SPLS Staples, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 19, 2015

Registrant’s telephone number, including area code: 508-253-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02     Results of Operations and Financial Condition

On August 19, 2015, Staples, Inc. announced its financial results for the second quarter ended August 1, 2015.  The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K and the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01     Financial Statements and Exhibits

The exhibit listed on the Exhibit Index immediately preceding such exhibit is furnished as part of this Current Report on Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

Staples, Inc. Announces Second Quarter 2015 Performance

FRAMINGHAM, Mass.--(BUSINESS WIRE)--August 19, 2015--Staples, Inc. (Nasdaq: SPLS) announced today the results for its second quarter ended August 1, 2015. Total company sales for the second quarter of 2015 were $4.9 billion, a decrease of five percent compared to the second quarter of 2014. On a GAAP basis, the company reported net income of $36 million, or $0.06 per diluted share. Second quarter 2015 results on a GAAP basis include pre-tax charges of $24 million related to restructuring and related activities, as well as $34 million related to the acquisition of Office Depot.

Total company sales increased one percent during the second quarter, excluding the impact of store closures in North America during the past year and changes in foreign exchange rates. Excluding the impact of charges taken during the second quarter of 2015, the company reported non-GAAP net income of $76 million, or $0.12 per diluted share, compared to second quarter 2014 non-GAAP net income of $75 million, or $0.12 per diluted share.

“Our second quarter results were in-line with our expectations and reflect steady progress on our strategic reinvention,” said Ron Sargent, Staples’ chairman and chief executive officer. “We continued to drive growth in our delivery businesses and in categories beyond office supplies, and we grew operating income during the second quarter. We remain on track with the acquisition of Office Depot, which we expect to close by the end of 2015.”

Second Quarter 2015 Highlights

• Achieved North American Commercial sales growth of three percent.
• Grew North American copy and print sales in comparable stores, Staples.com and Contract.
• Increased total company gross profit as a percentage of sales by 54 basis points on a GAAP basis, or 44 basis points after excluding a $5 million charge related to inventory write-downs in the prior year.
• Grew operating income in North American Commercial and North American Stores and Online.
• Secured more than $50 million of annualized cost savings during the second quarter of 2015.
• Secured more than $400 million of annualized cost savings since the beginning of 2014, as part of a previously announced plan to eliminate at least $500 million of annualized costs in 2014 and 2015 combined.
• Closed 15 stores in North America during the second quarter of 2015.
• Closed 212 stores in North America since the beginning of 2014, as part of a previously announced plan to close at least 225 stores in 2014 and 2015 combined.

*Indicates a non-GAAP measure. Refer to “Presentation of Non-GAAP Information” and the accompanying reconciliations for more detailed information about these non-GAAP measures.

Total company non-GAAP operating income rate increased 26 basis points to 2.56 percent from an operating income rate of 2.30 percent achieved during the second quarter of 2014. This increase reflects improved product margin rate in North American Stores and Online, as well as reduced rent expense. This was partially offset by the negative impact of lower sales on fixed expenses.

The company generated operating cash flow of $300 million and invested $138 million in capital expenditures year to date, resulting in free cash flow of $162 million for the first half of 2015, a decrease of $32 million compared to the first half of 2014. The company ended the quarter with $1.7 billion in liquidity, including $611 million in cash and cash equivalents.

*Comparable sales includes comparable store sales and Staples.com sales growth excluding the impact of changes in foreign exchange rates.

Sales for the second quarter of 2015 were $2.1 billion, a decrease of eight percent compared to the second quarter of 2014. Sales growth was negatively impacted by approximately four percent due to store closures during the past year. Changes in foreign exchange rates also negatively impacted second quarter 2015 sales growth by approximately three percent. Comparable sales, which combines comparable store sales and Staples.com sales growth excluding the impact of changes in foreign exchange rates, decreased two percent versus the prior year. Sales declines in mobility, business machines, technology accessories, and computers were partially offset by growth in ink and toner, copy and print, and facilities supplies. Comparable store sales decreased three percent, reflecting a two percent decline in average order size and a one percent decline in traffic versus the prior year. Staples.com sales declined one percent in U.S. dollars and grew one percent on a local currency basis during the second quarter of 2015.

Operating income rate increased 11 basis points to 1.3 percent compared to the second quarter of 2014. This increase primarily reflects improved product margin rate in retail stores and online, as well as reduced labor, rent and other operating expenses in stores. This was partially offset by the negative impact of lower sales on fixed expenses.

Sales for the second quarter of 2015 were $2.0 billion, an increase of three percent compared to the second quarter of 2014. This primarily reflects growth in facilities supplies, breakroom supplies, furniture, and promotional products, partially offset by sales declines in ink and toner and paper.

