Last month, smaller rivals Office Depot Inc
Some analysts have wondered why recent improvements in the U.S. economy have not trickled down to a sector traditionally seen as a barometer of economic health.
Staples, the largest U.S. office supply retailer, said its net profit rose to $198.2 million, or 28 cents a share, in the first quarter ended on April 30 from $188.8 million, or 26 cents a share, a year earlier.
Analysts on average were expecting a profit of 32 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 2 percent to $6.17 billion, missing the analysts' average estimate of $6.20 billion.
We are gaining share in North America, but at a cost to our bottom line, Staples Chief Executive Officer Ron Sargent said.
Some analysts say the office supply sector is becoming less relevant, with businesses and shoppers buying these products from online retailers such as Amazon.com Inc
Nomura analyst Aram Rubinson downgraded Staples earlier this month, despite his belief that the chain is run by some of the best retail executives around.
Though we think Staples is a far better operator, we believe that the issues facing Office Depot and OfficeMax are not expressly cyclical or company-specific, Rubinson said at the time. Rather, the office sector is fighting a secular battle for relevance.
Shares of Staples were down 8.2 percent at $18.03 in trading before the market opened.
(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)