Despite US economic signals pointing to a slowdown, wholesaler United Stationers remains confident about its prospects for the rest of the year.

In a webcast earlier this month, CEO Dick Gochnauer said that the company's Earnings Per Share growth target of 15% was still a realistic target.

Despite a modest growth in topline sales in the second quarter Gochnauer pointed to a number of factors that are improving margins and underlying performance.

Jan/San category doing well

He pointed to the success of US independent dealers (who account for over 80% of United's business) in taking advantage of opportunities for growth in different product segments, notably in Janitorial and Breakroom Supplies. This product segment remains the fastest growing for United, and now represents over 20% of total sales. Second quarter sales were up by 9% versus the same quarter last year.

Private label

Another key driver was the continued increase in higher margin private label products, which increased in sales volume by 17% in the second quarter versus the same quarter in 2006. Private label furniture sales increased by 40% with the introduction of a new product range and a focus on next day delivery service. Overall, private label now accounts for just over 12% of total sales.

Improving margins in technolgy segment

The biggest product category remains Technology, accounting for 38% of revenues in the second quarter, down by 2½% on the second quarter 2006. However, the company pointed out that it had made decisions to withdraw from some low margin hardware business, reducing sales but leading to better margins overall.