*NEWS*STAPLES RINGS UP 19% PROFIT GAIN

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*NEWS*STAPLES RINGS UP 19% PROFIT GAIN

 user 2006-08-16 at 11:53:00 am Views: 104
  • #16113

    Staples 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.