Staples Tacks On Gains

The retailer hits targets and guides in line.
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Staples (SPLS) matched third-quarter earnings targets as same-store sales rose 4% from a year ago.

The Framingham, Mass., office supplier made $290 million, or 39 cents a share, for the quarter ended Oct. 28, up from the year-ago $224 million, or 30 cents a share. Revenue rose to $4.76 billion from $4.25 billion a year earlier.

The latest quarter benefited from a lower tax rate, due to the favorable resolution of certain tax matters, and included a correction for prior years' stock-based compensation. Excluding these items, latest-quarter earnings were 36 cents a share. Analysts were looking for a 36-cent profit on sales of $4.68 billion.

Third quarter North American Retail comparable store sales increased 4% vs. 2005, reflecting an excellent back-to-school season, strong traffic, and higher average order size. Total North American Retail sales rose 9% and North American Delivery grew sales 16% vs. last year. International sales rose 10% in local currency and 15% in dollars, with 5% comparable store sales growth in European Retail.

Staples said it expects to make $1.43 to $1.49 a share for next year, in line with the $1.47 Wall Street estimate.