"With North American Retail growing again, improving trends in our catalog businesses, solid profitability in our European office products portfolio, and record free cash flow, we're increasingly optimistic about the future, said Ron Sargent, chairm and CEO of Staples in a statement.
A highlight of the quarter is the integration of Corporate Express, which was acquired in July of 2008. The company cites that it reduced debt by $400 million during Q3 of this year and $1.9 billion since Corporate Express' acquisition. The company anticipates finishing out the rest of the year fulfilling legacy orders for Corporate Express, while integrating new Staples orders.
The comparable store sales were flat against Q3 2008, which the company sees as a reflection of "positive customer traffic for the first time in nine quarters, and strength in computers, ink and toner, offset by weakness in durable categories such as business machines and furniture." Moreover, there was triple-digit growth in the EasyTech sector from 2008 year-over-year and the operating income rate for '09 dropped 19 basis points from the previous year's third quarter.
The growth of the company will remain steady, breaking even in North America over the quarter with exactly three openings and three closings. The North American stores sit at 1,872, with nine major metropolitan areas on their way. Minneapolis, Houston, Austin, TX, San Antonio, Omaha and Tucson will all have a Staples store coming soon and five stores will open in North America during Q4 2009, while anticipating about one opening per week in 2010 of approximately 50 new stores.
Internationally, Staples did not fare as well, finding some trouble in Europe and a resistant market in China. The company took two steps backward and one step forward, as it closed two stores in China, but also opened one in Q3 2009. Germany also found itself with one less Staples by the end of October, however there are still 333 stores in Europe, 26 stores in China and two stores in Argentina.
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