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 user 2007-08-22 at 1:08:00 pm Views: 34
  • #18598

    Staples 2Q Profit Up 11 Percent
    07 BOSTON- Staples  Inc. on Tuesday said its second-quarter profit rose
    11 percent as lower sales of items such as office furniture were offset
    by gains at its copy and print centers.But the world’s biggest office
    products supplier slightly pulled back its full-year earnings
    expectations amid a sluggish North American retail market. Its latest
    profit increase was largely driven by its overseas and product delivery
    businesses.Its shares fell 41 cents, or 1.7 percent, to $22.90 in early
    trading Tuesday.Framingham-based Staples reported net income of $178.8
    million, or 25 cents per share for the three months ended Aug. 4
    compared with a profit of $161.2 million, or 22 cents per share, a year

    Sales rose 11 percent to $4.29 billion from $3.88 billion a year ago.
    most recent quarter’s results were in line with the consensus forecast
    of analysts surveyed by Thomson  Financial, who expected net income of
    25 cents per share on revenue of $4.3 billion.Sales at North American
    retail stores open at least a year fell 2 percent in the latest
    quarter, compared with a 4 percent rise a year earlier.Ron Sargent,
    Staples’ chairman and chief executive, said the same-store sales
    decline was driven by a slowdown in consumer spending amid worries
    about a housing slump, credit crunch and high energy prices.It’s not
    just us, but other retailers as well,” Sargent told analysts on a
    conference call. “Consumers are buying less stuff as they worry about
    the future.”However, Sargent said Staples’ business customer-driven
    delivery business appeared to be largely immune from the retail slump.
    Staples’ North American office products delivery business posted a 16
    percent sales gain in the most recent quarter.Michael Miles, Staples’
    president and chief operating officer, said Staples was “not satisfied
    with our results this quarter, and we’re working hard to turn our
    results around.”Staples’ initiatives to attract more customers to its
    more than 1,900 stores include an expanded loyalty program to reward
    regular customers with discounts, and enticements to encourage greater
    sales of ink cartridges.Staples’ chief rival, Office Depot  Inc., last
    month reported a 5 percent second-quarter decline in same-store North
    American sales. Another rival, OfficeMax  Inc., reported a 1.6 percent
    same-store sales gain.Staples’ overall North American sales, including
    sales from newly opened stores, rose 5 percent in the latest
    quarter.Staples said sales of office supplies and business machines
    were slow in the quarter, in addition to furniture. Sales were strong
    for laptop computers, ink and software, in addition to copy and print
    services.International sales rose 18 percent, but the gain was a more
    modest 11 percent accounting for currency fluctuations. International
    sales at stores open at least a year grew 7 percent.

    The company
    now expects to post earnings growth of about 15 percent for the third
    quarter and full fiscal year, or about $1.43 per share for the year. In
    May, Staples had forecast full-year earnings at the low end of a range
    of 15 percent to 20 percent.Analysts forecast a full-year profit of
    $1.44 per share, on average.