SPLS 2009 Q4 Earnings - by BetterTrades

As consumers continue to curtail their spending habits, the retail sector has taken severe losses over the past several quarters. Without exception, Staples Inc. (SPLS) was affected by these happenings, as the company’s profits declined in the 4Q despite an increase in overall sales.

For the recent period, Staples recorded net earnings of $286M, or $0.40 per share, in contrast to last year’s profits of $333.2M, or $0.47 per share, a decrease in net income of more than 14% year-over-year. Results were influenced by last summer’s acquisition of a Dutch rival Corporate Express N.V., which greatly affected the bottom-line.

Meanwhile, the company’s overall revenues during the period advanced nearly 16% over last year’s totals, climbing from $5.32B to $6.17B, helped by the addition of Corporate Express. On average, analysts were looking for the office supply company to post quarterly earnings of $0.42 per share on total revenues of $6.82B.

"In both good times and bad our job is to deliver the positive results that our shareholders expect," stated Chairman and CEO Ron Sargent. "And while we're not satisfied with our absolute results, our relative performance has never been stronger."

In addition, Staples saw their same store sales figures plummet 13% during the quarter as customers and businesses spent less on office supplies, computers, furniture and accessories.

Looking deeper into the numbers, the company’s North American delivery units saw sales increase 43% to total $2.5B in revenues. Taking out the impact of Corporate Express sales, the unit would have posted a decline in sales of 10% to $1.6B.

North American retail sales slipped 14% to $2.4B, while International sales surged more than 62% to total $1.3B in revenues. Nevertheless, if Corporate Express revenues were excluded from the results, foreign sales would have dropped 24%.

For the year, Staples viewed their profits decline year-over-year, falling more than 19%, from $995.7M, or $1.38 per share to $805.3M, or $1.13 per share. Furthermore, the company did manage to post higher revenues over the previous year’s tally, posting annual sales of $23.08B, up more than 19% from the prior year’s 19.37B.

With the economic condition remaining quite difficult for retailers, Staples did not offer any forward-looking projections. However, the company did announce that they have declared a dividend for the quarter of $0.0825 per share. Shareholders of record on March 27 will be entitled to the payout. On an annualized basis, the dividend equates to $0.33 per share for the year, equal to the previous year’s dividend payout.

By the end of Wednesday’s trading session, shares of Staples had ventured in and out of negative territory throughout the day, finally settling down $0.21, or 1.3%, to close at $15.53 per share. Over the past year, shares of SPLS have ranged between $13.57 and $26.57 per share.

By BetterTrades