Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Staples (NASDAQ:SPLS)

Q4 2010 Earnings Call

March 02, 2011 9:00 am ET

Executives

Laurel Lefebvre - IR

Demos Parneros - President of US Stores

John Mahoney - Vice-Chairman and Chief Financial Officer

Mike Miles - President, Chief Operating Officer and President of Staples International

Ron Sargent - Chairman, Chief Executive Officer and Chairman of Executive Committee

Joseph Doody - President of North American Delivery

Analysts

Alan Rifkin - BofA Merrill Lynch

Michael Lasser - Barclays Capital

Joseph Feldman - Telsey Advisory Group

Aram Rubinson

Kate McShane - Citigroup Inc

Daniel Binder - Jefferies & Company, Inc.

Gary Balter - Crédit Suisse AG

Matthew Fassler - Goldman Sachs Group Inc.

Oliver Wintermantel - Morgan Stanley

Anthony Chukumba - BB&T Capital Markets

Stephen Chick - FBR Capital Markets & Co.

Christopher Horvers - JP Morgan Chase & Co

Mitchell Kaiser - Piper Jaffray Companies

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2010 Staples Earnings Conference Call. My name is Keisha, and I will be your operator for today. [Operator Instructions] I will now like to hand the conference over to Ms. Laurel Lefebvre, Vice President of Investor Relations. Please proceed.

Laurel Lefebvre

Good morning, everyone, and thanks for joining us for our fourth quarter and fiscal 2010 earnings announcement. During today's call, we'll discuss some non-GAAP metrics to provide investors with useful information about our financial performance. Please see the Financial Measures & Other Data section of the Investor Information portion of staples.com for an explanation and reconciliation of such measures and other calculations of financial measures that we use to analyze our business.

I'd also like to remind you that certain information discussed on this call constitutes forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those discussed or referenced under the heading, Risk Factors, and elsewhere in Staples' latest 10-K filed this morning.

Here to discuss Staples' Q4 and 2010 performance and business outlook are Ron Sargent, Chairman and Chief Executive Officer; Mike Miles, President and Chief Operating Officer; and John Mahoney, Vice Chairman and Chief Financial Officer. Also joining us are Demos Parneros, President of U.S. Stores ; and Joe Doody, President of North American Delivery. Ron?

Ron Sargent

Well, thanks, Laurel, and good morning, everybody. Thanks for joining us today, especially one hour later than our normal call. We wanted to be responsive to our West Coast shareholders going forward.

I'll start with the headlines. Total company sales for the fourth quarter were $6.4 billion. That was up slightly compared to Q4 of last year. We achieved adjusted earnings per share of $0.39, and that included a benefit of about $0.06 from a lower tax rate than we had planned. That benefit, however, was almost entirely offset by the impact of bad weather during the last five weeks of the fourth quarter.

Prior to a holiday weekend over Christmas, our fourth quarter results were consistent with our plan. At that point, severe storms disrupted our business pretty much every week through the beginning of February. We estimate the total impact from weather during the quarter to be about $70 million in lost sales worldwide and two points of comp in our North American Retail business. This impacted earnings per share by about $0.03.

The challenging weather not only hurts sales and margin because of store and facility closures, but it also cost us to step up promotional activity to try to catch up on sales. We believe that this cost us another $0.02 in earnings per share for the quarter. January is typically our biggest, and it's also our most important month of the year. And this year, the bad weather and subsequent promotional efforts to drive sales proved hard to overcome.

On the positive side, our business has recovered since the snow stopped in early February. Sales are in line with our expectations, and we remain confident in our expectations for strong earnings growth in 2011. Also, during the fourth quarter, customer service metrics were excellent. Our Delivery business continued to show signs of momentum on the top line. We managed our inventory well, and cash flow was strong at over $1 billion for the year.

While the fourth quarter was tough, we're proud of our full year results. We grew adjusted earnings per share 11% on just 1% growth on the top line. We achieved nice margin improvement in North American Delivery and International, and we improved total company adjusted operating margins by more than 40 basis points.

We're also pleased with signs of momentum in the three major growth initiatives that we've been investing in: Office technology, Copy & Print and Facilities and Breakroom supplies. While we're not happy with our top line yet, we are satisfied that our business is healthy, that we're investing in the right things and that our growth initiatives are gaining traction and positioning us well for a strong 2011.

Turning to our business units, and I'm going to start with North American Delivery. Sales for the fourth quarter were $2.5 billion, up about 3%. Top line growth improved sequentially despite the winter storms in January that hurt our sales by about $20 million. We are encouraged to see growth in each of our three delivery businesses. In staples.com, Contract and Quill, we grew the top line in the low single digits. This marked the first time in 12 quarters that Quill delivered positive sales growth as we continue to benefit from the team's efforts to drive brand awareness and improve price impression at Quill.

Category trends were positive in core office supplies, with low single-digit growth in both paper and ink. Furniture accelerated to 3% growth in the fourth quarter. Our Facilities and Breakroom initiative continued to gain momentum, and we grew 7%, with double-digit growth at staples.com and Quill. Contract grew Facilities and Breakroom 3%, and Print Solutions grew 11% even before the benefit of the Miami Systems acquisition.

In terms of customer behavior at staples.com, we're seeing a pickup in the number of customers and frequency. But they continue to closely manage their spending, and average order size is still weak.

On the Contract side, customer acquisition and retention was strong. Our medium-sized customers' average order size is improving, but purchase frequency remains a bit choppy. Sales from new customers were strong, and good growth in Furniture during the quarter was also encouraging.

In our large National Accounts business, we saw an improving trend in sales to existing customers early in the quarter, but the weather in January moved that metric back into negative territory for the entire quarter. We expect to see sales to existing customers turn positive in 2011.

We're also pleased with our results in acquiring government contracts and added about 1,000 new U.S. communities customers to our portfolio so far. The new U.S. communities customers we acquired in 2010 represent a run rate of about $50 million in annual sales. Overall, we're seeing nice momentum in our Government business for the full year. Sales to federal government accounts were up 10%, and state government sales were up 18%.

NAD operating margin came in at 8.3% for the quarter, a decrease of 85 basis points compared to the same period last year. This was primarily due to higher incentive compensation compared to last year's depressed levels. We also continue to invest in our growth initiatives, including lower prices to drive Facilities and Breakroom sales.

