Staples Reaffirms Profits

FRAMINGHAM, MA-Office supply retailer Staples Inc. reaffirmed its profit expectations for the year, saying it expects full year profits of $1.11 a share and earnings to grow by up to 20% during the next fiscal year.

That news, along with an announcement by the nation’s largest office supply chain that it would implement a $1.5 billion stock buyback plan, sent the company’s shares up by 1.8% Friday.

“We’re on track to deliver even better performance than we did last year,” Ronald Sargent, the company’s chairman and chief executive officer, said during the firm’s annual investors and analysts conference Friday. Sargent said strong sales growth has widened the gap between Staples and its competitors and made the office supply giant a formidable contender in the international market where it operates in 21 countries.

The Framingham, MA-based retailer, which runs about 1,695 stores in addition to its mail order, e-commerce and contract businesses, said strong sales growth for the third quarter and revenue growth for the full year should push into the low double digits with per share earnings for next year forecast at between $1.20 and $1.26, including about 7 cents to 8 cents a share in stock option expenses. Average analysts ratings put per share earnings at $1.27.

On a separate issue, the company said it also has authorized its board of directors to repurchase up to $1.5 billion of its common stock beginning in November when an existing $1 billion repurchase program ends. The new repurchase program will run through 2007..

The company also recommended that shareholders declassify the board of directors to allow each of its 17 directors to be elected annually. Currently, the company’s board holds staggered three year terms. Shareholders will vote on that issue during the company’s annual shareholder meeting in 2006.