FRAMINGHAM, Mass., December 1, 2009 – Staples, Inc. (Nasdaq: SPLS) announced
today the results for its third quarter ended October 31, 2009. Total company sales decreased six percent to $6.5 billion compared to third quarter 2008 sales of $7.0 billion. Net income attributed to Staples, Inc., on a GAAP basis, increased 72 percent year over year to $269 million, and diluted earnings per share increased 68 percent to $0.37, from the $0.22 achieved
in the third quarter of last year.
Adjusted diluted earnings per share of $0.39 for the third quarter of 2009 decreased seven percent from adjusted diluted earnings per share of $0.42 achieved in the third quarter of 2008.
These adjusted results exclude pre-tax integration and restructuring expense of $16 million during the third quarter of 2009 and $132 million during the third quarter of 2008, as well as a one time tax charge of $57 million during the third quarter of 2008.
“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, Staples’ chairman and chief executive officer.

Highlights for the third quarter of 2009 include:
Total Company
�� Sales for the third quarter of 2009 decreased six percent in US dollars, or seven percent in local currency.
�� On a GAAP basis, third quarter 2009 operating income rate increased 155 basis points to 7.16 percent compared to the third quarter of 2008.
�� Excluding the impact of pre-tax integration and restructuring expense of $16 million during the third quarter of 2009, and $132 million during the third quarter of 2008, operating income rate declined 10 basis points to 7.41 percent compared to the third quarter of 2008. This decline primarily reflects weakness in the printing systems business in Europe, as well as increased incentive compensation in North American Retail and North American Delivery, somewhat offset by Corporate Express integration synergies and reduced marketing expense.
�� Generated record year to date free cash flow of $1.4 billion after $191 million in capital expenditures, compared to free cash flow of $921 million for the same period of 2008.
�� Used strong free cash flow to reduce debt by $400 million during the third quarter, and have reduced debt by approximately $1.9 billion since the acquisition of Corporate Express in July 2008.
�� Ended the third quarter with more than $2.2 billion in liquidity, including $1.0 billion in cash and cash equivalents and $1.2 billion of available credit.
�� Ranked second out of 52 US retailers, and 20th out of the 500 largest US companies, in Newsweek Magazine’s 2009 “Green Rankings”.

North American Delivery
�� Achieved sales for the third quarter of 2009 of $2.5 billion, a decrease of 11 percent compared to the third quarter of 2008.
�� Strong customer acquisition was more than offset by lower spend per existing
customer, resulting in a low double-digit top line decline in Contract, a high singledigit top line decline in Quill, and a mid single-digit top line decline in Staples Business Delivery.
�� Third quarter 2009 operating income rate was flat at 8.85 percent compared to the third quarter of 2008, primarily reflecting Corporate Express integration synergies and supply chain improvements, offset by increased incentive compensation.
�� Corporate Express integration on track: completed 2010 full line catalog with one common product assortment, made great progress with own brand product transition by successfully converting more than 1,000 items from Corporate Express brand to Staples brand, and began testing the first warehouse in North America to support both legacy Corporate Express and Staples customers.

North American Retail
�� Achieved sales for the third quarter of 2009 of $2.6 billion, an increase of one percent compared to the third quarter of 2008.
�� Comparable store sales were flat versus the third quarter of 2008, reflecting 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.
�� Third quarter 2009 operating income rate declined 19 basis points to 10.11 percent compared to the third quarter of 2008, reflecting increased incentive compensation, a higher mix of technology sales, and deleverage of rent expense, largely offset by tight expense control.
�� Drove triple-digit growth in EasyTech versus the third quarter of 2008.
�� Achieved record third quarter customer satisfaction scores.
�� Opened three stores and closed three stores, ending the third quarter with 1,872 stores in North America.

International
�� Achieved sales for the third quarter of 2009 of $1.4 billion, a decrease of 10 percent in US dollars, or 12 percent in local currency, compared to the third quarter of 2008.
�� Comparable store sales in Europe decreased nine percent versus the same period in 2008, reflecting declines in average order size and customer traffic, as well as weakness in durable categories such as computers and furniture.
�� Third quarter 2009 operating income rate decreased 71 basis points to 2.83 percent compared to the third quarter of 2008, reflecting increased losses in the European printing systems business and in China.
�� Closed two stores and opened one store in China, and closed one store in Germany.
Ended the third quarter with 333 stores in Europe, 26 stores in China and two stores in Argentina.
�� Corporate Express integration on track: continued effective vendor negotiations, made progress on European restructuring efforts, completed own brand repackaging requirements for 2010 full line catalog, and accomplished warehouse consolidation in Italy.

Outlook
The company reaffirms its expectations for synergies related to the Corporate Express acquisition, building to $300 million annually over the three year integration period. For the fourth quarter of 2009, the company expects total company sales to increase between one percent and three percent in US dollars, or to decrease in the low single-digits in local currency, compared to the same period of 2008. The company expects to achieve diluted earnings per share, on a GAAP basis, in the range of $0.34 to $0.36 for the fourth quarter of 2009. Excluding approximately $20 million to $25 million of pre-tax integration and restructuring expense, or a $0.02 impact on diluted earnings per share, the company expects to achieve adjusted diluted earnings per share in the range of $0.36 to $0.38. The company expects to incur the following expenses during the fourth quarter of 2009 and FY 2009.