Staples Keeps Clicking

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Staples (Nasdaq: SPLS) shares got a small bump yesterday as the company continues to roll. The nation's largest office supply chain saw third-quarter revenues jump 13% year over year to $3.5 billion. Meanwhile, net income climbed 29% to $166 million, or 22% to $0.27 on a per share basis.

Driving North American retail same-store sales growth of 4% were stronger furniture sales, gains in business machines and services, and a healthy back-to-school season. And as North American delivery sales gained 6.7% to $971 million, total European operations grew an impressive 56% to $393 million, flipping to an operating profit. Notably, both retail and delivery operations in Europe were profitable.

Staples continues to benefit from its increasingly shopper-friendly stores. In addition, the company has moved to improve margins by focusing on higher-margin products such as ink cartridges, and by shifting marketing efforts toward Staples-branded products. As a result, Staples recorded operating margins of 7.66% -- an all-time high for the third quarter.

Fool writer Rick Aristotle Munarriz penned a thorough comparison of Staples and Office Depot (NYSE: ODP) -- its top competitor -- back in August. You might also want to keep an eye on Office Max (NYSE: OMX), which is soon to be acquired by Idaho-based Boise Cascade (NYSE: BCC) in what was a $1.2 billion cash-and-stock transaction at the time the deal was announced.

Looking ahead, Staples says it's comfortable with the consensus fourth-quarter earnings estimate of $0.41 per share. The company also says it expects earnings-per-share to grow another 20% in 2004. With these kinds of numbers, Staples' performance is hard to argue with.

Staples or Office Depot? Pick your winner on the Staples and Office Depot discussion boards! Only at Fool.com.

Jeff Hwang can be reached at JHwang@fool.com.