Office supplies retailer Staples, Inc. (SPLS) reported Wednesday a decline in first-quarter profit citing lower sales internationally and severance costs associated with layoffs.
The company reiterated its full-year forecast, assuming continued slow growth in the U.S. economy and a soft demand environment in Europe.
Net income for the first quarter declined to $187 million or $0.27 per share from $198 million or $0.28 per share in the prior-year quarter.
Headcount reductions in North America, Europe and Australia and acquisition-related costs impacted the results to the tune of $0.03 per share.
On average, 18 analysts polled by Thomson Reuters expected earnings per share of $0.30 for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter decreased 1 percent to $6.1 billion, missing analysts' estimate of $6.19 billion by a whisker. Revenues were flat in local currencies.
Internationally, sales dropped 8 percent in U.S. dollars and 5 percent in local currencies, reflecting weak sales in Australia and Europe.
In North American Delivery segment, sales increased 2 percent from last year. North American Retail segment sales were flat compared to the first quarter of 2011.
Ron Sargent, chairman and chief executive officer of the company said, "In North America we continue to build momentum in categories beyond office supplies while trends in our international business remain soft."
Looking ahead, Sargent said "Our plans remain on track to grow both sales and earnings during 2012."
Including the impact of the 53rd week in fiscal 2012, the company continues to expect full-year sales to increase in the low single-digits and earnings per share to increase in high single-digits, compared to the adjusted earnings per share of $1.37 achieved in 2011. Analysts are looking for earnings of $1.49 per share for the fiscal ending January 2013.
During the first quarter, the company opened three and closed six stores in the U.S. and opened one and closed one store in Canada, ending the quarter with 1,914 stores in North America.
SPLS closed Tuesday's regular trading at $14.75 on the Nasdaq.
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