We're happy with NAD's full year results, with operating margins up 38 basis points. Our Contract business improved by 90 basis points for the year, demonstrating that we're capturing the corporate express synergy that we planned. The investments in pricing in the dot-com and Quill businesses offset some of those gains but resulted in 4% top line growth for the year in staples.com and got our Quill business back to growing at the end of the year.

Looking back at our accomplishments and our supply chain last year, I'm pleased with the progress we've made as we continue to integrate Corporate Express in 2010. We completed 60 fleet integration projects, which addressed 85% of our network's volume and achieved all-time high service levels. We now have 28 fulfillment centers, with systems capable of serving both Staples and Corporate Express customers. We still have some work to do with systems and warehouse integration, but we feel good about how our Delivery business is set up to achieve stronger sales and solid margin improvement in 2011.

Moving on to North American Retail. Sales for the fourth quarter were $2.6 billion dollars down slightly versus Q4 of 2009. Bad weather hurt our U.S. results by about $40 million or two comp points during the last five weeks of the quarter, which is typically one of our best-selling periods of the year. Winter storms caused more than 600 days of store closures in late December and January.

Fourth quarter same store sales declined 2%, with softness in computers and peripherals, offset by strength in Paper and our Services business. Pet [ph] sheet copy paper comped in the low single digits. Core supplies, ink and furniture were in line with the house. While demand for PCs was weak during the quarter, some of our new consumer technology launches were very successful, especially the Kindle, which sold well during the holiday season.

Our growth initiatives also performed well during the fourth quarter, ending the year with 7% annual sales growth in Copy & Print and about 40% growth for our EasyTech business. We're expecting continued high growth in both of these areas in 2011, and we launched a national TV campaign recently to build awareness of our technology offering.

North American Retail operating margin decreased 142 basis points to 8.1% for the quarter. We estimate we lost about $23 million in margin dollars in our U.S. business from a combination of lost sales due to weather, investing more in promotions to try to get back some of those lost sales and heavier discounting on computers to make sure we sold through our inventory. The good news is our inventories are very clean.

During the fourth quarter, we opened nine stores. We closed six. For the full year, we opened 41 stores and closed 12 stores in North America. We ended the year with a total of 1,900 stores in North America, 1,575 in the United States and 325 in Canada.

Commercial real estate market remains very attractive. And in 2011, we'll continue to be very selective with the locations of our new store openings. We'll also get savings as we renew leases and downsize stores. We expect to open about 40 new stores in North America this year, around 30 in the U.S. and about 10 in Canada.

In addition to modest square footage growth, we'll continue to drive sales by investing in business technology and Copy & Print growth initiatives. We've made great strides in improving the quality of our offering, and we're optimistic about our plans for the upcoming quarters, including growing out mobile phones to several hundred stores this year and watching our initial tablet line-up, including the Motorola Xoom, that Dell Streak, the BlackBerry PlayBook in April, and we will launch the HP TouchPad in June.

We got a lot done in 2010 to set up our Retail business for better sales growth going forward. In 2010, we conducted 1,000 store projects, about 75 copy center remodels, 75 mobile phone remodels and 850 technology reflows. We added more than 200 outside account managers to support our growing Copy & Print business. We increased our average market basket. We achieved over $50 million in lease term savings, and we continue to post strong operational metrics, including great customer service, high in-stock levels and record low shrink. We're confident that all this work sets us up for a much better year in 2011. And with that, I'll turn it over to Mike to talk about our International business.

Mike Miles

Thanks, Ron. Good morning, everybody. Sales for the fourth quarter in International were $1.4 billion, a decrease of about 3% in U.S. dollars but flat in local currency compared to the same period last year. We continue to make steady improvement in our local currency sales trend, but we were stymied on breaking into positive territory by weakness in European retail, including a modest impact from bad weather in the U.K.

Operating margin was 4.2% of sales, an increase of eight basis points from the same period in 2009. This was a departure from the strong improvement we've recorded in the first three quarters of the year. The quarter's weakness can be largely explained by our European Retail business and investments in Australia.

Our Delivery business in Europe performed well in the fourth quarter, with 4% top line growth in local currency, good profit leverage, achieving high single-digit operating profit in the fourth quarter. However, our Retail business in Europe comped down 7%, with the U.K. and Netherlands particularly soft.

Germany was a bright spot, with retail comping up 6%. We completed a strategic review in Germany earlier in the year, and we feel like we have that business on the right track. Encouraged by our team's top and bottom line performance, we are planning on opening between five and 10 stores there in 2011, with plans for even more in the years ahead. Meanwhile, we're in the middle of the same strategic review process for the U.K.

Turning to our high-growth markets. In China, we were pleased to see stabilization on the top line and losses from last year cut in half. With a strong management team now in place, we are in a good position to continue our progress toward break-even. Our business in South America drove double-digit growth but remains slightly unprofitable for the quarter and the year.

In Australia, sales were up in U.S. dollars, but slightly negative in local currency. We incurred some incremental expenses here associated with the implementation of SAP. We've also invested in sales force and the launch of our website.

While we had a number of factors that made our Q4 margin improvement less than we would have liked, for the year, we made solid progress, improving operating margin by 91 basis points. We've also set ourselves up for continued progress toward our stated goal of 7.5% and better results in 2011. Now I'd like to turn it over to John to review our financials.

John Mahoney

Thank you, Mike. Good morning, everybody. For the fourth quarter, total company sales were up slightly versus last year to $6.4 billion. The foreign exchange impact from the stronger U.S. dollar had a modest negative impact of about 10 basis points on the top line, with currency benefit from the Canadian and Australian dollars, offset by the negative impact from European currencies. For the full year, total company sales were up 1% to $24.5 billion or up 20 basis points in local currency.

Our fourth quarter GAAP earnings per share on a fully diluted basis increased 19% to $0.38 per share versus the fourth quarter of 2009. During Q4, the company recorded pretax integration and restructuring expense of $6 million or $0.01 per diluted share. Excluding these costs as well as the $20 million of pretax integration and restructuring expense and the $42 million settlement of the wage and hour class action lawsuits during the fourth quarter of 2009, adjusted earnings per share increased 3% to $0.39 versus $0.38 during Q4 of last year.

