Sales Up at Staples: Fool by Numbers

On Aug. 21, Staples (Nasdaq: SPLS  ) announced earnings for the second quarter ended Aug. 4.

• Staples' sales were $4.3 billion, an increase of 10.6% from a year ago, as laptops flew off the shelves. However, furniture remained in place, causing North American comps to drop 2%.
• The company's international operating income rate improved significantly, helping the overall bottom line increase by 11%.
• The company continued its worldwide expansion, opening 23 stores in the U.S. and 13 elsewhere.
• Staples earns a three-star rating (out of a possible five) over at Motley Fool CAPS, as does competitor Office Depot (NYSE: ODP  ) ; OfficeMax (NYSE: OMX  ) gets just one star. Head on over to the CAPS community and offer your own opinion.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q2 2007	Q2 2006	Change
Sales	$4,290.4	$3,880.7	10.6%
Net Profit	$178.8	$161.2	11.0%
EPS	$0.25	$0.22	13.6%
Diluted Shares	726.1	744.1	(2.4%)

Get back to basics with the income statement.

Margin Checkup

	Q2 2007	Q2 2006	Change*
	28.2%	28.3%	(0.1)
	6.5%	6.5%	0.0
	4.2%	4.2%	0.0

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash + ST Invest.	$857.2	$1,041.4	(17.7%)
Accounts Rec.	$790.5	$631.2	25.2%
Inventory	$2,252.3	$1,903.7	18.3%

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable	$1,615.7	$1,403.6	15.1%
Long-Term Debt	$319.3	$514.6	(38.0%)

The balance sheet reflects the company's health.

Cash Flow Highlights

	YTD 2007	YTD 2006	Change
Cash from Ops.	$219.5	$128.6	70.6%
Capital Expenditures	$205.6	$253.7	(19.0%)
Free Cash Flow	$13.9	($125.1)	(N/A)

Free cash flow is a Fool's best friend.

Related Foolishness:

• Foolish Forecast: Sticking With Staples
• Don't Expect the Max From OfficeMax
• Oh, No, Office Depot

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Mike Cianciolo held no position in any of the companies in this article.