Staples Reports Flat Sales, Lower Income

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Framingham, Mass. - Staples reported relatively flat sales and slightly lower net income in its fiscal first quarter, ended April 28.

Total company sales for the first quarter of 2012 were $6.1 billion, a decrease of 1 percent in U.S. dollars and flat on a local currency basis compared with the first quarter of 2011.

Net income for the first quarter of 2012 decreased 6 percent year over year to $187 million.

During the first quarter of 2012, the company recorded $28 million of pretax expenses primarily related to headcount reductions in North America, Europe and Australia, as well as the settlement of a contractual dispute associated with the acquisition of Corporate Express.

"In North America we continue to build momentum in categories beyond office supplies while trends in our international business remain soft," said Ron Sargent, Staples' chairman and CEO. "Our plans remain on track to grow both sales and earnings during 2012."

In its North American retail segment, sales of $2.3 billion were essentially flat compared with the first quarter of 2011, Staples reported. Com-store sales for the first quarter of 2012 were flat, as average order size and customer traffic were unchanged vs. the prior year, the chain said.

Operating income rate decreased 43 basis points to 7.18 percent compared with the first quarter of 2011. This decrease primarily reflects a pretax expense of $4 million related to headcount reductions and the settlement of a contractual dispute associated with the acquisition of Corporate Express. The decline also reflects ongoing investments to drive growth in categories beyond office supplies, partially offset by reduced marketing and depreciation expense.

During the first quarter, the company opened three stores and closed six in the U.S., and opened one store and closed one in Canada, ending the first quarter of 2012 with 1,914 stores in North America.

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