Staples earnings fall 38% in second quarter

FRAMINGHAM, Mass. – Staples Inc., the world’s largest retailer of office supplies, said second-quarter earnings fell 38 percent as companies bought fewer desks and chairs and profit margin narrowed, Bloomberg News reported last week.
Net income dropped to $92.4 million, or 13 cents a share, from $150.2 million, or 21 cents, a year earlier, Staples said in a statement. Sales rose 9 percent to $5.53 billion in the 13 weeks ended Aug. 1, helped by the 2008 acquisition of Corporate Express NV.
As companies cut jobs and equipment purchases in the worst U.S. economy since the Great Depression, Staples is adding more-profitable technical services such as computer repair. Gross margin, the fraction of sales remaining after subtracting the cost of goods sold, shrank to 25.7 percent from 26.6 percent.
“The only number that’s going to give anyone any concern is the gross margin,” Scott Tilghman, an analyst at New York- based Hudson Square Research Inc., said in a telephone interview. Tilghman estimated a gross margin of 26.2 percent.
Excluding integration and restructuring expenses, profit totaled 16 cents a share, in line with the average of 15 analysts’ estimates compiled by Bloomberg. &#8226