Top U.S. office supplies retailer Staples Inc
While the fourth quarter was challenging primarily due to the impact of winter storms, sales have recovered in the first quarter of 2011, Chief Executive Officer Ron Sargent said on Wednesday.
Many investors look at office supply retailers as a barometer of economic health because demand for their products is closely tied to white-collar employment rates. Their sales have suffered as consumers and small businesses spend less.
But Staples has consistently outperformed its smaller rivals Office Depot
The company, which expects a modest improvement in the economy in 2011, sees sales rising in the low single-digits in the first quarter. It sees earnings in the range of 30 cents a share to 32 cents a share.
Last month, OfficeMax missed quarterly sales expectations and gave a cautious outlook for 2011 as it sees little help from the U.S. economy. Office Depot also reported a decline in quarterly sales.
Staples' net income rose to $274.7 million, or 38 cents a share, in the fourth quarter ended on January 29 from $233.9 million, or 32 cents a share, a year earlier.
Excluding a restructuring expense, Staples earned 39 cents a share, missing the analysts' average estimate of 40 cents, according to Thomson Reuters I/B/E/S.
Sales rose about 0.1 percent to $6.42 billion, but missed the analysts' estimate of $6.48 billion.
Staples said inclement weather in the quarter hurt sales by about $70 million and earnings by about 3 cents a share.
Sales at North American stores open at least a year fell 2 percent due to the weather and weak demand for computers.
For 2011, the company backed its previous forecast for a sales rise in the low to mid single digits, and earnings per share of $1.50 to $1.60.
(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn and Derek Caney)