Our effective tax rate for the fourth quarter was 26.6% compared to 34.5% last year. Our previous guidance assumes that the U.S. Congress would not extend certain provisions in the IRS Code regulating the way we report international income on our U.S. tax return, and that our tax rate for the year would be 37.5%. However, in December, Congress did in fact extend these provisions, and our tax rate for the year returned to 34.5%. This legislation had a favorable impact on fourth quarter diluted earnings per share of approximately $0.06 when compared to our previous guidance.

Foreign exchange rates had an immaterial impact on earnings this quarter, benefiting operating income by less than $2 million. For the full year, adjusted earnings per share increased 11% to $1.27, compared to last year's $1.14.

Gross profit margin decreased by 62 basis points to 26.8% during the fourth quarter. This reflects flat margins in North American Delivery, driven by stable product margins and good expense control within our supply chain. In North American Retail, we've already discussed the drivers of weak gross margins. And lower sales also drove slight deleverage in distribution and delivery and rent and occupancy expense. In International, deleverage on weak sales and retail was the primary driver.

On an adjusted basis, SG&A deleveraged 30 basis points versus last year's fourth quarter, primarily due to labor and marketing investments in our North American growth initiatives. Adjusted operating margin decreased 77 basis points during the fourth quarter to 6.8%.

2010 capital expenditures came in at $409 million, up from the $313 million we spent during 2009. With operating cash flow of about $1.4 billion, we generated a little over $1 billion in free cash flow for the year versus the $1.8 billion in 2009, as we did not have the same degree of integration-related working capital or tax efficiencies that we had in 2009.

In 2011, we're planning to increase our capital expenditures to $500 million as we invest in growth initiatives, systems, the integration of our distribution networks in North America and Europe, remodels and new stores. We expect to generate more than $1 billion of free cash flow in 2011 as well.

Looking ahead to the first quarter, we expect total company sales to increase in the low single digits versus Q1 of 2010. The first month of the quarter got off to a slow start, with more tough weather in early February. But since then, sales have stabilized and are generally tracking our forecasts. As a result, we expect to achieve earnings per share in the range of $0.30 to $0.32 for the first quarter of 2011.

Reflecting on the year ahead, there are a lot of factors to consider. As we start off 2011, we haven't seen any clear improvement in the demand environment, but most economic indicators say we should feel confident that the economy is getting better. We've begun to see some good momentum in our growth initiatives, and their continued success will be very important to our year. At this point, it's too early to predict the impact of new categories like tablets and mobile phones.

If you balance all of these factors, we still expect the company sales for the full year to increase in the low- to mid-single digits versus 2010, assuming a modest economic recovery throughout 2011. We still expect to achieve adjusted earnings per share in the range of $1.50 to $1.60 per share. Our guidance includes a number of non-operating items that we expect to benefit earnings growth. These factors include a lower share count due to our continued buyback program, about a $20 million reduction in interest expense and a small benefit from including a full year of Australia in our results. All in, we expect these factors to represent approximately $0.05 to $0.06 of earnings.

We also expect to see operating leverage from each of our businesses, including cost savings we're targeting through our process improvement program. Thanks for your time this morning. Now I'll turn it back over to our conference call moderator for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Gary Balter with Credit Suisse.

Gary Balter - Crédit Suisse AG

Question on the contract in your North American Delivery, as you call it. I think, John, you mentioned gross margin was flat in the fourth quarter. Did I get that right, or was that for the full year?

John Mahoney

That was for the full year.

Gary Balter - Crédit Suisse AG

So could you talk about what happened in the fourth quarter, because margins looked like they went down? You said you made some investments and you mentioned lower pricing. Is this a reaction to some weather, or is this a new strategy in terms of we're going to be more competitive to gain some share? And then I have a follow-up along the same sector.

Joseph Doody

Okay. Gary, this is Joe Doody. First, as you know, our margin for the year as a whole in North American Delivery was up just under 40 basis points. Contract was up almost just under 190 basis points. So we are balancing investments throughout the year, including in the fourth quarter in marketing, pricing and our supply chain that are going to help generate future growth for us in both sales and profitability. And we're beginning to see some of that investment pay off when you look at the Quill turning positive in terms of sales growth as well as our Facilities and Breakroom growth improving. Now relating to the fourth quarter, three main factors that impacted us. One, there was higher variable compensation expense due to a low payout for NAD in 2009. Two, we did have deleverage due to the weather, both in terms of the sales impact, we said $20 million sales loss, as well as just the higher cost of delivery in that bad weather. And then three, it's the investments that I mentioned in the business that we're continuing to make for future growth. So we continue to see 2011 to be continuing growing, profitability in growing sales growth and still committed to our long-term margin goal.

Ron Sargent

Just to add to that, I don't see us having a fundamental change in our pricing strategy out there. We're aggressive, but we've always been aggressive and that'll continue. But we are increasing our mix of Government business, which in general, margin is probably not quite as good as our Corporate business. And then I think the other thing we're doing on the margin side is we've invested throughout the year in Facilities and Breakroom supplies to really get our prices to the point where we can kind of really grow that business as a growth initiative.

Gary Balter - Crédit Suisse AG

And then just a follow-up, you mentioned that you gained 1,000 accounts from North American Delivery from the U.S., yes. And a competitor of yours mentioned they retained almost all the business. I'm trying to just correlate that.

Joseph Doody

Well, they mentioned they've retained about 85%, which based on the base of business that's there, would mean they've lost maybe $75 million to $80 million. And what we're saying is we've captured, on a run rate basis right now, a little bit over $50 million, so that's [indiscernible] involved in that one.

Operator

Your next question comes from the line of Oliver Wintermantel with ISI.

Oliver Wintermantel - Morgan Stanley

You mentioned that inventory was up about 4% in 2010, while sales increased about 1%. Could you walk us through the drivers of that increase, and how should we think about the working capital then in 2011?

Ron Sargent

Ask John to respond.

John Mahoney

I think, as we said throughout all this year, as we thought about trying to get sales to grow faster, we're going to plan to invest particularly in some of our growth categories. So in the tech area, we've invested in some inventory. Of course, as we said, we sold through all the commodity stuff that you worry about going bad, PCs particularly. We also -- I think as we've expanded the assortment with the facilities there in NAD, we've added SKUs and stocked more SKUs in our warehouses than we did before when we used to use wholesalers for many of the facilities items. So overall, I think the measured approach we've taken to investing in inventory to support sales has been reasonable. And we would expect to continue to maintain good control on inventory, and I would not expect to see inventory grow during 2011.