Operating income rate increased 19 basis points to 6.7 percent compared to the second quarter of 2014. This increase primarily reflects the favorable impact of higher sales on fixed expenses. It also reflects increased product margin rate and lower marketing expense. This was partially offset by continued investments in sales force to drive growth in categories beyond office supplies.

Sales for the second quarter of 2015 were $780 million, a decrease of 17 percent in U.S. dollars and a decrease of one percent on a local currency basis compared to the second quarter of 2014. This was primarily driven by a four percent decline in comparable store sales in Europe.

Operating income rate for International Operations decreased 52 basis points to an operating loss of 2.8 percent compared to the second quarter of 2014. This decrease primarily reflects lower product margin rate in Europe, partially offset by improved profitability in Australia and China.

Outlook

For the third quarter of 2015, the company expects sales to decrease versus the third quarter of 2014. The company expects to achieve fully diluted non-GAAP earnings per share in the range of $0.33 to $0.36 for the third quarter of 2015. The company’s guidance reflects a sequential increase in the unfavorable impact of the stronger U.S. dollar on sales and earnings. The company’s earnings guidance excludes any potential impact related to restructuring and other related activities or costs related to the company’s planned acquisition of Office Depot. For the full year 2015, the company expects to generate more than $600 million of free cash flow.

Presentation of Non-GAAP Information

This press release presents certain results with and without restructuring and related charges, long-lived asset impairment, inventory write-downs, and costs related to the acquisition of Office Depot. This press release also presents certain results both with and without the impact of fluctuations in foreign currency exchange rates and with and without the impact of store closures. The presentation of these results, as well as the presentation of free cash flow, are non-GAAP financial measures that should be considered in addition to, and should not be considered superior to, or as a substitute for, the presentation of results determined in accordance with GAAP. Management believes that the non-GAAP financial measures enable management and investors to understand and analyze the company’s performance by providing meaningful information that facilitates the comparability of underlying business results from period to period. Management uses these non-GAAP financial measures to evaluate the operating results of the company’s business against prior year results and its operating plan, and to forecast and analyze future periods. Management recognizes there are limitations associated with the use of non-GAAP financial measures as they may reduce comparability with other companies that use different methods to calculate similar non-GAAP measures. Management generally compensates for these limitations by considering GAAP as well as non-GAAP results. In addition, management provides a reconciliation to the most comparable GAAP financial measure. With respect to earnings per share and free cash flow, financial guidance on a GAAP basis has not been provided given that current estimates for charges to be incurred related to restructuring initiatives, the planned acquisition of Office Depot, and the potential related impact on cash flow represent broad ranges which are based on preliminary analysis and are subject to change as plans become finalized.

Today's Conference Call

The company will host a conference call today at 8:00 a.m. (ET) to review these results and its outlook. Investors may listen to the call at http://investor.staples.com.

About Staples

Staples makes it easy to make more happen with more products and more ways to shop. Through its world-class retail, online and delivery capabilities, Staples lets customers shop however and whenever they want, whether it’s in-store, online or on mobile devices. Staples offers more products than ever, such as technology, facilities and breakroom supplies, furniture, safety supplies, medical supplies, and Copy and Print services. Headquartered outside of Boston, Staples operates throughout North and South America, Europe, Asia, Australia and New Zealand. More information about Staples (SPLS) is available at www.staples.com.

Certain information contained in this news release constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995 including, but not limited to, the information set forth under “Outlook” and other statements regarding our future business and financial performance. Any statements contained in this news release that are not statements of historical fact should be considered forward-looking statements. You can identify forward-looking statements by the use of the words “believes”, “expects”, “anticipates”, “plans”, “may”, “will”, “would”, “intends”, “estimates”, and other similar expressions, whether in the negative or affirmative, although not all forward-looking statements include such words. Forward-looking statements are based on a series of expectations, assumptions, estimates and projections which involve substantial uncertainty and risk, including the review of our assessments by our outside auditor and changes in management’s assumptions and projections. Actual results may differ materially from those indicated by such forward-looking statements as a result of the risks and uncertainties, including but not limited to those factors discussed or referenced in our Annual Report on Form 10-K filed on March 6, 2015, as well as our quarterly reports on Form 10-Q filed with the SEC since the 10-K, under the heading “Risk Factors” and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. In addition, any forward-looking statements represent our estimates only as of the date such statements are made (unless another date is indicated) and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

Note that certain percentage figures shown in the tables above may not recalculate due to rounding.

This presentation refers to growth rates in local currency so that business results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Staples' business performance. To present this information, current period results for entities reporting in currencies other than U.S. dollars are converted into U.S. dollars at the prior year average monthly exchange rates.

Free cash flow is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less capital expenditures. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the company's ability to generate cash and invest in its business.

CONTACT:
Staples, Inc.
Media Contact:
Kirk Saville, 508-253-8530
or
Investor Contact:
Chris Powers or Kevin Barry, 508-253-4632/1487