Staples Inc., the world's largest office-supplies retailer, posted record first-quarter sales of $4.9 billion on Tuesday and stood by its 2008 outlook, despite its warning of continued economic weakness throughout the year.
First-quarter net income came to $212.3 million, or 30 cents a share, up from $209.1 million or 29 cents a share, a year ago. Sales increased 6 percent to $4.9 billion from $4.6 billion a year ago. Analysts were looking for earnings of 30 cents a share on $4.82 billion in revenue.
North American retail sales increased by 2 percent and comparable-store sales fell 6 percent, reflecting declines in customer traffic and average order size, the company said.
International sales grew 8 percent, or 19 percent in U.S. dollars due to a $72 million foreign currency impact. International comparable-store sales rose 4 percent over last year.
According to Colin McGranahan, an analyst at Sanford C. Bernstein & Co. in New York, Staples showed impressive resilience in what has been a very challenging environment for office-products retail. McGranahan wrote in a research not that he recommends buying Staples shares.
Staples' shares rose 0.51 percent to $23.70 at 11.33 a.m. in Nasdaq Stock Market trading.
The Framingham, Massachusetts-based retailer said earnings were $212 million, or 30 cents per share, in the first quarter that ended May 3, compared with $209 million, or 29 cents per share, in the year-earlier period.
Staples opened 35 new stores in the U.S. and Canada in the first quarter as part of its plan to establish 100 new stores by the end of the fiscal 2008. Meanwhile, it opened 38 new stores worldwide in the first quarter.
Looking ahead, Staples expects the weak economic climate to continue throughout 2008 and so it's maintaining its previous full-year outlook for mid single-digit'' percentage sales growth and a `high single-digit'' earnings-per-share increase for the year ending January 31. The company said it expects flat earnings per share growth for the second quarter.