Staples profit and sales rise

Staples Inc. today said its third-quarter profit rose 29 percent as the nation's largest office products retailer reported strong back-to-school sales, increased customer traffic and a higher average order size.

Framingham-based Staples reported net income of $289.9 million, or 39 cents a share, in the August-October period compared with a profit of $224.5 million, or 30 cents per share, in the same period a year ago.

Sales grew 12 percent last quarter to $4.76 billion compared with $4.25 billion a year ago.

The most recent quarter's performance was boosted by a lower tax rate due to favorable resolution of tax matters. But the impact of the lower rate was partly offset by a $10.8 million charge for an accounting correction for prior year's stock-based compensation.

Not counting those items, Staples' profit in the most recent quarter was $265 million, or 36 cents per share.

North American sales at stores open for at least a year rose 4 percent compared with a year ago, and Staples' North American delivery business grew 16 percent. International sales rose 10 percent in local currency and 15 percent measured by U.S. dollars.

Regarding the accounting correction to previous years' stock-based compensation expenses, Staples said a review by its audit committee led the company to record a $10.8 million expense in this year's third quarter to account for errors due to incorrect measurement dates for options granted in previous years. The company is not restating any previous financial statements.

"The company has concluded that the use of incorrect measurement dates was not the result of intentional wrongdoing, and has taken steps to improve the controls over its option granting processes," Staples said. (AP)