STAPLES Inc, the world's largest office-supplies retailer, said yesterday that second-quarter profit fell 16 percent as small companies reined in spending.

Net income declined to US$150.2 million, or 21 US cents a share, matching the average estimate of analysts surveyed by Bloomberg News. The company also reiterated its profit forecast for the rest of the year.

Sales at United States and Canadian stores open at least a year have dropped for five quarters, while orders from companies slowed as businesses pared purchases of computers and office furniture. Smaller chains Office Depot Inc and OfficeMax Inc posted revenue declines in the past year as rising unemployment and gasoline prices limited corporate spending.

"It's nothing Staples is doing wrong operationally," Walter Todd, a principal at Greenwood Capital Associates LLC, said yesterday. "They are feeling the economic slowdown that affected their competitors earlier." Revenue in the three months through August 2, including sales from the July purchase of Corporate Express NV, rose to US$5.07 billion, Staples said.

Staples reiterated its forecast that profit excluding the acquisition of Corporate Express would be little changed this year from 2007. Sales would increase on a "low single-digit" percentage basis for the year through January 31, it said.

Staples rose 57 cents, or 2.4 percent, to US$24.77 Tuesday in Nasdaq Stock Market composite trading. The stock has gained 7.4 percent this year.