Staples’ Profit Declines 38 Percent
August 25, 2009 by Mark Ellis
Filed under Business
Office supply retailer Staples had a rough second quarter, posting a quarterly profit decline of 38 percent. According to Staples, the earnings decline comes due to less people buying desks and chairs, as well as due to a narrower profit margin. However, despite Staples’ falling profits, sales have actually increased from last year to this year.
Net income fell to $92.4 million from $150.2 million just a year earlier, or to 13 cents a share from 21 cents a share. Sales experienced movement in the opposite direction, rising 9 percent to $5.53 billion from $5.1 billion in the same quarter last year. Staples has largely credited the revenue increase with its 2008 acquisition of Corporate Express.
In addition to its office supply retailers, Staples has also started to make inroads into providing technical services, such as repairing computers. These endeavors end up being more profitable than standard retail. Gross margin shrank 0.9 percent, from 26.6 percent to 25.7 percent.
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