Staples Nails It, Ups Guidance

Staples

(SPLS)

Tuesday reported a 12% increase in first-quarter revenue, citing its focus on customer satisfaction and execution, as the office supply giant easily beats analysts' forecasts.

The Framingham, Mass.-based company had a net income of $125.7 million for the quarter, or 25 cents a share, on revenue of $3.45 billion, versus $24.8 million, or 5 cents a share, on revenue of $3.09 billion, a year ago.

On a GAAP basis, net income grew 400% from the year-ago period, which included a $62 million adjustment, worth 13 cents a share, related to tax and accounting changes.

The consensus estimate was for 22 cents a share.

The company said all segments of its business exceeded expectations and raised its earnings forecast.

Staples said it expects to achieve 20% EPS growth in the second quarter with revenue growing at a high single digit-rate. North American same-store sales are expected to grow in the low single-digits. The company also forecast 20% earnings growth for the full year

The consensus estimates are for 22 cents and $1.33 a share in the respective earnings periods.

In reporting first-quarter results in March, Staples said it expected earnings per share to grow 20% in the first quarter and full-year 2004. Revenue was expected to increase about 10%, while North American same-store sales were expected to post low-single digit growth.

Staples had record fourth-quarter and full-year results and said it would pay its first ever stock dividend this year.

Shares closed at $24.42 yesterday.