The company results were weak because consumers put off purchases of bigger-ticket items such as computers, business machines and office furniture due to the uncertain economy.

Staples, which invented the office superstore concept and does business in 27 countries worldwide, said its North American retail sales fell 14% from a year ago to $2.4 billion. Same-store sales fell 13% as average order size dropped in addition to the weakness in durable goods.

During its conference call the company said sales remained down in the current quarter, but there was some improvement in same-store sales.

International sales grew by 62% overall when factoring in the July 2008 purchase of Dutch rival, Corporate Express, but were down 24% without it, showing that the economic difficulties are even worse overseas. Staples said it is still expecting cost savings of up to $300 million from the Corporate Express purchase.

Staples CEO Ron Sargent said that 2008 was an exciting year because of the Corporate Express purchase, but that it was also the most challenging year in company history.

Though he said he wasn't pleased with the top-line performance, he noted the company did a great job controlling expenses to achieve strong operating margins, tightening its capital spend and managing inventory. He said the company generated a record free cash flow of more than $1.3 billion despite all the challenges.

The company said it expects the weak economic climate to continue throughout 2009, and is taking measures to further cut costs, including reducing head count and putting store remodeling plans on hold.

It said it will open 55 stores in the United States and Canada this year, down from the 75 stores it said it would open back in December. It also said it would not provide earnings guidance going forward due to the murky economic environment.

Today's lack of major share-price decline despite an earnings miss may indicate a bottom has been reached in the stock.

SPLS is a financially strong company and has liquidity of about $1.6 billion, including $634 million in cash and cash equivalents.

Investors may find comfort in Mr. Sargent's closing comment, "And while we're not satisfied with our absolute results, our relative performance has never been stronger."

Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, rates SPLS a B or Buy.

Jamie Dlugosch is a contributor to OptionsZone.com.