Despite softer-than-expected sales growth in North Americanretail, during a conference call Ron Sargent, chairman and CEO,said, "North American retail gained market share in many categoriesand delivered solid operating profit margins." The softening, hesaid, "suggests that consumer and very small business customers arefeeling pressure. Yet, our delivery business is showing no signs ofdeceleration."

Company-wide net income for the quarter was $209 million. Totalcompany sales were $4.6 billion.

During first quarter, it opened 24 new stores in the US, oneeach in Germany, Portugal and Belgium, and 17 in China, includingthose in its recent acquisition of Pei Pei. Plans call for 100additional stores in North America this year. Denver is a newtarget market, and more units are scheduled for Chicago and SouthFlorida, markets the company entered in 2005 and 2006,respectively. In all, there are now 1,927 Staples unitsworldwide.