Oliver Wintermantel - Morgan Stanley

And just one more, if I may. Could you give us a breakdown of traffic versus ticket in North American Retail and in Europe please?

Ron Sargent

Demos?

Demos Parneros

So traffic has actually been actually a bright spot throughout Q4, and I'd say right towards the end when the bad weather came through, went slightly negative. But generally, we were happy with it up until that point, and the only other thing I'd say is that it's probably a little bit stronger on the consumer side, not as good as we'd like to see on the business customer side. But overall, good. Our ticket's slightly down as well. So about even in ticket and order sides for the quarter.

Mike Miles

Same thing was true in Europe, Oliver, this is Mike Miles. Sort of a split between traffic and ticket, lower ticket on lower computer sales in particular, but we were also struggling to get more people in the store.

Operator

Your next question comes from the line of Colin McGranahan with Bernstein.

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Just a quick follow-up on the gross margin. Did I miss here that NAD gross margins were flat in the quarter?

John Mahoney

They're flat in the quarter.

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Okay. So then just based on math, I would assume that International margins sounded like they were down a bit given occupancy deleverage. But it looks like NAR margins that had to be down more than 100 basis points, maybe as much as 130 basis points in Retail, in NAR. Is that correct? And if so, can you break down the drivers that you mentioned, the more promotional activity, tech clearance, the magnitude of those in relation to that?

John Mahoney

In Q4, NAR was down about 70 basis points on gross profit. And as I mentioned, NAD was about flat, and International was down about 145 basis points.

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

And then in NAR, the 70 bps. You gave us the order there. Was that just promotional activity in general ahead of tech clearance?

John Mahoney

Yes. I mean, it was primarily promotional activity. Obviously, December is very consumer oriented. Demos mentioned our consumer traffic has been stronger than our small business traffic. And so during the holiday period, we are promotional to be in the game. And of course, the bread and butter that comes in January, which is a much richer margin business didn't come as a result of all the weather disruptions. So we were disappointed overall in the margins in the quarter, and that obviously hurt our overall results. But I think it had more to do with weather than anything else, and that the rich business that we expected to get in January didn't come.

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Okay. That makes sense, and that's a mix effect there as well. Then on International, I understand that you had a negative comp and it sounds like a lot of gross margin pressure. But you had a negative comp, a more severe negative comp earlier in '10 and much stronger margin. What else can explain the lack of margin expansion given it sounds like you cut costs pretty aggressively to offset 145 basis points of gross margin?

John Mahoney

No, I think in International, Colin, we were just looking at fairly severe comp declines in the U.K. and the Netherlands, which are two of our more profitable Retail businesses. And that sort of hurt us from a mix standpoint. We also had the same sort of pricing and promotional activity to try and catch up on sales that we had in North America and keep our inventories clean coming into 2011, and that sort of was a double whammy impact on our margins in the Retail business, which has colored the whole International result.

Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Okay. And then, one final follow-up. You said through the last week of December you were pretty much on plan and then the weather impact resulted in the weaker results. But if I add back the entire $0.05 for weather, both the revenue and the promotional activity, and I still end up at $0.38 versus your initial guidance of $0.39 to $0.41. What else didn't go according to plan in the quarter that cost the weaker-than-expected results?

Ron Sargent

I would argue that probably $0.02 was kind of disappointing results in the European Retail business. And then we had a lot of odds and ends, whether it was investing in SAP in Australia, some severance in our Printing Services division, but that's probably the other $0.02.

Operator

Your next question comes from the line of Chris Horvers with JPMorgan.

Christopher Horvers - JP Morgan Chase & Co

So just to maybe try to put the margin issue to bed and just step back, big picture. I mean, do you think that the clearance activity on the inventory side, and try to catch up with sales, do you think that's largely isolated to the fourth quarter such that, as you think about the first quarter and into 2011, that this gross margin pressure will not persist?

Ron Sargent

We should probably talk about it business by business. In North American Retail, as you know, we've got a well-integrated plan to mix in services along with core office supplies and technology to be able to deliver improving margins, coupled with the Staples brand products that we've begun to try and drive with some new products. In NAD, the mix of products in staples.com, coupled with some pricing initiatives at Quill, offset gains that we saw in the Contract business, which has continued to see steady progress in margin improving. In International, it's a mix of trying to make sure that markets like Australia, which is important to us these days and in the Contract business delivers decent margins, and then as Mike said, getting the retail businesses in Europe to deliver improving margins through better mix, better buying, as well as increased penetration of the Staples brand. So I think when you look at it overall, certainly, the big impact that North American Retail had on overall margins was the challenge, and Mike's looking hard at trying to make sure that we develop a similar plan to what we have in North America in the European Retail business to make sure that we don't see the same shortfall in margin rate in the European Retail business that we saw in the fourth quarter.

Ron Sargent

But Chris, I think it's very safe to say that we're not going to be promoting heavily to drive sales because of bad weather going forward. I mean, the weather was the weather. And as disappointing as we were that we were chasing it all January, we don't expect that kind of margin pressure to continue.

Christopher Horvers - JP Morgan Chase & Co

So then as a follow-up to that, Mike, you've talked a lot about, [indiscernible] about having a lot of controllable margin outcome in the International business, given the integration synergies and so forth. So has your view changed as you think about 2011 versus what we talked about in the back half of last year?

Mike Miles

No, not at all, Chris. I think we're still very committed to 7.5%. We're committed to having another year of significant margin improvement in 2011. We've had good improvement in Europe, delivering in China this year, and we just talked about the issues with European Retail, which are clearly the most urgent thing we've got going on in International right now. And I think as we look at 2011, we see that this year, I think the big areas of opportunity are in gross margin as we continue to improve the high-growth markets like China and Brazil and implement Staples brand more aggressively throughout International. So that'd be first. Logistics would be second. We see further consolidation of our network in Europe. And then, G&A is important as the number one lever that we see for getting the 7.5%. We see tight rein on expenses and streamlining of our European G&A as key initiatives for 2011.

