-expected tax rate benefited the quarter by 6 cents a share, while the inclement weather reduced earnings by 5 cents a share. Revenue during the quarter climbed 1% to $6.42 billion, missing analysts’ estimate of $6.48 billion. The sales were driven by a 2% comp decline in North American Retail, a 2.7% increase in the North American Delivery business and a 3% decrease in International. This decline in comp was hurt by bad weather and weak demand for computers. The storms caused the company to miss out on $70 million in sale. Gross margin decreased 60 basis points year over year to 26.8% versus 27.7% consensus driven by de-leverage on lower sales due to the winter storms and related promotional activity (primarily at the retail level).  SG&A dollar growth was roughly in-line at 1.7% vs. 1.5% consensus, but the total operating expense rate de-levered 10 basis points to 20.0% versus 19.9% Last Year due to sales weakness, higher incentive compensation, and investments in growth initiatives. The Company announces first fiscal quarter sales guidance is in line, but EPS is projected at $0.30-$0.32 compared to consensus of $0.33. For the full year, guidance was maintained at $1.50-$1.60, including share buybacks and lower interest, on low to mid single digit sales growth. This is exactly in line with company's previous outlook and in line with consensus of $1.55 and sales growth of 3.5%. Shares of an office products company went up by 4 cents or 0.19% to $20.90 after the company posted its fourth quarter financial results. Volume of 20.44 million shares has been posted compared to the daily average of 7.78 million shares. The stock has 52 week range of $17.45-$25.00. The market capitalization of the stock stands at $15.11 billion with beta of 0.83. The Company, along with its subsidiaries, offers a range of office products, including supplies, technology, and furniture and business services. It serves customers of all sizes in 25 countries throughout North and South America, Europe, Asia and Australia. Disclaimer: The assembled information distributed by epicstockpicks.com is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. Epicstockpicks.com does expect that investors will buy and sell securities based on information assembled and presented herein. EpicStockPicks.com will not be responsible in any way for or accept any liability for any losses arising from an investor's reliance on or use of information obtained from our website or emails. PLEASE always do your own due diligence, and consult your financial advisor.
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