Staples Q3 Profit Up 14%

FRAMINGHAM, MA-Buoyed by a 9% increase in its North American sales to $2.45 billion and a strong showing by its delivery and copying businesses, third quarter total profits grew by 14% for office supply retailer Staples Inc., the company said Tuesday.

Earnings for the period ending Oct. 29 rose to $238 million, or 32 cents per share, up from $209 million, or 28 cents, for the same quarter a year earlier. Total sales for the period also increased 11% to $4.25 billion from $3.83 billion a year ago.

But the 14% rise in profits fell short of earlier years when the Framingham, MA-based office supply giant racked up 12 consecutive quarters of 20% or better in earnings growth.

The strong financial figures were driven by growth in the company’s North American copying and delivery businesses, which offset a 2% decline in Staples’ international sales during the quarter. In North America, delivery services grew to $1.29 billion, or 18%, in the last three months, accounting for about one-third of the firm’s total revenue. The increase followed a second quarter gain of 17%. Sales at stores open at least a year were also up 3%, fueled by an increase in Staples’ copying business and growing sales of computers and digital cameras.

But Staples’ foreign sales were negatively impacted, dropping 2% in the quarter due to a slowing of the European economy and the costs associated with integrating its overseas business.

The nation’s largest office supply retailer, which operates 1,748 retail stores in 21 countries, said it expects fourth quarter earnings of 38 cents per share, on par with Wall Street estimates, with per-share earnings growth for 2006 to be between 15% and 20% for the year. Fourth quarter sales also are expected to increase by 10%.