
<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q



Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act 
of 1934

For the quarterly period ended:  August 3, 1996
                               -------------------------------------------------

Commission File Number:           0-17586
                       ---------------------------------------------------------


                                  STAPLES, INC.
             (Exact name of registrant as specified in its charter)


           Delaware                                               04-2896127
- -------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


                    One Research Drive, Westborough, MA 01581
                    -----------------------------------------
              (Address of principal executive office and zip code)


                                  508-370-8500
                  -----------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                Yes   X   No
                                    -----    ------

The registrant had 160,772,891 shares of Common Stock, par value $.0006,
outstanding as of August 31, 1996.



<PAGE>   2

                                    FORM 10-Q

                                  STAPLES, INC.

                                 AUGUST 3, 1996

<TABLE>

                                TABLE OF CONTENTS
<CAPTION>
                                                                     Page
                                                                     ----
<S>                                                                 <C>

Consolidated Balance Sheets ......................................     3

Consolidated Statements of Income ................................     4

Consolidated Statements of Cash Flows ............................     5

Notes to Consolidated Financial Statements .......................     6

Management's Discussion and Analysis of Financial
       Condition and Results of Operations .......................   7-11

Part II ..........................................................  12-13

Signature ........................................................    14


</TABLE>

                                     Page 2

<PAGE>   3

                         
                        STAPLES, INC AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
               (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                                 August 3,       
                                                                   1996       February 3,
                                                                (Unaudited)      1996
                                                                -----------   -----------
<S>                                                             <C>            <C>
ASSETS
CURRENT ASSETS:
      Cash and cash equivalents .............................      $45,190        $98,130
      Short-term investments ................................        2,540         12,685          
      Merchandise inventories ...............................      764,364        644,514
      Receivables, net ......................................      191,102        122,453
      Prepaid expenses and other current assets .............       65,901         48,089
                                                                ----------     ----------
           TOTAL CURRENT ASSETS .............................    1,069,097        925,871

PROPERTY AND EQUIPMENT:
      Land and buildings ....................................       32,695         24,364
      Leasehold improvements ................................      210,970        168,588
      Equipment .............................................      171,749        144,857
      Furniture and fixtures ................................       92,237         75,182
                                                                ----------     ----------
           TOTAL PROPERTY AND EQUIPMENT .....................      507,651        412,991
      Less accumulated depreciation and amortization ........      151,846        120,496
                                                                ----------     ----------
           NET PROPERTY AND EQUIPMENT .......................      355,805        292,495

OTHER ASSETS:
      Lease acquisition costs, net of amortization ..........       42,648         40,338            
      Investment in affiliates ..............................       37,530         32,940
      Goodwill, net of amortization .........................       82,118         80,361
      Other .................................................       38,138         30,770
                                                                ----------     ----------
           TOTAL OTHER ASSETS ...............................      200,434        184,409
                                                                ----------     ----------
                                                                $1,625,336     $1,402,775
                                                                ==========     ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
      Accounts payable ......................................     $388,324       $273,633
      Accrued expenses and other current liabilities ........      132,742        139,641
      Debt maturing within one year .........................        7,414          8,267
                                                                ----------     ----------
           TOTAL CURRENT LIABILITIES ........................      528,480        421,541

LONG-TERM DEBT ..............................................      113,521         43,647
OTHER LONG-TERM OBLIGATIONS .................................       31,556         26,171
CONVERTIBLE DEBENTURES ......................................      300,000        300,000
STOCKHOLDERS' EQUITY:
      Preferred stock, $ 01 par value-authorized
      5,000,000 shares; no shares issued ....................            0              0
      Common stock, $ 0006 par value-authorized
      500,000,000 shares; issued
      160,485,634 shares at August 3, 1996 and
      158,366,604 shares at February 3, 1996 ................           96             95
      Additional paid-in capital ............................      479,233        466,684
      Cumulative foreign currency translation adjustments ...       (1,607)        (2,054)
      Unrealized gain on short-term investments .............           22             32
      Retained earnings .....................................      174,381        147,005
      Less: 37,398 shares of treasury stock, at cost ........         (346)          (346)        
                                                                ----------     ----------
               TOTAL STOCKHOLDERS' EQUITY ...................      651,779        611,416
                                                                ----------     ----------
                                                                $1,625,336     $1,402,775
                                                                ==========     ==========
</TABLE>
See notes to consolidated financial statements.

