FRAMINGHAM, Mass. (AP) -- Staples Inc. said Wednesday its second-quarter net income rose 36 percent. International revenue was strong, and customers at its North American stores spent a little more, although traffic was lighter.
The nation's largest office supply retailer also gave a full-year forecast that exceeded Wall Street's expectations.
Excluding a tax refund, net income totaled 22 cents per share. That's better than the 20 cents per share analysts expected, according to FactSet.
Revenue rose 5 percent to $5.82 billion. Analysts expected $5.64 billion.
Some of that revenue increase was offset by increased spending on labor and marketing in North America.
Revenue from Staples' North American Delivery business, which delivers office supplies and breakroom supplies to businesses, rose 3 percent to $2.4 billion.
Its North American retail revenue rose 1.7 percent to $2 billion. Revenue in stores open at least one year was flat. The measure is a key indication of a retailer's financial health because it excludes stores that open or close during the year. The number of customers was down slightly but that was offset by slightly higher purchases.
The Framingham, Mass.-based company says international revenue rose 15 percent to $1.3 billion, helped by favorable foreign currency exchange.
Office suppliers have suffered during the recession and its aftermath, as consumers and small businesses hold back on spending. In an effort to improve results, Staples is opening smaller stores and offering more electronics like tablets and e-book readers.
Still, Staples has fared better than its smaller rivals Office Depot and OfficeMax, leaving some analysts to speculate about consolidation in the industry.
On Wednesday August 17, 2011, 7:45 am By Dhanya Skariachan
NEW YORK (Reuters) - Staples Inc (NasdaqGS:SPLS - News) reported a better-than-expected quarterly profit on currency benefits and an uptick in sales to its business customers in North America, prompting the largest U.S. office supply chain to raise its profit outlook.
The news boosted Staples' shares by 8.3 percent to $15.40 in premarket trading.
Smaller rivals have also shown some improvement on the profit front lately, with Office Depot Inc (NYSE:ODP - News) reporting a smaller-than-expected quarterly loss and OfficeMax Inc (NYSE:OMX - News) posting better-than-expected earnings.
Many investors look at office supply retailers as a good gauge of the economy, as demand for their products is closely tied to white-collar employment rates. Sales at all three chains have suffered in the weak U.S. economy, and the companies continue to keep a tight rein on costs to offset weak demand.
For the full year, Staples continues to see sales rising at a low-single-digit percentage rate.