Staples, Inc. (SPLS), the global leader in the supply of office products, recently reported better-than-expected first quarter results but provided a moderate outlook.
 
Quarterly earnings of 28 cents a share rose 27.3% from 22 cents posted in the prior-year quarter, and surpassed the Zacks Consensus Estimate by a penny. Management now expects second-quarter earnings in the range of 18 cents to 20 cents and fiscal 2010 earnings between $1.25 and $1.33 per share.
 
On a reported basis, including one-time items, earnings came in at 26 cents a share, up 30% from 20 cents delivered in the year-ago quarter. On a reported basis, earnings per share for the second-quarter is expected between 16 cents and 18 cents, and for fiscal 2010 between $1.20 and $1.28.
 
Total sales were $6,057.8 million, up 4.1% from the prior-year quarter, boosted by Staples’ improving North American Retail and International operations. The office products retailer, which expects a modest recovery in 2010, forecasts sales to rise in the low-single digit in the second quarter and fiscal year 2010.
 
North American retail sales grew 5.7% year over year to $2,312.2 million and 1.6% in local currency. Comparable-store sales rose marginally by 1% versus the prior-year quarter due to traffic improvement, partly offset by lower order size.
 
International sales climbed 6% to $1,282.9 million but fell 4.4% in local currency. North American delivery sales climbed 1.8% to $2,462.7 million and rose 0.4% in local currency.
 
Staples generated free cash flow of $144 million during the quarter, whereas capital expenditures were $49 million. The company ended the quarter with cash and cash equivalents of $1,533.4 million, and long-term debt of $2,029.5 million, representing a debt-to-capitalization ratio of 22.8%.
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