Will Staples Q4 Results Beat Estimates?

(RTTNews) - Office products supplier Staples Inc. (SPLS) has been making great progress transforming its commercial business and building increased scale and credibility in categories beyond office supplies. Also, it is developing strong back-to-business plan for early 2016, which will include a simpler price value message and an increased focus on everyday low prices for its new Less List for business.

The company is likely to showcase its fourth-quarter results before the bell on Friday, March 4, with analysts polled by Thomson Reuters estimating earnings of $0.28 per share on revenue of $5.41 billion. Analysts' estimate typically exclude certain special items.

The company expects fourth-quarter sales to decrease from the prior year, and non-GAAP earnings in the range of $0.26 - $0.30 per share.

In the last quarter, net income decreased to $198 million from last year's $217 million. Earnings per share fell to $0.31 from $0.34. The latest results included pre-tax charges of $40 million related to the acquisition of Office Depot, as well as $28 million primarily related to restructuring activities.

Adjusted earnings per share totaled $0.35, while it was $0.37 last year. Analysts expected earnings of $0.35 per share for the quarter.

Sales dropped 6% to $5.59 billion from $5.96 billion. Analysts had a consensus revenue of $5.67 billion. Total company sales were flat, after excluding the impact of store closures during the past year and changes in foreign exchange rates.

Sales fell 7.8% in North American Stores and Online, impacted by 4% due to changes in foreign exchange rates. Store closures also negatively impacted third quarter 2015 sales growth by about 3%. North American Commercial sales edged up 0.7%, reflecting growth in facilities supplies, promotional products, breakroom supplies, and furniture.

Ron Sargent, Staples' chairman and CEO, said, "We're driving solid sales and earnings growth in our North American Commercial business, and stabilizing results in North American Stores and Online. Our strategic reinvention is on track, and we look forward to accelerating the transformation of Staples with the acquisition of Office Depot."

February 10, Staples said it received approval from the European Union to acquire Office Depot on the condition that Staples divest Office Depot's European contract business and all of Office Depot's operations in Sweden. The companies have decided that they will also divest Office Depot's retail, online and catalog operations in Europe in connection with closing the transaction. The merger is the subject of ongoing litigation with the U.S. FTC as well as the Canadian Competition Bureau.