Most Popular Service Sector of Fiscal 2013 : Staples Inc. (SPLS)

New York, NY -- (SBWIRE) -- 03/06/2013 -- Staples (NASDAQ:SPLS) is the world’s largest office products company and second largest internet retailer. For 26 years, Staples has served the needs of business customers and its vision is to provide every product businesses need to succeed. Through its world-class retail, online and delivery capabilities, Staples offers office supplies, technology products and services, facilities and breakroom supplies, furniture, copy and print services and a wide range of other product categories. With thousands of associates worldwide dedicated to making it easy for businesses of all sizes, Staples operates throughout North and South America, Europe, Asia, Australia and New Zealand. The company is headquartered outside Boston.

Total sales increased 3% year over year to $6,568 million, but missed the Zacks Consensus Estimate of $6,703 million. Moreover, excluding the impact of an additional week, sales declined 4.2% year over year to $6,107 million.

The company’s gross profit remained flat at $1,719.4 million during the quarter. However, gross margin contracted 80 basis points to 26.2%. Adjusted operating profit increased 5.5% to $495 million, whereas adjusted operating margin improved 18 basis points to 7.5% during the quarter.

The office supply retailers are going through a rough patch as a decline in business and consumer spending in the wake of the global meltdown has resulted in sluggish demand for big-ticket items such as business machines, furniture and other durable products.

Sales at North Stores and Online, which include its retail stores and Staples.com divisions in the U.S. and Canada, increased 3.1% year over year to $3,298 million, reflecting increased sales of facilities and Breakroom supplies, tablets, e-readers and copy and print services, partly offset by revenue declines in digital cameras, computers and software sales.

Staples Inc. (NASDAQ:SPLS) reported fourth quarter adjusted net income from continuing operations of $0.46 per share Wednesday morning, up from $0.41 per share a year ago. The consensus estimate was for EPS of $0.45. The company expects full year 2013 earnings per share from continuing operations to be in the range of $1.30 to $1.35. Analysts expect the company to report a 2013 profit per share of $1.43.

Staples gapped open lower Wednesday and has continued to decline in early trade. The stock is now down 0.90 at $12.39. Staples has fallen in a month and a half low and has dropped below its 50-day moving average.

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