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Staples' Q2 Profits Up On Flat Sales

8/19/2010 09:27:39 AM Eastern

Framingham, Mass. - No. 1 office-supply chain Staples reported higher
profits on flat sales for the second quarter, ended July 31.

Net income increased 40 percent to $130 million for the three-month
period on stagnant sales of $5.5 billion company-wide.

Retail sales in North America rose 2 percent year over year to $2 billion
while same-store sales were flat, attributable to reduced customer purchases
despite increased traffic. Operating income rate increased slightly to 5.3
percent due to increased product margins and reduced depreciation, distribution
and marketing expense, offset by capital investments in growth initiatives.

Staples opened two stores and closed two stores during the quarter in
North America, ending the period with 1,888 locations on the continent.

 "Staples continues to deliver
strong earnings growth in a challenging sales environment," said chairman/CEO Ron
Sargent. "We're seeing good progress in our initiatives to grow technology,
copy and print, and facilities supplies."

International sales were $1.2 billion, a decrease of 6 percent in U.S.
dollars and two percent in local currency.

Looking ahead, the company anticipates a modest economic recovery during
the second half of 2010, with third-quarter and full-year sales projected to increase
in the low single-digits.

Staples operates in 26 countries throughout North and South America,
Europe, Asia and Australia, serving consumers and small to large businesses.
The $24 billion company has 91,000 associates, credits itself with having
invented the office superstore concept in 1986, and said it ranks second in
e-commerce sales worldwide.

 

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