Office supply giant Staples (SPLS) posted surprisingly high numbers that exceeded both revenue estimates and EPS estimates. Staples projections for the next quarter and 2nd half of the fiscal year were also rather upbeat.


They continue to gain market share in their North American delivery business. The North American Delivery sales for the second quarter were $2.4 billion, showing an increase of 3.1% from the year-ago period. The North American Delivery unit caters mainly to business customers.


Staples continues to see sales rising at a low, single-digit percentage rate for the full year. Its net income rose to $176.4 million, or 25 cents a share, in the second quarter ended July 30, from $129.8 million, or 18 cents a share, a year earlier. Excluding a tax refund, it earned 22 cents a share. Based on that, analysts were expecting 19 cents a share, according to Thomson Reuters I/B/E/S. Sales rose 5.2 percent to $5.82 billion, while analysts had expected $5.65 billion.

With the back-to-school season having started, the focus has shifted to how effectively the Office Suppliers can utilise the season to their advantage. "In early July, we kicked off back-to-school in the Southeast markets and the season is off to a good start," Staples CEO Ron Sargent said on a conference call.

The comments were in contrast to their smaller rival OfficeMax. "While it is early in the back-to-school season, we have seen softer traffic trends versus the prior year," OfficeMax Chief Executive Officer Ravi Saligram said on August 2.

In general, most Office suppliers have suffered during the recession and its aftermath, as consumers and small businesses are seen to be holding back on spending. In an effort to improve results, Staples is opening smaller stores and offering more electronics items such as tablets and e-book readers.

 

Both Office Depot and Office Max have seen their market capitalization disintegrate to less than $1b, while Staples is at a strong $10B+ in market cap.