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Staples 2Q in line
August 21, 2001: 7:01 a.m. ET

No. 2 office supply chain's sales flat; comfortable with full-year outlook
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NEW YORK (CNNfn) - Staples Inc. posted lower fiscal second-quarter results Tuesday that matched Wall Street expectations as the nation's No. 2 office supply retailer's sales remained flat amid a slowing economy.

For the quarter ended Aug. 4, Framingham, Mass.-based Staples (SPLS: down $0.65 to $15.57, Research, Estimates)  reported net income of $40.35 million, or 9 cents a share, down from $42.56 million, or 10 cents a share, a year earlier. Analysts on average anticipated a profit of 9 cents a share, according to earnings tracker First Call.

Sales were essentially flat at $2.3 billion.

Staples shares fell 62 cents to $15.60 in midday trading Tuesday.

The company also said it remains comfortable with Wall Street's estimates for full-year earnings of 65 cents to 70 cents a share. The average analyst forecast is for 67 cents a share, according to First Call.

Retail sales at stores open at least a year -- a key retailing gauge known as same-store sales -- slipped 3 percent in the quarter.

"In the face of a difficult economic environment, Staples aggressively contained expenses and increased productivity during the quarter without sacrificing marketing or customer service levels," CEO Thomas Stemberg said.

The company said, its e-commerce arm, became profitable for the first time in the second quarter, 18 months ahead of management's projections, with net income of $5 million.

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That news comes about four months after Staples angered some investors when it canceled plans for a tracking stock of and  folded the Web site back into the parent, yielding Stemberg and several other top managers large personal profits.

However, the company quelled criticism by telling investors that its board of directors would not reap a windfall profit from the move. graphic


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