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Staples Sales, Earnings Slip During Q1

Framingham, Mass. – Staples reported lower sales and profits in the first quarter due to 16 store closures and unfavorable currency exchange rates.

Net income fell 44 percent to $96 million on a GAAP basis for the three months, ended May 3, and net sales slipped 3 percent to $5.7 billion.

In North America, net sales slid 4.9 percent to $2.6 billion, comps decreased 4 percent, and online sales grew 6 percent. Operating income fell 46 percent to $93 million for the quarter.

Sales growth was negatively impacted 2 percent by currency fluctuations and 1 percent by the 16 store closures, the company said, along with declines in computer and tech accessory sales.

Comps were affected by a 4 percent decline in traffic and flat average order size, while online growth reflects higher conversion rates on its e- and m-commerce sites.

“Despite a slow start to the first quarter, our results were in line with our expectations and we expect to build momentum throughout 2014,” chairman/CEO Ron Sargent said.

During the quarter, the No. 1 office-supply chain remerchandised 600 stores to present an expanded assortment of maintenance, break-room, and other commercial products and supplies, which it is touting through a “Make More Happen” brand campaign. The company is also streamlining its store labor model and reducing retail store expenses, it said.

The company plans to close another 80 stores this quarter and a total of 225 in North America by the end of 2015.

“We’re making progress meeting the changing needs of our customers as we reinvent Staples,” Sargent said.