                                    Page 3


<PAGE>   4

                         
                       STAPLES, INC   AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                                      (Unaudited)                       (Unaudited)
                                                                    13 Weeks Ended                     26 Weeks Ended
                                                               ---------------------------       ---------------------------
                                                                August 3,        July 29,         August 3,        July 29,
                                                                  1996            1995              1996            1995
                                                               -----------     -----------       -----------     -----------
<S>                                                            <C>             <C>               <C>             <C>
Sales .................................................           $808,056        $604,975        $1,724,856      $1,273,770
Cost of goods sold and occupancy costs ................            616,985         465,501         1,325,212         983,914
                                                               -----------     -----------       -----------     -----------
    GROSS PROFIT ......................................            191,071         139,474           399,644         289,856
                                                                                                              
Operating expenses:                                                                                           
  Operating and selling ...............................            125,401          92,889           272,098         199,006
  Pre-opening .........................................              3,302           1,094             5,090           2,056
  General and administrative ..........................             28,851          23,198            59,480          46,479
  Amortization of goodwill ............................                576             472             1,136             844
                                                               -----------     -----------       -----------     -----------
    TOTAL OPERATING EXPENSES ..........................            158,130         117,653           337,804         248,385
                                                               -----------     -----------       -----------     -----------
                                                                                                              
    OPERATING INCOME ..................................             32,941          21,821            61,840          41,471
                                                                                                              
  Interest and other expense, net .....................             (5,165)         (4,689)           (9,193)         (8,675)
                                                               -----------     -----------       -----------     -----------
                                                                                                              
    INCOME BEFORE EQUITY IN LOSS OF                                                                           
      AFFILIATES AND INCOME TAXES .....................             27,776          17,132            52,647          32,796
 Equity in loss of affiliates .........................             (4,028)         (2,572)           (7,742)         (5,324)
                                                               -----------     -----------       -----------     -----------
                                                                                                              
   INCOME BEFORE INCOME TAXES .........................             23,748          14,560            44,905          27,472
Income tax expense ....................................              9,143           5,541            17,288          10,576
                                                               -----------     -----------       -----------     -----------
   NET INCOME .........................................            $14,605          $9,019           $27,617         $16,896
                                                               ===========     ===========       ===========     ===========
                                                                                                              
                                                                                                              
Net income per common share ...........................              $0.09           $0.06             $0.17           $0.11
                                                               ===========     ===========       ===========     ===========
                                                                                                              
Number of shares used in computing net                                                                        
     income per common share ..........................        166,407,289     152,040,668       165,922,915     149,639,963
                                                               ===========     ===========       ===========     ===========
</TABLE>
  
See notes to consolidated financial statements 

                                     Page 4

<PAGE>   5

                          
                        STAPLES, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                    (Unaudited)
                                                                                   26 Weeks Ended
                                                                               -----------------------
                                                                               August 3,       July 29,
                                                                                 1996             1995
- ------------------------------------------------------------------------------------------------------
<S>                                                                            <C>             <C>
OPERATING ACTIVITIES:                                                                      
    Net income ..........................................................      $27,617         $16,896      
    Adjustments to reconcile net income to net cash                                        
       used in operating activities:
       Depreciation and amortization ....................................       34,093          24,521                     
       Equity in loss of affiliates .....................................        7,742           5,324
       Increase in assets:                                                                 
          Merchandise inventories .......................................     (119,763)       (105,542)            
          Receivables ...................................................      (68,637)        (33,179)    
          Deferred tax assets ...........................................      (19,712)         (6,499)    
          Prepaid expenses and other assets .............................       (8,359)         (2,997)                  
       Increase in accounts payable, accrued                                               
          expenses and other current liabilities ........................      107,648          26,771
       Increase in other long-term obligations ..........................        5,378           1,940          
                                                                               -------         -------
                                                                               (61,610)        (89,661)
                                                                               -------         -------
    NET CASH USED IN OPERATING ACTIVITIES ...............................      (33,993)        (72,765)
                                                                                           
