Staples Posts Strong Q1

"I'm very pleased to report record results for our first quarter. Once again, our team kicked off the new year with a great start," said Chief Executive Officer Ronald Sargent in announcing the company's strong first quarter performance during a conference call to investors Tuesday.

Net income was up to $159.4 million, or 21 cents a share, in the fiscal quarter ending April 30 while sales jumped 13% to $3.9 billion from $3.5 billion in the same period last year. Analysts had forecast net income would rise 20 cents per share, one cent below the actual 21 cents per share increase. News of the company's record quarter sent shares of the company's stock, which split 3-for-2 in April, up $1.02 to $21.56 by the close of Nasdaq trading Tuesday.

Sargent said the company's 13% increase in sales was particularly gratifying, especially since competitors have indicated that the office product market is weak. However strong sales across the board at Staples, Sargent said, indicates the market is fragmented, which has allowed the company to grow its market share.

Sales were particularly strong in the firm's North American stores which saw a 40% improvement in business. International comparable retail sales were flat, however, the Framingham, MA-based company said.

"The continued strength of our North American businesses provides us with the flexibility to invest in the many ideas that will sustain our growth in the years to come," noted Sargent, adding that he expects to expand the Staples business through new market business, new retail channels and new product lines.

Sargent said the world's largest office supplier, which operates 1,426 retail stores throughout the United States and Canada and 254 stores in Europe, expects the upward trend to continue through 2005 with revenue growth to be in the low double-digit range.