Staples profit falls, but sees sales stabilizing
Written on September 4, 2008
Staples Inc (SPLS.O: Quote, Profile, Research, Stock Buzz), the world’s largest office products retailer, posted a 16 percent fall in quarterly profit as its small-business customers bought less furniture and office supplies, hurt by the weak U.S. economy.
But the company also said on Wednesday that sales appear to be somewhat stabilizing, though it is too early to say the U.S. economy is headed toward recovery. Staples shares rose 3.5 percent in morning trading.
“I don’t think it’s down from here,” Staples Chief Executive Ron Sargent said on a call with analysts. “I think if anything it’s up from here because I think the economy is up from here. But it’s a little early to be saying we’ve got a trend going here.”
The company said earnings declined to $150.2 million, or 21 cents a share, in the fiscal second quarter ended August 2, from $178.8 million, or 25 cents a share, a year earlier pay day loans.
The results were in line with Wall Street expectations after the company cut its full-year forecast last month.
Quarterly sales rose 18 percent to $5.07 billion, helped by the acquisition of Dutch peer Corporate Express.
Sales at North American retail stores fell 1 percent, while sales at stores open at least a year fell 7 percent in both North America and Europe as stores experienced less traffic.
Weak sales of furniture, desktop computers, printers and digital cameras were somewhat offset by strength in laptops, ink and technology services.
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