INVESTING ACTIVITIES:                                                                      
    Acquisition of property and equipment ...............................      (94,599)        (49,680)       
    Proceeds from sales and maturities of short-term investments ........       10,144           8,135
    Purchase of short-term investments ..................................            0            (349)                   
    Investment in affiliates ............................................      (11,887)         (9,634)              
    Acquisition of lease rights .........................................       (3,922)           (805)    
    Other ...............................................................        1,578           2,657     
                                                                               -------         -------
    NET CASH USED IN INVESTING ACTIVITIES ...............................      (98,686)        (49,676)               
                                                                                           
FINANCING ACTIVITIES:                                                                      
    Proceeds from sale of capital stock .................................       10,726          19,193                      
    Proceeds from borrowings ............................................      112,496         972,500                 
    Payments on borrowings ..............................................      (43,480)       (881,222)                        
                                                                               -------         ------- 
    NET CASH PROVIDED BY FINANCING ACTIVITIES ...........................       79,742         110,471
                                                                                           
    Effect of exchange rate changes on cash .............................           (3)             82                  
                                                                                           
NET DECREASE IN CASH AND CASH EQUIVALENTS ...............................      (52,940)        (11,888)       
Cash and cash equivalents at beginning of period ........................       98,130          41,810
                                                                               -------         -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..............................      $45,190         $29,922            
                                                                               =======         =======
</TABLE>       
See notes to consolidated financial statements.

                                     Page 5

<PAGE>   6
                         STAPLES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1  -  Basis of Presentation
- --------------------------------

The accompanying interim unaudited consolidated financial statements include the
accounts of Staples, Inc. and its wholly owned subsidiaries (the "Company"). All
intercompany accounts and transactions are eliminated in consolidation.

These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such interim statements reflect all adjustments (consisting of
normal recurring accruals) necessary to present fairly the financial position
and the results of operations and cash flows for the interim periods presented.
The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year. These financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes included in the Company's Annual Report on Form 10-K dated April
11, 1996 for the year ended February 3, 1996.

Note 2 - Computation of Earnings Per Share
- ------------------------------------------

On March 5, 1996 the Board of Directors approved a three-for-two stock split of
the Company's common stock to be effected in the form of a 50% dividend. This
distribution was made on March 25, 1996 and was payable to shareholders of
record as of March 15, 1996. The number of shares used in the earnings per share
computation for the three and six months ended July 29, 1995, as previously
reported, has been retroactively adjusted to reflect the three-for-two split of
the Company's common stock in March, 1996.

Average common and common equivalent shares used in computing earnings per share
include approximately 6,554,000 and 4,955,000 shares for the quarters ended
August 3, 1996 and July 29, 1995, respectively, as a result of applying the
treasury stock method to outstanding stock options.

Note 3 - Subsequent Event
- -------------------------

On September 4, 1996, the Company entered into an Agreement and Plan of Merger
with Office Depot, Inc. ("Office Depot"). Office Depot operates over 500 retail
office supply stores in the US and Canada, a national delivery and contract
stationer business, and joint ventures or licensed operations in seven
countries, and had revenues of $5.3 billion for the year ended December 30,
1995. The transaction is intended to be a tax-free exchange of shares pursuant
to which the stockholders of Office Depot will receive 1.14 shares of the
Company's common stock for each outstanding share they own. The merger will be
accounted for as a pooling of interests and is subject to various closing
conditions, including the approval of the stockholders of both companies and
required regulatory approvals. In connection with the merger, the Company
granted to Office Depot, and Office Depot granted to the Company mutual options
to purchase up to 19.9% of the outstanding stock of the other company under
certain conditions.

                                     Page 6

<PAGE>   7
                         STAPLES, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
- ---------------------

