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Staples profit drops 33% in first quarter

OFFICE products retailer Staples Inc said yesterday that its profit fell 33 percent in the first quarter as higher operating expenses and one-time costs more than outweighed the benefit of a newly purchased supply chain business.

The world's largest office supply chain said it earned US$143 million, or 20 US cents per share, down from US$212.3 million, or 30 US cents per share, in the same period last year.

The Framingham, Massachusetts-based company's profit in the latest quarter was 22 US cents per share excluding one-time integration and restructuring expenses related to the acquisition of office supply chain Corporate Express NV last summer.

Analysts polled by Thomson Reuters projected income of 21 US cents per share, on average.

Staples reported higher cost of goods and occupancy costs and a jump in amortization and selling, general and administrative expenses.

Sales, meanwhile, grew 19 percent to US$5.82 billion. Analysts had predicted revenue of US$5.85 billion.

In the company's North American retail division, same-store sales fell 8 percent. Same-store sales, or sales at stores open at least a year, is a key indicator of retail performance.

The retailer said the dip reflected a drop in average order size and weakness in "durable categories" like business machines and furniture.


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