Staples Reports Q1 Net, Sales Up
By Steve Smith -- TWICE, 5/22/2006
Framingham, Mass. — Staples reported total company sales up 9 percent to $4.2 billion and net income rose 26 percent year-over-year, to $186 million, for the first fiscal quarter of the year, ended April 29, vs. the same period last year.
First-quarter North American retail comparable sales increased 1 percent compared to the same period in. 2005, reflecting positive customer traffic and strong comps in core supplies categories and copy and print services, offset by weaker performance in furniture and technology.
Total North American retail sales grew 7 percent. North American delivery continued its strong growth, increasing sales 17 percent vs. last year, the chain reported. International sales rose 6 percent in local currency, but declined 1 percent in U.S. dollars due to a $40 million negative foreign exchange impact.
Staples said highlights for its first fiscal quarter included:
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Total company operating income improved 79 basis points year-over-year, to 6.7 percent, with all business units growing profits much faster than sales;
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North American retail operating margins were 7.8 percent, up 63 basis points vs. 2005, reflecting strong gross margin comps due to improved product mix, with strength in supplies and services;
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North American delivery continues its momentum, with strong sales growth across all product categories, improving customer satisfaction scores, and a 64 basis point improvement in operating profit, to 9.4 percent;
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Inventory turns rose 15 basis points, to 5.8 percent; and
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Staples opened two new stores in the United States, three stores in Canada and one store in Portugal. The company now operates 1,786 stores worldwide.
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