Financial Reports: Staples, Penney, School Specialty, and More

3Q Income, Sales Up at Staples
Framingham, MA-based office products conglomerate Staples (Nasdaq: SPLS) posted an 11% jump in third-quarter revenue and a 14% rise in net income. For the three months ended Oct. 29, the cataloger/retailer had netted $238 million on sales of $3.83 billion.

North American retail sales increased 9%, to $2.45 billion. Within the North American delivery unit, which includes the Quill, Medical Arts Press, and Smilemakers catalogs, revenue climbed 18%, to $1.29 billion. International business rose 4%, but declined 2% excluding benefits from acquisitions and the negative impact of foreign currency exchange.

Total company operating income increased 16 basis points to 9% of sales, with the North American retail and delivery units achieving record third-quarter performance with operating income rising to 10% of sales.

Penney Direct Sales Down 1% but Operating Profit Surges
Though third-quarter catalog/Internet sales at Plano, TX-based marketer J.C. Penney Co. (NYSE: JCP) slid 1%, operating profit for the division increased 17%, to $401 million for the three months ended Oct. 29. Company net sales for the quarter rose 2%, to $4.47 billion from $4.39 billion last year. Online sales jumped more than 25%, and comparable store sales increased 3%.

School Specialty Income Down 33%
A $5.2 million charge related to the failed merger with Bain Capital (“Backers Back Out of School Specialty Deal”) and other restructuring costs took their toll on School Specialty for the quarter.

The b-to-b educational suppliers, whose titles include Childcraft, Sax Arts and Crafts, and Sportime, reported a 33% year-over-year decline in quarterly net income, to $20.6 million for the three months ended Oct. 29.

In addition to the Bain Capital charge, the company took a $4.3 million charge related to the integration of its Aug. 31 acquisition of Delta Education and the closure of a distribution center, $4.3 million in costs related to starting up another distribution center, and a $700,000 investment in an awards program and a teacher symposium.

Revenue slid 5%, to $344.4 million from $361.5 million a year ago.

Aramark Direct Sales Down 3% for the Year
The direct marketing segment for the uniform and career apparel division of Philadelphia-based Aramark (NYSE: RMK) reported a 3% decline in annual revenue, to $428 million for the fiscal year ended Sept. 30. Operating income tumbled from $20.1 million to $11.2 million. Aramark owns the Galls, WearGuard, and Aramark workwear and public-safety gear titles.

Corporate net income for the year rose 8%, to $91.6 million. Sales increased 6%, to $2.78 billion, driven by international food and support services businesses.

3Q Earnings Fall at Talbots

Third-quarter net income for Hingham, MA-based The Talbots (NYSE: TLB) fell 26%, to $20.0 million for the three months ended Oct, 29. Last year’s third-quarter income of $27.2 million had included a $4.5 million tax benefit, however.

Direct marketing sales for the quarter increased 11%, to $63.7 million. The apparel cataloger/retailers’s total sales for the quarter rose 3%, to $426.3 million. Retail store sales increased 2%, to $362.6 million, but comparable store sales declined 2%.