Christopher Horvers - JP Morgan Chase & Co

And one follow-up on the top line on North American Retail. Do you think the issues with comping Windows 7 are largely behind us? Or will that continue to cause pressure on the overall comps, such that not being able to put up a positive comp in the first quarter?

Ron Sargent

Demos?

Demos Parneros

I think the issues with Windows 7 are past now. And I think the -- there are different challenges today from the top line standpoint. So probably the weather was the big factor, but also, PC demand was all over the board. And just talk for a second about tablet impact. It's hard for us to measure exactly what are these lost sales or the cannibalization impact was. Obviously, it's hard for us to judge that since we're not selling any yet. Know what's out in the market so far. As we roll that product into the stores and we're very prepared to do so as it comes available, that is shifting forward and we also have our mobile initiative that we're going to be putting in hundreds of stores, and then the continuation of the growth initiatives both at Services and Copy & Print. So I think the Windows 7 is ancient history at this point. We just look forward.

Christopher Horvers - JP Morgan Chase & Co

So you think you can comp positively in 1Q?

John Mahoney

I don't think we're giving any comp guidance at all in Q1. So we'll let you know. We gave you comp guidance, I think, in the past, and have been disappointing. So we'll let you know in about three months.

Operator

Your next question comes from the line of Matt Fassler with Goldman Sachs.

Matthew Fassler - Goldman Sachs Group Inc.

Two quick questions. First of all, just a follow-up, if I could, on the contract incentive comp. Was that kind of unusually loaded into the fourth quarter to essentially true up the year, given the good performance in that business?

John Mahoney

Yes, I think what happens is that we try and look at it quarter by quarter. And last year, going into the fourth quarter, we had accrued nearly all of the compensation expense that we thought we needed in NAD, and the fourth quarter didn't come in quite as strong than we thought it would. So we didn't have much of an accrual in the fourth quarter last year. And in the fourth quarter this year, we went into the quarter with pro rata accrual through Q3, and the business continued to perform pretty well and so we wound up with accruals in Q4 this year that really didn't have a comparable number in last year's Q4. So on the grand scheme of things, it's not a huge amount but it did have some impact on the comparison this year.

Matthew Fassler - Goldman Sachs Group Inc.

John, of the 80 or 85 basis point year-over-year decline in Contract and NAD margins rather, do you know how much of it that was?

John Mahoney

It was the majority.

Matthew Fassler - Goldman Sachs Group Inc.

Got it. And just by way of follow-up, you talked about guidance of incremental earnings in 2011 related to kind of non-operating items, including buybacks and lower interest expense. Can you give us your assumptions on capital structure including the kind of buyback that you're putting into that thought process? That paydown [indiscernible] would be very helpful.

John Mahoney

Yes. Well, I think what we said is that we'll have the impact of Australia, which is worth $0.01. We've got a $20 million reduction in interest expense, which is worth a couple of pennies. And so we assume $0.02 or $0.03 of impact related to our share buyback.

Matthew Fassler - Goldman Sachs Group Inc.

And we can do the math, I guess, but would you quantify that in terms of hundreds of millions that that would represent in your mind?

John Mahoney

I think we've said $3 million to $5 million, we said at Analyst Day. So if you use the midpoint of that, that would be reasonable.

Matthew Fassler - Goldman Sachs Group Inc.

And in terms of timing, was that back-end loaded or is it consistent through the year?

John Mahoney

I would say consistent through the year.

Operator

Your next question comes from the line of Steve Chick with FBR.

Stephen Chick - FBR Capital Markets & Co.

I had a question, actually, for John on the charges or the costs for weather for the quarter, the $0.03 and then the incremental promotion of $0.02. If we were to adjust the P&L for the quarter and let's say to try and get a normalized look at it, are we -- should we reflect it mostly in the gross profit line? Or is there a split between that and more like operating expenses?

John Mahoney

Yes, well, I think, obviously, when you have stores closed down, you have certain fixed costs like rent that you have to pay anyway. We certainly lost all the gross margin dollars that went with the sales. So we used a flow-through rate that anticipated our normal level of gross margin, offset by the inability to cover those fixed expenses. So yes, I think it does go across the whole P&L.

Stephen Chick - FBR Capital Markets & Co.

And then if I take a look at the pretax numbers, I guess I'm coming up with about $30 million related to the $0.03, and call it $20 million or so related to the $0.02. Can you give us a little bit of a sense of within the segments of North American Retail, North American Delivery and maybe International, how does it flow through the three segments?

John Mahoney

I think we said that of the sales shortfall, about 2/3 of it was in North American Retail and 1/3 of it was in NAD. And I think we said that there was a small effect in the U.K., but relatively less material to the International segment.

Stephen Chick - FBR Capital Markets & Co.

Okay. So we can use the same percentage of sales as were with the operating profit piece, it sounds like.

John Mahoney

I think that's right.

Stephen Chick - FBR Capital Markets & Co.

And then lastly, in your guidance for this year, what do you assume your D&A is for the year and what share count? What diluted share count do you have baked into the $1.50 to $1.60?

John Mahoney

Yes, I think -- overall, we haven't provided specific guidance on the share count but have said that we will buy back around $400 million of shares. So assuming -- you make an assumption about what price we're going to pay for those shares and you know where the share count is now, so you can get to a number, but rough and tough, we think that that'll have the impact of $0.02 or $0.03 on our overall results for next year. Depreciation and amortization will decline slightly – or increase slightly from – can we just get that number?

Ron Sargent

$400 million, $450 million.

John Mahoney

$450 million for depreciation and amortization.

Laurel Lefebvre

Actually, amortization separately would be I think about in the $75 million range.

Ron Sargent

Right. $525 million.

John Mahoney

So total, $525 million.

Operator

Your next question comes from the line of Michael Lasser with Barclays Capital.

Michael Lasser - Barclays Capital

When you talked about the need to be a little more promotional, to recruit some of the lost sales from the weather and maybe clearing some of the inventory [ph], how are you thinking about the competitive set? Is it mostly relative to the other office supply players? And how has that maybe changed over the last couple of years? Are you more mindful of the online and mass merchant players now than you were before?

