Toner News Mobile › Forums › Latest Industry News › *NEWS*STAPLES RINGS UP 19% PROFIT GAIN
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AnonymousInactiveStaples rings up 19% profit gain
Office supply retailer’s second-quarter results spearheaded by gains in North American market share.
NEW
YORK — Staples Inc., the No. 1 specialty office supplies retailer,
said Tuesday that quarterly profit rose 19 percent, driven by market
share gains in North America and improvements in its international
operations.Net income for the second quarter ended July 29 rose to
$161.2 million, or 22 cents per share, from $135.2 million, or 18
cents, a year earlier.The results matched the average outlook of
analysts polled by Reuters Estimates.Total sales rose 12 percent to
$3.88 billion from $3.47 billion, modestly exceeding analysts’ average
forecast of $3.81 billion.Sales at North American retail stores open at
least a year rose 4 percent, helped by strong sales of its mobile
computing products, core office supplies, ink and toner products and
copy and print services. Staples (Charts) said there was also improved
performance in its office furniture category, which had experienced a
slowdown in recent quarters.The company, which is trying to expand
margins with private-label products, said it is on track to reach its
goal of 20 percent of sales from Staples-brand products.Staples said it
expected low double-digit percentage sales growth for the third quarter
and earnings-per-share growth of 15 to 20 percent, which it says is in
line with analysts’ estimates.The company, based in Framingham, Mass.,
also affirmed its full-year outlook for earnings per share growth at
the high end of the 15-20 percent range.Analysts, on average, were
expecting earnings of 35 cents per share for the third quarter and
$1.26 for the year.Staples shares, whose current price is roughly 18.7
times earnings estimates for the current fiscal year, trade at a
discount to rivals Office Depot Inc., which trades at 19.6 times the
current year’s estimates, and OfficeMax Inc., which trades at 22.2
times.As of Monday’s close, Staples shares had fallen 15 percent since
May 11, when they reached a 52-week high of $27.71.
Staples Q2 EPS Rises 22% On North American Sales; Guides Q3, FY06
Tuesday
morning, Staples Inc.a distributor of office products, revealed
second-quarter results, reporting a 22% increase in net income per
share, on market share gains in North America and steady progress in
its International business. The earnings per share for the quarter came
in line with analysts’ estimates. In addition, the company provided
earnings and sales outlook for the third quarter and full-year.For the
second-quarter, the Framingham, Massachusetts-based company’s net
income increased to $161.17 million or $0.22 per share from $135.18
million or $0.18 per share in the year-ago quarter. On average, fifteen
analysts polled by First Call/Thomson Financial estimated earnings of
$0.22 per share for the quarter.Net sales for the quarter increased 12%
to $3.88 billion from $3.47 billion in the previous-year quarter. Wall
Street analysts estimated revenues of $3.86 billion for the quarter.On
a segmental basis, North American retail sales for the quarter
increased to $2.03 billion from $1.85 billion in the previous-year
quarter. The company said that North American retail sales continued to
be strong in categories like mobile computing and accessories, core
office supplies, copy and print, ink and toner, and furniture. North
American retail comparable stores sales rose 4% from the previous year.
North American Delivery sales for the quarter climbed to $1.34 billion
from $1.15 billion in the comparable period of 2005. Sales from
International operations increased to $509.81 million from $472.46
million in the last-year quarter.Cost of goods sold and occupancy costs
climbed to $2.78 billion from $2.48 billion in the similar quarter of
the previous year. Gross profit for the quarter increased to $1.10
billion from $939.39 million in last-year quarter. Gross profit margin
for the quarter declined on costs related to fulfillment centers, fuel
and paper in North American Delivery.Total operating expenses
for the quarter increased to $844.34 million from $775.57 million in
the year-ago quarter.Operating income for the quarter climbed to
$252.26 million from $213.81 million in the comparable period of the
previous year.For the six months, the company’s net income rose to
$347.25 million or $0.47 per share from $282.92 million or $0.38 per
share in the corresponding period of last year. Net sales for the
period increased to $8.12 billion from $7.37 billion in the prior-year
quarter.Looking ahead to the third quarter, the company provided
outlook for earnings growth in the range of 15-20% and sales growth in
low double-digits. Analysts estimate the company to earn $0.35 per
share on revenues of $4.66 billion for the quarter.For the full-year,
the company expects earnings growth to be at the high end of the
previously forecasted range of 15-20%. Street expectations of earnings
for the year are $1.26 per share on revenues of $17.73 billion.For the
first-quarter, the company had reported a 26% growth in profit to $186
million from $147.7 million in the previous-year quarter, on strong
North American deliveries. On a per share basis, earnings grew 25% to
$0.25 from $0.20 in the year-ago quarter. Sales for the quarter
increased 9% to $4.2 billion from $3.9 billion in the comparable
quarter of the prior year.Among the company’s peers, Florida-based
Office Depot Inc.revealed an increase in second-quarter profit to
$118.31 million or $0.41 per share from $100.10 million or $0.31 per
share in the prior-year quarter. Quarterly sales grew 4% to $3.49
billion from $3.36 billion in the previous-year quarter. Another
competitor, Illinois-based OfficeMax Inc. reported a net income for the
second-quarter compared to a net loss in the year-ago quarter. Net
income for the quarter was $27.40 million or $0.35 per share compared
to net loss of $21.54 million or $0.28 per share in the corresponding
quarter a year ago. Sales for the quarter declined to $2.04 billion
from $2.09 billion in the last-year quarter.SPLS closed Monday’s
regular trading session at $23.53, up $0.01, on a volume of 1.94
million shares. In Tuesday’s pre-market trading, the stock is currently
trading at $24.00, a gain of $0.47 or 2.00% from Monday’s close. -
AuthorAugust 16, 2006 at 11:53 AM
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