Office supply giant, Staples , announced this morning that its third-quarter profit dropped 5.3%. The results were hit by costs used to settle a class action lawsuit. The retailer's net income dropped to $274.5 million, 38 cents per share, from $289.9 million, 39 cents per share, compared to a year ago. Sales for the quarter managed to increase 8.7% to $5.17 billion. The aforementioned charge totaled $24 million and was related to the settlement of a California wage and hour class-action lawsuit, without this charge earnings would have been 42 cents per share. On an ex-item basis, expectations called for earnings of 40 cents per share on earnings of $5.19 billion.
SPLS noted that the near term should remain challenging, even though the company is benefiting from the weak dollar, strength in Canada, and a gaining market share domestically and overseas. North American retail sales increased 3%, although same-store sales in the region dropped 3% thanks to lower demand for business machines, furniture, and computers. Delivery sales in North America increased 15%.