This summary is based on the third quarter fiscal 2007 earnings call conducted by Staples, Inc. (SPLS: chart) on November 27, 2007.

Management:

President, COO: Mike Miles
Chairman, CEO: Ron Sargent
Vice Chairman, CFO: John Mahoney
President, NAD: Joe Doody
President U.S. Stores: Demos Parneros
VP Investor Relations: Laurel Lefebvre

Key Investors Issues

- EPS were 38 cents per share compared to 39 cents per share last year.
- Net income was $274.5 million compared to $289.9 million a year earlier.
- Sales rose to $5.17 billion from $4.76 billion a year ago.

Third Quarter Highlights

Total company sales of $5.2 billion were up 8.7% versus last year''s third quarter.

- Excluding currency benefit in Canadian and other International businesses, sales grew 6.1%.
- Gross profit margin increased by 48 basis points to 29.13%.
- Improvements in supply chain in North American Delivery and a lower mix of technology in North American retail and international drove the increase.
- The company is seeing nice leverage in distribution costs as new NAD fulfillment centers are performing well. Deleverage and rent expense on softer sales in North American retail partially offset these gains.

Operating and selling expenses deleveraged 9 basis points versus last year''s third quarter at 15.94% of sales.

- All three businesses did an excellent job managing expenses while continuing to invest in new growth ideas.
- General and administrative expenses and the rate of sales held essentially flat at 4.08% as the company carefully managed expenses and made progress in European cost structure. Variable compensation expense was a contributor, as the company is accruing for bonuses at lower rate than last year.

Total inventory turns were down 9 basis points versus last year to 5.7 turns.

- Supply chain capabilities continue to improve and the company has made substantial progress in working capital this year by refocusing on Summit Supply Chain discipline.
- Staples had $1.8 billion in liquidity, including cash and short-term investments of $1 billion and available lines of credits of about $800 million.

- The company repurchased 8 million shares for $181 million and now has approximately $1.25 billion remaining on $1.5 billion authorization.
- Weighted average shares outstanding declined by under 21 million shares year over year.

The company has added 450 stores and it operates a portfolio of four unique store formats to take advantage of different market opportunities.

The company launched the first Dover store in 2001 and it operates 750 Dover format stores. Since 2001, it has added $3 billion of sales. The company has tripled operating profit and it has increased operating margin 500 basis points over that timeframe in retail business.

Supply chain and service capabilities are better.

- The company has developed several businesses that it didn''t even think about a few years back, businesses like copy and print, Jansan, tech services, and logo merchandise.
- In delivery, the company has added $3 billion of sales and nearly 400 basis points of operating margin since 2001.

On the international side, the company has a much stronger European business overall.

- From a fledgling delivery business in two countries in 2001 it has established a delivery platform with scale in 15 European countries. In retail, the company has cracked the code for success in key markets like the U.K. and Germany.
- Sales in international segment have more than doubled in the last five years and the company has built a foundation for long-term, profitable growth and it is on its way to achieving 7.5% operating margin goal for international.
- Since 2001, top line has grown 11% per year on average.

- Operating income dollars have almost tripled and operating margin improved by more than 300 basis points.
- Earnings per share grew 24% per year on average over the same period and strong performance on the P&L, combined with consistent capital discipline, has driven steady increases and return on net assets and that is the metric that the company uses to measure shareholder value.
- RONA has increased 550 basis points to 14%, well above long-term cost of capital of 11.7%.