Staples, BJ’s temper optimism as malaise lingers

Staples Inc., the Framingham-based office supplies chain, yesterday reported a 40 percent increase in second-quarter profit due to belt-tightening, but sales were flat compared with the same quarter last year. And BJ’s Wholesale Club Inc., based in Natick, earlier this week reported a 2 percent increase in second-quarter profit, but downgraded its earning projections by about 6 percent.

Since Staples customers are both consumers and businesses, and BJ’s sells consumer basics through its wholesale warehouse clubs, analysts consider both companies to be bellwethers for the economy — and both expect slow sales growth for the rest of the year.

“The economy will grow — it’s just going to grow at a very slow, measured rate for some time,’’ said Madison Riley, a senior partner at Kurt Salmon Associates, a New York retail consulting firm. “The consumer has pulled way back on his overall spending.’’

Staples, in particular, has been a barometer of sorts for the country’s economic health.

In 2008, the company’s sales declines and cost-cutting measures turned out to be a precursor of the re cession. Then, earlier this year, increased deliveries, and sales of pens, all-in-one printers, and tech services indicated that the economy was rebounding. And this week, Ron Sargent, the chief executive officer, said that despite the “challenging’’ environment, business is slowly improving even as the economy remains uncertain and the unemployment rate remains high.

“We need jobs to grow,’’ John J. Mahoney, Staples vice chairman and chief financial officer, said in an interview yesterday. “The more people that are working, the more people that will use office supplies.’’

Mahoney said he expects only low single-digit sales growth for the rest of the year and continuing into 2011.

“It’s going to take companies bumping up against their capacity before they’re going to start adding people, and then they’re going to do it cautiously,’’ he said.

Since the recession began, Staples has cut costs by laying off some workers, closing some facilities, and using cheaper advertising, among other measures.

Because of the cost savings, the retailer reported net income for the second quarter rose to $129.8 million, or 18 cents per share.

Revenue, meanwhile, was nearly flat at $5.53 billion, and rose 2 percent to $2 billion at North American retail stores. Same-store sales were flat.

BJ’s, meanwhile, reported this week that second-quarter net income rose 2 percent to $35.8 million, or 67 cents per share. Revenue rose 8.6 percent to $2.72 billion. Sales of merchandise at stores open at least year rose 2.9 percent compared with the same quarter last year, while member traffic rose 4 percent.

Consumers are more likely to turn to wholesalers for like BJ’s in search of discounts on basic items such as groceries when the ecomomy sours.

Even so, BJ’s lowered its earnings and revenue targets for the year. It now expects earnings of $2.40 to $2.50 per share, from prior guidance of $2.58 to $2.68 per share.

It also expects an 8 percent to 10 percent increase in revenue, down from earlier estimates of 9.2 percent to 11.2 percent.

“For the second half of this year, we expect that the economy and consumer spending will remain weak,’’ said Frank Forward, BJ’s chief financial officer, on an earnings call Wednesday.

Mike Tesler, partner at Retail Concepts in Norwell, said Staples and BJ’s earnings reports illustrate the uncertain economy.

“You’re not going to have the sexy glittering numbers in the year 2010 that people had in 2005,’’ he said. “It might be the new sexy to be flat.’’

Bonnie Kavoussi can be reached at bkavoussi@globe.com.