Staples Inc. (NASDAQ: SPLS) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, March 2, 2011. Analysts, on average, expect the company to report earnings of 40 cents per share on revenue of $6.48 billion. In the year ago quarter, the company reported earnings of 38 cents per share on revenue of $6.41 billion.
Staples, Inc., together with its subsidiaries, operates as an office products company. The Company, along with its subsidiaries, offers a range of office products, including supplies, technology, furniture and business services.
In the preceding third quarter, the Framingham, Massachusetts based company's net income was $288.7 million, or 40 cents per share, from $269.4 million, or 37 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 41 cents per share in the latest quarter. Revenue increased to $6.54 billion from $6.52 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 40 cents per share on revenue of $6.54 billion.
At its last earnings call in November, the company said that it expects fourth quarter sales to increase in the low single-digits compared to the fourth quarter of 2009. The company expects to achieve earnings per share, on a GAAP basis, in the range of 38 cents to 40 cents for the fourth quarter of 2010. Excluding approximately $8 million of pre-tax integration and restructuring expense, or approximately $0.01 per shars, the company expects to achieve adjusted earnings per share for the fourth quarter of 2010 in the range of 39 cents to 41 cents.
Further, the company raised its fiscal 2010 forecast. For the full year 2010, the company expects total company sales to increase in the low single-digits compared to the full year 2009. The company expects to achieve earnings per share, on a GAAP basis, in the range of $1.22 to $1.24 for the full year 2010. Excluding approximately $60 million of pre-tax integration and restructuring expense, or $0.05 per share, the company expects to achieve adjusted earnings per share for the full year 2010 in the range of $1.27 to $1.29. Staples' previous projection was GAAP earnings in the range of $1.20 to $1.24 per share and adjusted earnings in the range of $1.25 to $1.29 per share.
For the full year 2011, the company expects to achieve total company sales growth in the low to mid single-digits, and earnings per share in the range of $1.50 to $1.60. The company expects full year 2011 earnings per share to benefit from the ongoing integration of corporate Express, growth in high margin services business, reduced interest expense, share repurchases, as well as the expectation that its effective tax rate will return to approximately 34.5 percent. The company expects to generate more than $1 billion in free cash flow next year after spending about $500 million in capital expenditures as we invest in the supply teams, systems, new stores, as well as our growth initiatives.
Office-supply retailers, which saw corporate clients and other shoppers turn frugal in the recession, are finally seeing customers return as the economy improves. Being a leading retailer of office products and services, Staples is better positioned than its competitors to benefit from the economic recovery, and is poised to sustain its growth momentum based on margin expansion, effective merchandising and growth prospects across its retail and delivery divisions. To increase its margin, Staples has increased the mix of private label offerings (i.e., Staples brand products) and emphasized the purchase of products directly from manufacturers instead of distributors.
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