Staples Inc. Announces Third Quarter 2013 Performance
Sales in International Operations for the third quarter of 2013 were $1.0 billon, a decrease of eight percent in U.S. dollars, as well as on a local currency basis, compared to the third quarter of 2012. The sales decline reflects weakness in European delivery, a negative impact of approximately two percent due to 48 European store closures during the 12 months preceding the third quarter of 2013, and to a lesser extent, weakness in Australia. Comparable store sales in Europe declined two percent with modest declines in both traffic and average order size. Operating income rate increased 31 basis points to 0.16 percent compared to the third quarter of 2012. Excluding $16 million of accelerated Australia tradename amortization during the third quarter of 2012, operating income rate decreased 111 basis points. This decline primarily reflects the negative impact of fixed expenses on lower sales, as well as lower product margins in Australia and European delivery, partially offset by reduced marketing and rent expense.
During the third quarter of 2013, the company recorded an after-tax loss from discontinued operations of $85 million related to its European Printing Systems business. This includes a loss of $81 million related to the completion of the sale of this business during the third quarter of 2013, which was primarily non-cash in nature.
The company expects full year 2013 sales to decrease in the low single-digits compared to 2012 sales on a 52-week basis of $23.9 billion. The company expects full year 2013 non-GAAP diluted earnings per share from continuing operations to be in the range of $1.21 to $1.25. The company's full year non-GAAP diluted earnings per share estimate excludes the charges incurred during the third quarter of 2013 related to severance expense and other associated restructuring activities. The company expects to generate more than $900 million of free cash flow and plans to continue repurchasing its common stock through open-market purchases during 2013.