Ron Sargent

Well, I can weigh in and I don't know if Joe and Demos want to weigh in as well. But we're incredibly focused on all of our competitors and the competitive set is unbelievably broad. Certainly, there's the traditional office superstores, but we spent a lot of time looking at what's going on with the mass merchants, the consumer electronics companies and very much the Internet players. So we're looking at pricing. We're testing their infrastructure. In terms of January, I don't think we were really looking at competitive players as much. Because basically, we were trying to recoup sales every week, and you would put your ad in place and then it would snow again. And you'd say, "Well, gosh, next week, we're going to have to be very aggressive on clearing out this inventory." So you put your ad in the paper and then it snows the next week. And it was kind of a very unusual time. And we don't blame the weather a lot when we talk about our results but sometimes, the impact is huge like it was really the last five weeks of the quarter and even the first week of the new year. So I don't...

Michael Lasser - Barclays Capital

That's helpful. And as a follow-up question, can you talk about the performance of non-PC technology-related items, DF Devices [ph], cameras? And how is that, probably underperforming impacting the overall result, particularly in North American Retail?

Ron Sargent

I'll ask Demos to weigh in. But typically, it's hard to sell the attachments when you don't sell the PC. But Demos?

Demos Parneros

Exactly right. So with PC demands down, the biggest impact came in peripherals, the related businesses that we really count on to sell along with the hardware. So obviously, it's hard to sell antivirus software if you're not selling the PC. Generally, that's sold with the PC. Peripherals, things like cables are selling less because generally, we're selling wireless printers these days. So I'd say that peripherals is the area that took a hit, there are some other businesses that are just in slow decline like the one you mentioned, cameras. But generally speaking, we're focused on the basket and businesses like tech services, which helps offset some of the hardware margin for us.

John Mahoney

There were a couple of success stories in the technology side.

Demos Parneros

Yes. So one of the big successes was the introduction Kindle at Retail. We were actually questioned on why we would do that, and it actually was a very pleasant surprise. Customer acceptance was very high on that product. We had great attachment selling to go along with that as well. So we're ready to go as we invest in the tech initiative going forward, with mobile and the continuation of our Tech Service business and look forward to a good first half.

Operator

Your next question comes from the line of Dan Binder with Jefferies.

Daniel Binder - Jefferies & Company, Inc.

Two questions. First on the U.S. Communities, just kind of curious what you think is likely to happen over the coming year with regard to additional account sign-ups. In other words, are we dealing with government agencies and have we seen the bulk of it sort of happen here with these [indiscernible], or is it actually a slower transition over the next 12 months where potentially there's additional business gained? And then the second question was just regarding furniture and given some of the improvement trends that you're seeing there, do you think it's a precursor to better existing customer spend over the balance of the year?

Ron Sargent

Let me start with the U.S. Communities, and I'll ask Joe to respond to that. But I think the headline is we're not done with that yet.

Joseph Doody

Not done with it at all, and it continues. We're aggressively going after that business out there today. Just as we are with all of our business. But just to put it a little bit into perspective for you, we feel we picked up in 2010, as we said as we closed out the year here, a little bit over $50 million on annualized run rate. If you go back to 2009, we figure we've picked up probably another $30 million even in '09 of that business. So we've had consistent last couple of years, good amount of business coming out of that sector and as we've said, a strong double-digit growth in the state and local government business. So that covers that question ultimately for you. Second question on furniture, I'll just say, from an NAD standpoint, we did comment on encouraging furniture of 3% or so positive growing in each of the channels. We still are seeing some slight negative sales in our Contract business for sales from existing customers. That was trending positive early in the quarter but turned negative later in the quarter based on the winter effects. But yes, I think it is a good signal that at least things have at a minimum stabilized out there. But I will say we are gaining share in the furniture market. The furniture market, overall, is not comping positive to the degree that we are.

Ron Sargent

Just one thing to add on the U.S. Communities, I mean, that contract just changed hands eight weeks ago, so it's very early in the cycle. So we hope to continue to gain some share there.

Daniel Binder - Jefferies & Company, Inc.

And then if I could, one final question on tech, at Retail, do you think the tech weakness and resulting clearance was a function of cannibalization from iPad, or was it more weather? And there's obviously been some criticism on the increasing exposure that you're taking to hardware? And just curious how you think about merchandising in tablets and going forward, in terms of whether it's a more conservative posture than what you have been doing or if that changes materially?

Ron Sargent

Let me ask Demos to weigh in, because we try to manage our technology offering very carefully to kind of balance out the sales and margin. And I think that's the strategy and that's the approach, and I think they've been pretty effective doing that up till January. Demos?

Demos Parneros

Yes, we're looking out to that [ph] is that it was primarily weather. I don't think we really expanded the assortment to levels that were out of our control. We've generally been very careful of inventory, I'd say very closely by store, by market, by cluster basis. We generally watch very carefully the attachment levels and our whole market basket approach. But on the store side, it's also very careful on how we replenish on the inventory side. Also, very careful with returns and the vendor relationships are managed very closely. All that said, there were no tablets in Q4 to sell. So I think when we shut down, we were stuck with some inventory, simply put. So I think a lot of our activity was to clean up. Going forward, we expect the mix to be in a change. And who knows what the convergence will bring. How customers will use their PCs versus their tablets versus their mobile device kind of remains to be seen. We are feeling good about our approach and our plan to play in all three and to really balance out the approach so that we are not in a position where we're overstocked in one versus one of the other two. It feels like a little bit more weather, honestly, then over-assorting in Q4.

Operator

Your next question comes from the line of Aram Rubinson with Nomura.

Aram Rubinson

Just a conceptual question, I guess. In the fourth quarter of 2010, the Retail operating margins were around 140 basis points down, comps were only down two. In the fourth quarter of '08, retail operating margins were down 130 basis points and the comps were down 13. I guess, my question is ideally, you could have sales and margins both at the same time. If you could do Q4 over again, would you choose to rebalance the margins and sales? It just seems, I guess, those two seem like very stark differences that the industry and you were less promotional with comps down 13 than you were with comps down two.

Ron Sargent

Yes, I mean, I think that your answer is, yes, I'd love to do a do-over for Q4. John?

