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