Staples Q1 suffers on flat U.S. sales

FRAMINGHAM, Mass. — First it was OfficeMax, now Staples reported sales and earnings that were reflective of a struggling retail sector. The company reported that total sales for the first quarter of 2012 were $6.1 billion, a decrease of 1% 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% year-over-year to $187 million. Diluted earnings per share, on a GAAP basis, decreased 4% t to 27 cents from 28 cents achieved in the first quarter of 2011.

“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 chief executive officer. “Our plans remain on track to grow both sales and earnings during 2012.”

Sales at the company's North American retail division were $2.3 billion and essentially flat compared with the first quarter of 2011. Comparable-store sales for the first quarter of 2012 were flat, as average order size and customer traffic were unchanged versus the prior year.

Sales at Staples' North American delivery business were $2.6 billion, an increase of 2% compared with the prior-year period. This primarily reflects double-digit sales growth in facilities and breakroom supplies and strong growth in copy and print and promotional products.

Sales in international operations for the first quarter were $1.2 billion, a decrease of 8% in U.S. dollars and a decrease of 5% on a local currency basis compared with the first quarter of 2011. These results reflect weak sales in Australia and Europe, including a 6% decline in comparable-store sales in Europe.

Staples is maintaining its 2012 outlook for full-year sales to increase in the low single-digits compared with the prior year and full year diluted earnings per share to increase in the high single-digits versus adjusted diluted earnings per share of $1.37 achieved in 2011.