Lowe’s (NYSE:LOW), Staples (Nasdaq:SPLS), OfficeMax (NYSE:OMX), Office Depot (NYSE:ODP), Should See Little Impact from Australian Floods

Commenting on their hardline retail universe with exposure to Australia, FBR Capital said they don't see much impact on Lowe’s (NYSE:LOW), Staples (Nasdaq:SPLS), OfficeMax (NYSE:OMX) or Office Depot (NYSE:ODP) at this time.

FBR noted, "We have received questions and there have been reports of a potential negative impact to the Australian GDP from floods in Queensland Australia. Within our hardline retail universe, four companies have what looks to be relatively insignificant exposure in Australia. Staples (Underperform) & OfficeMax (Market Perform) have the most exposure with 4% of total company sales in Australia. Office Depot’s (Outperform) exposure is extremely limited, via license/alliance. Lowe’s (Market Perform) is in the infancy stages of a joint venture in Australia which was created 8/24/09 with the first stores to open in FY2011, and therefore has no exposure. The flooding is centered around eastern Queensland, so not all of Australia is exposed. There have been some product delays in these areas, but they haven’t prolonged, based on our discussions with the companies. Australia is a higher margin market for Staples & OfficeMax. For Staples, as an example, Australia garners nearly double the company's international EBIT margins at 6% vs. total international EBIT margins of 3.2%. All in, the companies may have to speak to this during their quarterly earnings calls, related to their international divisions, however the impact is considered insignificant and isolated at this stage. We have no changes to estimates."

Lowe's closed Wednesday at $24.44, up $0.05, or 0.21 percent. Staples closed at $23.49, gaining $0.61, or 2.67 percent. OfficeMax ended the trading session at $17.91, up $0.70, or 4.07 percent. Office Depot closed trading at $5.87, the same as the session the day before.