John Mahoney

Again, I think it's hard to go back to '08. The world was a lot different in '08 than it was today. And I think we've done a good job of controlling expenses during the really tough times like '08 when we knew there was no demand environment. And I think where we are today is we're positioning ourselves to try and take advantage of demands by investing in great customers service, adding sales force in Copy & Print, doing the things that really position us to get back serving our customers in a way that gets more trips to the store and gets them to buy more of the things they need to run their office from us. So it's sort of a different time and it's hard to make the comparison. We really are thinking about where the business will go long-term and obviously, with many fewer gross margin directed, again I hate to keep saying the weather, but largely based on the weather, the investments we made cost us much more deleverage than we expected to have.

Aram Rubinson

And just a clarification on the wins from U.S. Community, is that as of the January period? Is that as of today? I'm just wondering. And would you characterize the pace of those wins as consistent or is there really going to be kind of an initial spike when the contracts are just kind of getting rewritten and then the pace ought to slow meaningfully from here, if that's not too difficult to answer?

Ron Sargent

Yes. The numbers that we're quoting are through the end of January. When we say the wins, it's based on the number of wins we've accounted for. They are in various stages of ramping up, and we're using annualized sales numbers for them, which gets us to the $50 million. And activity level, I continue to expect it to continue aggressively throughout much of this year. And that's why I referenced even '09 before the end of the contract and the changeover that we were still generating significant new business from U.S. Communities customers even before the 2010 time period.

Aram Rubinson

And again, conceptually, if the incremental margins on new business are 15% or maybe even better, and correct me if I'm wrong, can you update on your latest philosophy of thinking about using some gross margin, which you didn't do in the fourth quarter it appears but using some gross margin to get that fixed cost leverage, which will come through at a good incremental margin, even if it's not, let's say on a micro basis, account-by-account, might not be the perfect solution? Would you be willing to cut a wholesale deal a little bit more gross margin giveaway to get what could be massive incremental margins, overall?

Ron Sargent

If it were that easy, yes. But unfortunately, it's not, and you deal with these kind of one of at a time, one community, one city, one community at a time. And I think we've got to look at these to be very aggressive each time. But in terms of a kind of a strategy geared toward lowering prices to gain share, kind of en masse, I think that probably is not something we'd consider doing.

Aram Rubinson

Still keeping the account profitability model intact, then?

Ron Sargent

Absolutely, yes. I mean, I think that's kind of what we do.

Demos Parneros

[Indiscernible] with one is very important with the rest of your customers as well.

Operator

Your next question comes from the line of Anthony Chukumba with BB&T Capital Markets.

Anthony Chukumba - BB&T Capital Markets

I just had two questions. I mean, looking at your guidance in terms of top line, Q1, you were guiding to a low single digit increase and for the whole fiscal year, you're guiding to a low to mid-single digit increase so that would imply sort of sequential improvement over the course of the year. And I guess I was just wondering what is the basis for that assumption of sequential improvement? Is it a better macro? Or is it getting tablets in? Or is it rolling out mobile? I guess, I was just wanting to get some color around that.

John Mahoney

I think we've said that we are expecting a steady improvement in the economy overall, so there is some macro impact in what we assumed, and that's why we have a range for our earnings per share and a range for our sales guidance because we don't know what that will be. But more importantly, we're not sitting still waiting for the economy to recover. We're trying to do the things we can to drive the business with the investments we've talked about. Our growth initiatives, as you've heard lots about. There's exciting new categories this year in the small business category, categories like tablets. And mobile is becoming more important. We're going to be a bigger player in mobile than was done before. In the NAD business, we've had a lot of really nice wins in the Facilities and Breakroom area, and we expect that to continue. So I think that it's a combination of expecting that we are going to see steady improvement in the economy, but taking the actions we can take to drive the business ourselves.

Anthony Chukumba - BB&T Capital Markets

Great. That's very helpful. And then just one quick follow-up question. I just wanted to see if could I get a little bit more color on rolling out wireless to your stores. First off, I just wanted to clarify you said a few hundred stores, I mean, could you give a little or more clarity on that. And then also, is it going to be a single carrier model or is it a multiple carrier model or is it going to vary by store?

Ron Sargent

Demos has spent a lot of time on that one. So I'll hand it over to Demos.

Demos Parneros

I can answer part of your question and the rest we're not quite ready to share yet. So it is hundreds of stores, we're very confident in the close to one year test that we've done in roughly just under 100 stores. We have tested multiple carrier models, single carrier models as well as multiple carrier models. We've also tested different types of labor within the different type sales. And we feel like we can come to a conclusion on what to roll out. And we'll be rolling this out beginning probably over the next four or five weeks and steady through probably right before back-to-school. So we're pretty confident in what we learned in the tests and excited about rolling it.

Operator

Your next question comes from the line of Kate McShane with Citi Investments.

Kate McShane - Citigroup Inc

Ron, last quarter, you gave a lot of detail around the size and comp at your EasyTech and Copy & Print business, and I wondered if you could give us that detail again for the fourth quarter?

Ron Sargent

In terms of sales?

Kate McShane - Citigroup Inc

In terms of, yes, comp store sales for the quarter.

Ron Sargent

I think EasyTech was about plus 40, and Copy & Print was plus seven.

Kate McShane - Citigroup Inc

So that was an acceleration, in the third quarter [ph]?

Ron Sargent

Yes. It really reflects a lot of hard work on a lot of people's part. And I think we're starting to get some traction on both of those.

Kate McShane - Citigroup Inc

Okay, great. And then I know you have a lot of investment initiatives in place, and there's going to be a fair degree of spending behind them over the next few quarters. But when do we start to lap some of the initial investment spend in technology and breakroom supplies? Is that in Q1?

Ron Sargent

I think it varies. But certainly by midyear, I mean, we did I think, Demos, you said over 1,000 projects in our stores in terms of remodeling and expensing. And that's getting behind us in the first half, I guess.

Demos Parneros

So we did about 1,000 projects, all in; close to 750 were tech reflows but we added more bench for our EasyTech business. But we expect that business to grow beyond the first year. So as we lap those initial projects, we expect that business to continue to grow, obviously not as great as year one, but we have growth in there for several years. And some of the other investments like the mobile was really to set us up for the big rollout.

Ron Sargent

And on Facilities and Breakroom, we made assortment changes, pricing changes in the first half of last year. So we'll be lapping those as well come the second half of the year.