SALES. Sales increased 34% to $808,056,000 in the quarter ended August 3, 1996
from $604,975,000 in the quarter ended July 29, 1995 and increased 35% to
$1,724,856,000 for the six months ended August 3, 1996 compared to
$1,273,770,000 for the six months ended July 29, 1995. This growth is
attributable to an increase in the number of open stores, increased sales in
existing stores and increased sales through both internal growth and
acquisitions in the delivery and contract stationer segments. In addition, the
three and six months ended August 3, 1996 includes the results of operations of
Macauley's Business Resources, Inc. ("Macauley's"), which was acquired under the
purchase method of accounting during the year ended February 3, 1996. Due to the
date of acquisition, only one month of Macauley's results of operations are
included in the consolidated results for the quarter ended July 29, 1995.
Comparable store and delivery hub sales (which represent a comparison of sales
between corresponding full months in the periods compared) for the quarter ended
August 3, 1996 increased 16% over the quarter ended July 29, 1995, and increased
17% for the six months ended August 3, 1996 versus the six months ended July 29,
1995. Comparable sales for the Company's contract stationer business segment
increased 18% for the quarter ended August 3, 1996 versus the quarter ended July
29, 1995 and increased 20% for the six months ended August 3, 1996 versus the
six months ended July 29, 1995. The Company had 511 stores open as of August 3,
1996 compared to 386 stores as of July 29,1995 and 443 stores open as of
February 3, 1996; this total includes 69 new stores opened and one store closed
during the six months ended August 3, 1996.

GROSS PROFIT. Gross profit as a percentage of sales was 23.6% and 23.2% for the
three and six months ended August 3, 1996 as compared to 23.1% and 22.8%
for the same periods in the prior year. The increase in gross profit rate for
the three and six months ended August 3, 1996 was primarily due to the
leveraging of fixed occupancy and distribution center costs over a larger sales
base, improved margins in the delivery business segment as well as lower product
costs from vendors as a result of increased purchase volume discounts. This was
partially offset by a decrease in merchandise margin rate in the retail segment,
as sales of computers and other capital goods items, which generate a lower
margin rate than other categories, increased as a percentage of total sales for
the three and six months ended August 3, 1996 versus the prior year. Total
computer sales constituted approximately 6% of total store and delivery hub
sales during the three months ended August 3, 1996 versus 5% of sales in the
same period of the prior year, and increased to 7% of total store and delivery
hub sales during the six months ended August 3, 1996 versus 6% in the prior year
period.

OPERATING AND SELLING EXPENSES. Operating and selling expenses, which consist of
payroll, advertising and other store operating costs, increased as a percentage
of sales in the three and six months ended August 3, 1996 to 15.5% and 15.8%,
respectively, as compared to 15.4% and 15.6% for the same periods in the prior
year. The increase is primarily due to increased advertising as well as
increased costs incurred for the Company's store remodel program in which
significant investments have been made in store layouts and signing to improve
shopability and enhance customer service. This increase was partially offset by
increased leveraging of fixed store payroll expenses and other fixed store
operating costs as store sales have increased.

                                     Page 7


<PAGE>   8

While most store expenses vary proportionately with sales, there is a fixed cost
component. Because new stores typically generate lower sales than the Company
average, the fixed cost component results in higher store operating and selling
expenses as a percentage of sales in these stores. During periods when new store
openings as a percentage of the base are higher, store operating and selling
expenses as a percentage of sales may increase. In addition, as the store base
matures, the fixed cost component of operating expenses is leveraged over an
increased level of sales, resulting in a decrease in store operating and selling
expenses as a percentage of sales. The Company's strategy of saturating markets
results in some new stores attracting sales away from existing stores. This also
has the effect of detracting from the expected leveraging of the fixed cost
component.

PRE-OPENING EXPENSES. Pre-opening expenses relating to new store openings, which
consist primarily of salaries, supplies, marketing and occupancy costs, are
expensed by the Company as incurred and, therefore, fluctuate from period to
period depending on the timing and number of new store openings. Pre-opening
expenses averaged $85,000 and $74,000 for the three and six months ended August
3, 1996, respectively, as compared to $53,000 and $52,000 per store for the same
periods in the prior year. The increase is due primarily to increased marketing
expenses as well as higher costs incurred in the initial shipment of product
from the distribution centers to new stores.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for the
three and six months ended August 3, 1996 decreased as a percentage of sales to
3.6% and 3.4%, respectively, as compared to 3.8% and 3.7% for the same periods
in the prior year. This decrease was primarily due to the Company's ability to
increase sales without proportionately increasing overhead expenses in its core
retail business. The acquisitions of contract stationers, which historically
operated with much higher overhead as a percentage of sales, has partially
offset this leveraging. The Company has continued to make significant
investments in its information systems staffing and infrastructure, which the
Company believes will reduce costs in future years, without increasing total
general and administrative expenses as a percentage of sales. The Company
expects general and administrative expenses to decrease as a percentage of sales
in the future, as these expenses are expected to increase more slowly than
revenues.

