Staples (NASDAQ:SPLS), the 17-year-old company that pioneered the office-supply superstore concept, reported boffo earnings today for its second quarter.
Net income advanced by a whopping 47% over year-ago levels to $88 million. Quarterly sales rang in at $2.87 billion. Sales at North American stores open at least a year (referred to by those in the know as "same-store sales") increased by 6%. Given our current sluggish economy and many businesses' tentative purchasing outlooks, that 6% is pretty welcome news.
A Reuters report noted that, "To boost sales, Staples has been improving lighting and product presentation, hoping to make its nearly 1,500 stores more shopper friendly. Staples has also increased marketing to small businesses that use a greater number of more profitable items such as ink cartridges."
Management engaged in a common Wall Street dance today, expressing confidence that Staples would exceed analyst earnings estimates for the full year, which was met with huzzahs, an upward-propelled stock price, and upgrades (a U.S. Bancorp Piper Jaffray analyst upped his rating to "strong buy").
Such ratings make Fools wonder what the difference really is between "buy" and "strong buy" -- isn't the bottom line that we're being urged to buy?
Meanwhile, if you're interested in Staples, keep an eye on its competitor Office Depot (NYSE:ODP). It, too, is expecting rosy results.
You can read more of our thoughts on analyst ratings in this Rex Moore article . And if you crave stock recommendations, look over our investment newsletters , which feature our own independent analysts' best stock ideas.
