Tags: Earns | Staples

Staples Profit Rises 36% on Tax Refund, Higher International Revenue

Wednesday, 17 Aug 2011 08:50 AM

Staples Inc. said Wednesday its second-quarter net income rose 36 percent. International revenue was strong, and customers at its North American stores spent a little more, although traffic was lighter.

The nation's largest office supply retailer also gave a full-year forecast that exceeded Wall Street's expectations.

Net income for the three months ended July 30 rose to $176.4 million, or 25 cents per share, from $129.8 million, or 18 cents per share last year. The quarter included the first weeks of the crucial back to school season.

Excluding a tax refund, net income totaled 22 cents per share. That's better than the 20 cents per share analysts expected, according to FactSet.

Revenue rose 5 percent to $5.82 billion. Analysts expected $5.64 billion.

Some of that revenue increase was offset by increased spending on labor and marketing in North America.

Revenue from Staples' North American Delivery business, which delivers office supplies and breakroom supplies to businesses, rose 3 percent to $2.4 billion.

Its North American retail revenue rose 1.7 percent to $2 billion. Revenue in stores open at least one year was flat. The measure is a key indication of a retailer's financial health because it excludes stores that open or close during the year. The number of customers was down slightly but that was offset by slightly higher purchases.

The Framingham, Mass.-based company says international revenue rose 15 percent to $1.3 billion, helped by favorable foreign currency exchange.

Office suppliers have suffered during the recession and its aftermath, as consumers and small businesses hold back on spending. In an effort to improve results, Staples is opening smaller stores and offering more electronics like tablets and e-book readers.

Still, Staples has fared better than its smaller rivals Office Depot and OfficeMax, leaving some analysts to speculate about consolidation in the industry.

In the third quarter, Staples expects net income of 46 cents to 48 cents per share on a revenue increase in the low single-digit percentage range. Analysts expect 46 cents per share.

The company predicts yearly net income of $1.39 to $1.45 per share, excluding a tax refund. That's up from the first quarter, when Staples lowered its guidance to $1.35 to $1.45 per share. Analysts predict net income of $1.36 per share.

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Staples Inc. said Wednesday its second-quarter net income rose 36 percent. International revenue was strong, and customers at its North American stores spent a little more, although traffic was lighter. The nation's largest office supply retailer also gave a full-year...
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2011-50-17
Wednesday, 17 Aug 2011 08:50 AM
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