INTEREST AND OTHER EXPENSE, NET. Net interest and other expense for the three
and six months ended August 3, 1996 was $5,165,000 and $9,193,000 as compared to
$4,689,000 and $8,675,000 for the same periods in the prior year. The increase
in net interest expense is primarily due to increased borrowings which funded
the increase in store inventories related to new store openings, expanded
product assortments, and improvements in in-stock levels; the acquisition of
fixed assets for new stores opened and remodeled; and additional investments in
joint venture affiliates.

EQUITY IN LOSS OF AFFILIATES. The Company's equity in loss of affiliates
increased to $4,028,000 and $7,742,000 for the three and six months ended August
3, 1996 as compared to $2,572,000 and $5,324,000 for the same periods in the
prior year. The increase in the equity in loss of affiliates is primarily due to
the increased losses generated by Staples UK, the Company's joint venture in
England, as sales and profitability have been lower than projected. The
Company's joint ventures in Europe are at an early stage of development and
there can be no assurance that they will become profitable.


                                     Page 8

<PAGE>   9

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

During the six months ended August 3, 1996, cash and cash equivalents decreased
by $52,940,000. This decrease was attributable to cash used in investing
activities of $98,686,000, which includes capital expenditures of $94,599,000
primarily incurred in connection with the opening of 69 new stores, and cash
used in operating activities of $33,993,000, which primarily reflects increases
in merchandise inventories (related to new store openings, expanded product
assortments, improvements in in-stock levels, and the increased stocking to
prepare for the expected sales to be generated by the back to school season) and
increased accounts receivable. This was partially offset by cash flow from
financing activities of $79,742,000 which primarily represents borrowing under
the existing revolving credit and term loan facility.

The Company opened 39 and 69 stores in North America during the three and six
months ended August 3, 1996, and expects to open approximately 50 additional
stores in the last two quarters of fiscal 1996. Management estimates that the
Company's cash requirements, including pre-opening expenses, will be
approximately $1,400,000 for each new store (excluding the cost of any
acquisitions of lease rights). Accordingly, the Company expects to use in excess
of $70,000,000 for store openings during this period. In addition, the Company
will continue to make investments in information systems, distribution centers
and store remodels to improve operational efficiencies and customer service, and
may expend additional funds to acquire businesses or lease rights from tenants
occupying retail space that is suitable for a Staples store.

On July 10, 1996, the Company amended and restated its commitment on its
five-year revolving credit facility with a syndicate of banks, originally
established on May 25, 1994, from $225,000,000 to $350,000,000. Borrowings made
pursuant to this facility bear interest at either the lead bank's prime rate,
the federal funds rate plus 0.50%, the LIBOR rate plus a percentage spread based
on certain defined ratios, or a competitive bid rate. This agreement, among
other conditions, contains certain restrictive covenants including net worth
maintenance, minimum interest coverage and limitations on indebtedness, sales of
assets, and dividends. As of August 3, 1996, borrowing availability under the
revolving credit facility totaled $273,500,000; total cash, short-term
investments, available revolving credit amounts, and uncommitted facilities
totaled $351,200,000.

The Company expects that its current cash and cash equivalents, funds
anticipated to be generated from operations, and funds available under its
revolving credit and term loan facility will be sufficient to fund its planned
store openings and other recurring operational cash needs for at least the
remainder of the fiscal year. The Company is actively exploring implementation
of an asset-backed borrowing facility, which the Company expects will fund a
portion of its recurring operational cash needs through the end of fiscal 1997.
The Company is continually evaluating financing possibilities, and it may seek
to raise additional funds through any one or a combination of public or private
debt offerings, dependent upon market conditions, or through additional
commercial bank debt arrangements.


