Staples Inc. (NASDAQ: SPLS) reported fourth-quarter and full-year 2015 results before markets opened Friday morning. For the quarter, the big box office supply retailer posted adjusted diluted earnings per share (EPS) of $0.26 and $5.27 billion in revenues. In the same period a year ago, Staples reported EPS of $0.31 on revenue of $5.66 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.28 and $5.41 billion in revenue.
For the full year, Staples reported EPS of $0.89 and revenues of $21.06 billion, compared with 2014 EPS of $0.96 and revenues of $22.49 billion. Analysts had estimated EPS of $0.91 and revenues of $21.17 billion.
The company noted that GAAP earnings included a $172 million fourth-quarter charge primarily related to the company’s proposed acquisition of Office Depot Inc. (NYSE: ODP). U.S. and Canadian regulators have blocked the transaction and the two companies have contested that decision. The federal district court is expected to rule by May 10, 2016. European regulators approved the transaction in February, provided that the companies divest certain assets.
CEO Ron Sargent said:
In 2015, our top priority was to stabilize total company sales and earnings after a few years of heavy investment to transform Staples. While our Q4 results came in at the lower end of our expectations, we continued to make good progress on many of our key initiatives, and we have a solid plan to get back to earnings growth in 2016.
In its outlook comments, Staples said it expects sales to decrease in the first quarter compared with first-quarter 2015 sales. Adjusted diluted EPS are pegged at $0.16 to $0.18, which includes the impact of the strong U.S. dollar. The guidance does not include any costs related to the Office Depot acquisition and store closures. The company plans to close about 50 North American stores in 2016 and expects to generate approximately $600 million of free cash flow, excluding any costs associated with the Office Depot acquisition.
The consensus first-quarter estimates call for EPS of $0.17 and revenues of $5.14 billion, about 2.3% below revenues in the year-ago first quarter. For the full year, analysts are looking for EPS of $0.92 and revenues of $20.78 billion.
Shares closed up about 1.8% on Thursday, at $9.87, and were inactive in premarket trading Friday. The stock’s 52-week range is $8.04 to $17.04. Thomson Reuters had a consensus analyst price target of $13.33 before the results were announced.
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