Staples Net Tops Forecasts

It sees earnings growth at the high end of previous guidance.
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Earnings rose 26% from a year ago in

Staples'

(SPLS)

first quarter, driven up by higher sales and margins.

Staples earned $186 million, or 25 cents a share, in the quarter, compared with $147.7 million, or 20 cents a share, a year ago. Sales rose 9% from a year ago to $4.24 billion. On average, analysts were forecasting earnings of 23 cents a share on sales of $4.26 billion, according to Thomson First Call.

In the company's North American retail segment, same-store sales rose 1% from a year ago, "reflecting positive customer traffic and strong comps in core supplies categories and copy and print services, offset by weaker performance in furniture and technology."

Overall, operating margins were 6.7% in the quarter, up 79 basis points from a year ago. In North American retail, operating margins were 7.8%, up 63 basis points from a year ago. The North American performance reflected "strong gross margin comps due to improved product mix, with strength in supplies and services."

For the second quarter, Staples sees EPS growth of 15% to 20% and sales growth in the low double digits. For the year, the company sees earnings at the high end of its previously issued growth range of 15% to 20%.