Financial Reports: Staples, Penney, More

Staples Enjoys Double-Digit 3Q Gains
Framingham, MA-based office supplies cataloger/retailer Staples (Nasdaq: SPLS), which includes the Quill and Medical Arts Press catalog divisions, grew its third-quarter sales 12%. What’s more, net income for the quarter climbed 26%.

For the three months ended Oct. 30, Staples had net income of $208.9 million on $3.8 billion in revenue. For the third quarter of fiscal 2003, it ad netted $165.8 million on sales of $3.4 billion.

Staples’ North American delivery business, which includes the catalogs, reached $1.1 billion in sales, up from $963.5 million last year. Operating income for the division rose 15%, driven by record account acquisition and retention.

North American retail sales were $2.3 billion, up from $2.1 billion last year. Revenue from European operations increased 24%, to $488.9 million.

3Q Net Income Soars at Penney
Third-quarter operating profit increased 66% at Plano, TX-based cataloger/retailer J.C. Penney Corp. (NYSE:JCP), to $346 million. And net income increased 86%, to $149 million from $80 million last year. The quarterly earnings include $47 million in one-time charges associated with early debt retirements. The company credits sales gains and continued improvement in gross margin and expense leverage for much of the dramatic improvement.

Net sales for the department stores and catalog/Internet segment increased 3%, to $4.5 billion from $4.3 billion for the third quarter of last year. Catalog/Internet sales increased 4%. Internet sales rose nearly 30 %. Comparable store sales improved nearly 3%.

Revenue Up, Loss Down at Vermont Teddy
Shelburne, VT-based Vermont Teddy Bear Co. (Nasdaq: BEAR) reported a 22% increase in net revenue for the quarter, to $6.1 million for the three months ended Sept. 30 from $5.0 million last year. The company’s Calyx & Corolla fresh-flowers business, which posted a $1.5 million rise in sales, more than made up for a $58,000 decline in corporate/wholesale revenue. Sales from the gift marketer’s PajamaGram and TastyGram segments rose by $31,000 and $11,000. Bear-Gram sales fell by $260,000 for the quarter, accompanies by a $321,000 decline in marketing and selling expenses.

The net loss for the quarter was $173,000, compared with a net loss of $183,000 last year.

Fewer Rounds Played Hurts Golfsmith
Austin, TX-based cataloger/retailer Golfsmith International Holdings increased its third-quarter net revenue 4%, to $73.9 million for the three months ended Oct. 2. But same-store sales fell nearly 8%, and net income was cut nearly in half, to $535,000 from $1.0 million a year ago. According to the company, the quarter was the first this year in which the number of rounds of golf played decreased from the previous quarter.

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