Staples Q3 net income up 29 percent

14 November 2006 — Framingham (MA): Staples has announced strong results for its Q3 period.

The company drove strong performance in each of its three businesses and gained market share, as expected by analysts at Citigroup.


Total company Q3 sales increased 12 percent to $4.8 billion compared to the $4.2 billion reported during Q3 2005.


Net income rose 29 percent year-over-year to $290 million, and EPS, on a diluted basis, increased 30 percent to $0.39, from the $0.30 achieved during Q3 last year.


According to the retailer: "Q3 2006 earnings results reflect a lower tax rate, due to the favourable resolution of certain tax matters, and a correction for prior years’ stock-based compensation."


Excluding these items, net income grew 18 percent to $265 million and earnings per share, on a diluted basis, were $0.36, a 20 percent increase versus Q3 2005.


Q3 North American Retail same-store sales increased four percent versus 2005, attributed to a strong back-to-school season and higher average order sizes.


Total North American Retail sales rose 9 percent and North American Delivery grew sales 16 percent versus last year.


International sales rose 10 percent in local currency and 15 percent in US dollars, with five percent comparable store sales growth in European Retail.


Chairman and CEO Ron Sargent said: "While we continue to improve margins, we’re focused on driving profitable growth, and we’re pleased to see top line momentum in every part of our business."


For the full year, the company expects to exceed its previously announced earnings guidance of 15 to 20 percent growth, excluding the Q3 tax benefit and the correction for prior years’ stock-based compensation.


The retailer expects low double-digit growth for the total company on the top line and a positive, low single-digit comparable sales increase in North American Retail.