Staples Results Hurt by Tough Conditions

Framingham, Mass. Staples Inc. said on Tuesday that tough market conditions hurt quarterly results and that its acquisition of Dutch rival Corporate Express would add slightly to 2008 earnings.

Sales in its fiscal second quarter, which ended Aug. 2, rose 3%.

Retail sales in North America fell about 1%, while same-store sales dropped 7%, Staples said, calling its results, excluding Corporate Express, "weaker than anticipated."

The weakness extended to its European market, where Staples said same-store sales fell 7%, hurt by weak customer traffic and size of orders.

Staples said it expects the acquisition to add slightly to full-year earnings and that it expects incremental interest expense of more than $100 million in the "back half" of 2008.

It also forecast integration and restructuring costs of $30 million to $40 million in the back half of 2008 and $50 million to $70 million in 2009.

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