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TheStreet Open House

Staples Profit Falls 33 Percent In 1st Quarter

ASHLEY M. HEHER

CHICAGO (AP) ¿ Recession-weary customers are still putting off big-ticket purchases from office-supply chain Staples Inc., but the retailer said it's beginning to see smaller declines in foot traffic and sales to small businesses.

The chain's tepid first-quarter results, released Wednesday, show the limping U.S. economy may finally be digging itself out of its slump by the end of the year, executives said Wednesday.

"I think the economy still looks pretty choppy out there," Chairman and Chief Executive Ron Sargent told investors during a conference call. "But I do believe that we're kind of slowly heading toward recovery mode."

Among the signs of progress during the quarter:

¿ Sales through Staples Business Delivery and Quill, which targets companies with less than 100 employees, posted low double-digit sales declines, an improvement from the fourth quarter. Staples President and Chief Operating Officer Mike Miles said that was a sign "confirming the sense we're getting at retail that the small-business segment has stabilized."

¿ Same-store sales in the U.S. ¿ a key retail industry metric of sales in stores open at least a year¿ fell 8 percent, better than the fourth quarter's 13 percent decrease. And comparable-store customer counts fell 2 percent, better than the mid-single digit declines posted at the end of the 2009 fiscal year.

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