Staples Inc., the world's largest office-supplies retailer, said first-quarter profit rose 12 percent on deliveries of paper and increased sales in Europe.
Net income climbed to $209.1 million, or 29 cents a share, for the three months ended May 5 from $186.1 million, or 25 cents, a year earlier. The profit matched analysts' estimates, and Staples said second-quarter and full-year earnings per share will be at the ``low end'' of its forecast of 15 percent to 20 percent growth.
Sales at the division that sells paper and cleaning supplies directly to companies climbed 15 percent. International sales increased 16 percent to $632.8 million.
``They're continuing to take market share and grow the direct sales business,'' said Walter Todd, who helps manage $800 million, including 265,000 Staples shares, at Greenwood Capital Associates LLC in South Carolina. ``Clearly the turnaround in international continues.''
Staples also said today it acquired American Identity from Republic Financial Corp. American Identity sells T-shirts and baseball caps with company logos. Staples didn't disclose the terms of the transaction.
Revenue in the quarter rose 8.3 percent to $4.59 billion, Staples said today in a statement. The average sales estimate of 11 analysts was $4.66 billion, according to a Bloomberg survey.
Shares of Framingham, Massachusetts-based Staples, which operates more than 900 retail stores, declined 59 cents, or 2.3 percent, to $25.08 at 8:07 a.m. before the start of Nasdaq Stock Market composite trading. The stock fell 3.9 percent this year through yesterday.
Tempered Forecast
Staples forecast earnings per share of $1.43 to $1.49 for the year ending in 2008. Analysts estimated $1.48. The company tempered its forecast after first-quarter sales in North American stores fell short of its expectations.
Sales at North American stores open at least a year climbed 1 percent. Mitchell Kaiser, an analyst at Piper Jaffray Cos. in Minneapolis, projected a 3 percent increase. Staples said sales of furniture, fax machines and copiers trailed.
The retailer has spent more on advertising, helping to turn around its U.K. stores and French catalog sales. Staples is also expanding in China, India and other emerging markets.
``The turnaround of the international operations is gaining steam,'' Armando Lopez, a Morgan Stanley analyst based in New York, wrote in a May 14 research note. ``Staples made a number of changes and investments to the international operations, which are beginning to bear fruit.''
Office Depot Inc., the second-largest office-supplies retailer, said last month that sales at North American stores open at least a year fell 3 percent, the first drop in more than three years.
OfficeMax Inc. on May 3 reported profit that trailed analysts' estimates as sales at its stores fell for the fifth straight quarter. [via]
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