Kate McShane - Citigroup Inc

Okay, great. If I could just sneak one more question in. One of the things you highlighted at your Investor Day was increasing more of the private label brands in Europe and what impact it would be if you got to the U.S. level. So I just wondered where you were with that initiative and how much it contributed in the fourth quarter.

Ron Sargent

I think our total year penetration rate went up about 80 basis points, but that was driven by, Mike, a lot of it was international.

Mike Miles

A lot of it was International. A lot of it was in Canada. The opportunity is still huge for us, Kate. And it's a bigger opportunity for Europe even in the buying synergies that we got out of the Corporate Express merger. So we're pursuing it with the same kind of process and discipline and have now permanently assigned several people from our SPG [ph] team in the U.S. to Europe, as well as to Australia and Asia, to drive that. We're confident that we'll get some of that this year, but that's kind of an over-the-next-several-years kind of upside. But it's big money for us. And recently, I think we've talked about, opened an export center in China that will help us to deliver smaller quantities to our International businesses so that they're more easily able to tap into the direct from Asia sourcing that we do.

Operator

Your next question comes from the line of Joe Feldman with Telsey Advisory Group.

Joseph Feldman - Telsey Advisory Group

A couple of quick questions. First on the sales that were lost in this quarter, you mentioned being close for 600 days in NA Retail, for example. How much of that typically comes back to you? Does it eventually all come back? Does it come back rapidly? And I know in the press release and in today's call, you've commented that sales have picked up already in February, but maybe you could share a little more color on that.

Ron Sargent

We've asked John that question several times over the last several weeks. So John?

John Mahoney

I think that there's some business that you may get back, if somebody is intent on buying a PC and they defer it for a while and they buy it later. But it's very hard to track that. I think though, on the other hand, when people don't go to work they don't use office supplies, so those are sales you never get back in the core consumable category. So we don't see any clear deferral and pick-up just from that. I think what we're talking about in terms of trends as we go into Q1 is that we're seeing the trends that we saw before the weather get back on the track that they were before. It's not driven by people making up for the things they didn't buy in January.

Joseph Feldman - Telsey Advisory Group

Got it. And then another question, just a follow-up on the tech. To come at it a little different way. With the tech business and the growth with mobile phone and the tablet computers, it makes sense to me anyway. I guess, going forward though, will you have to be more aggressive promotionally? Was this quarter sort of the start of that? Or was it really -- I know you had commented a few times on weather and you wanted to clear out some things, but should we think about this category being more promotional as it is and therefore, there will be a little more volatility in the gross margin going forward?

Ron Sargent

Demos, do you want to weigh in?

Demos Parneros

Sure. I don't think this is the start of it. I think it was a unique situation. I think as the game is changing, for us, the mobile business is pure comps because we were in it in only less than 100 stores. The tablet business, we're very excited about. We plan on being a very important player in that business by having the right assortment for both business and consumers. We plan on having a good lineup of, I mentioned some of the names before, including BlackBerry, which is very targeted toward the small business customers. So we're very focused on just continuing to have a balanced investment portfolio within tech, focusing not only on the hardware but all the other tech entries that go along with PCs and most importantly, the Services business.

Ron Sargent

And I think, going forward, given the tablets have higher margins than PCs, I mean, we're happy to make that trade-off going forward once we have tablets.

Joseph Feldman - Telsey Advisory Group

Got it. That makes sense. And then one final one. You'd mentioned furniture picked up and some other of those discretionary categories, it seemed like they're picking up a little bit. Am I reading too much into this, or are you starting to see that gradual recovery a little?

Ron Sargent

You read the newspaper and you would think that the recession ended two years ago, and things are great again. But in our business, it's jobs, and we really haven't seen much in terms of job growth. Although I think it's certainly better than what we saw over the last couple of year with job declines. So, do I think things are getting better? I do. And I think the pick-up of some of the discretionary categories and furniture would be an indicator that people are starting to spend a little bit. But in our business, we need people to go back to work.

Joseph Doody

As John said in one other response, furniture is one of those categories where with weather, if they're going to buy furniture, they're probably still going to buy furniture when they come back versus delaying [indiscernible].

Operator

The next question comes from the line of Alan Rifkin with BLA.

Alan Rifkin - BofA Merrill Lynch

Ron, a question on the government side of the business. With revenues at both the state and federal level outpacing that of the corporate average. Can you provide a little bit of color on what the margin differential is for the government business collectively versus your corporate average?

Ron Sargent

I don't think we want to kind of get into specific because it changes in each state and each government entity. But I would say in general, it's a little lower than the average.

John Mahoney

A little lower, but again we've got a mix of large corporate customers in our mix, and that helps still is able to mix out properly. And the only thing I'd comment on, Alan, additionally, is that state and local government, it still a relatively small percentage of our overall business. And our growth there also is from a bit of a smaller base. So we haven't been really heavily dedicated in that sector until the last couple of years. And we've geared up our efforts towards it. So we are winning business nicely in that sector but it's not one that is a high percentage of our overall business. In fact, within North American Delivery, it's a single-digit percentage of our overall business.

Operator

And your final question will come from the line of Mitch Kaiser with Piper Jaffray.

Mitchell Kaiser - Piper Jaffray Companies

A little bit more on the mobile rollout. I'm sorry if I missed that. Did you disclose if it's going to be a multi-carrier model or not? And if not, just the tests that you did, did you test multi-carriers, or what you're thinking is behind that?

Demos Parneros

Yes, we tested both, the single and the multi, and our test is now concluded, and we'll be ready to start with our rollout within probably four weeks or so. And at that point, we'll announce exactly the carrier lineup as well as the specific labor model, etc.

Mitchell Kaiser - Piper Jaffray Companies

Okay. And I assume there's bounties associated with that? Is that how the model works then, for sign-ups?

Demos Parneros

For signing up, yes.[ph]

Operator

And there are no further questions in queue. I would now like to hand the call back over to Mr. Ron Sargent for any closing comments.

Ron Sargent

Well, thank you. It's a little past the hour, so I'll be brief. Let me thank everybody for joining us on the call this morning. We look forward to speaking to all of you again very soon.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect your lines. Good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Staples' CEO Discusses Q4 2010 Results - Earnings Call Transcript
This Transcript
All Transcripts