By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The North American store business at office supply retailer Staples increased 7 percent in the company's fiscal first quarter, reaching $1.8 billion, up from $1.7 billion. North American retail comp-store sales edged up 2 percent.
Calling its reporting period "another strong quarter," Staples North American retail business unit income climbed to $75.7 million in the first three months, ended May 3, up 28 percent when compared with the $59.2 million recorded in the year-ago period.
Staples added 10 new North American stores during the first quarter, with nine in the United States and one in Canada.
Total company sales in the first three months jumped 15 percent, to $3.1 billion, up from $2.7 billion in the year-ago period. However, consolidated net income plunged to $24.8 million in the first quarter, down from $93.9 million year-on-year.
Due to a change in accounting rules for recording vendor consideration, Staples recorded a one-time, non-cash adjustment, reducing first quarter net income by $62 million after taxes. Pro forma net income for the period was $86.5 million.
Looking to its second quarter, Staples expects revenue to increase in the low double-digit percentage range, with North American retail comp-store sales in the low single digits.
For the year, the retailer anticipates overall sales growth in the range of mid to high single-digit organic growth and 2 percent to 3 percent growth from two recent acquisitions.
Low single-digit positive North American retail store comps are expected for the 12 months.
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