                                     Page 9


<PAGE>   10

FUTURE OPERATING RESULTS
- ------------------------

This quarterly report on Form 10-Q contains a number of forward-looking
statements. There are a number of important factors that could cause the
Company's results to differ materially from those indicated by such
forward-looking statements. These factors include, without limitation, the
following:

The Company operates in a highly competitive marketplace, in which it competes
with a variety of retailers, dealers and distributors. The Company competes in
most of its geographic markets with other high-volume office supply chains that
are similar in concept to the Company in terms of store format, pricing strategy
and product selection, such as Office Depot and OfficeMax. The Company also
competes with mail order stationers, wholesale clubs, mass merchandisers and
consumer electronics retailers. Some of the Company's current and potential
competitors in the office products industry are larger than the Company and have
substantially greater financial resources. No assurance can be given that
competition will not have an adverse effect on the Company's business. In
addition, if any of the Company's major competitors were to seek to gain or
retain market share by reducing prices, the Company may be compelled to reduce
its prices and thereby reduce its gross margin and profitability.

An important part of the Company's business plan is an aggressive store growth
strategy. The Company opened 94 stores in the United States and Canada in fiscal
1995 and plans to open approximately 120 new stores in fiscal 1996. There can be
no assurance that the Company will be able to identify and lease favorable store
sites, hire, train and integrate employees, and adapt its management and
operational systems to the extent necessary to fulfill its expansion plans. The
failure to open new stores in accordance with its growth plans could have a
material adverse impact on the Company's future sales and profits. Moreover, the
Company's expansion strategy is based in part on the saturation of its suburban
store network in existing markets to take advantage of economies of scale in
marketing, distribution and supervision costs; however, this can result in the
"cannibalization" of sales of existing stores. In addition, there can be no
assurance that the new stores opened by the Company will achieve sales or profit
levels commensurate with those of the Company's existing stores, particularly as
the Company enters new markets in which it has less experience or faces more
competition.

The Company has experienced and may experience in the future fluctuations in its
quarterly operating results. Factors such as the number of new store openings
(pre-opening expenses are expensed as incurred, and newer stores are less
profitable than mature stores), the extent to which new stores "cannibalize"
sales of existing stores, the mix of products sold, pricing actions of
competitors, the level of advertising and promotional expenses, seasonality, and
one-time charges associated with acquisitions or other events could contribute
to this quarterly variability. In addition, the Company's expense levels are
based in part on expectations of future sales levels, and a shortfall in
expected sales could therefore result in a disproportionate decrease in the
Company's net income.

The Company's business, including sales, number of stores and number of
employees, has grown dramatically over the past several years. In addition, the
Company has consummated a number of significant acquisitions in the last few
years, and may make additional acquisitions in the future. This internal growth,
together with the acquisitions made by the Company, have placed significant
demand on the management and operational systems of the Company. To manage its
growth effectively, the Company will be required to continue to upgrade its
operational and financial systems, expand its management team and increase and
manage its employee base.

                                     Page 10

<PAGE>   11

The Company has a presence in international markets through joint ventures with
locally-based companies in Germany and the United Kingdom, and may seek to
expand into other international markets in the future. The Company's operations
in foreign markets are subject to risks similar to those affecting its North
American stores in addition to a number of risks inherent to these joint
ventures, including lack of complete operating control and foreign currency
fluctuations.

The Company currently expects that its current cash and cash equivalents and
funds available under its revolving credit and term loan facility will be
sufficient to fund its planned store openings and other operating cash needs for
at least the remainder of the fiscal year. However, there can be no assurance
that the Company will not require additional sources of financing prior to such
time, as a result of unanticipated cash needs or opportunities, an expanded
growth strategy or disappointing operating results. There also can be no
assurance that the additional funds required by the Company, whether within the
next twelve months or thereafter, will be available to the Company on
satisfactory terms.


                                     Page 11



<PAGE>   12

                          PART II -- OTHER INFORMATION

Items 1-3, 5 - Not applicable.
- -----------------------------

Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------

At the 1996 Annual Meeting of Stockholders (the "Annual Meeting") held on May
23, 1996, the following matters were acted upon by the stockholders of the
Company:

1.   The election of Mary E. Burton, Rowland T. Moriarty, W. Mitt Romney, and
     Martin E. Hanaka as directors of the Company.

2.   The approval of amendments to the Company's Restated Certificate of
     Incorporation increasing the number of authorized shares of common stock of
     the Company to 500,000,000.

3.   The approval of amendments to the 1994 Employee Stock Purchase Plan to
     increase the number of shares of common stock covered by the Purchase Plan
     to 3,937,500 and to increase the number of six-month offerings under the
     Purchase Plan to eight, the last of which would expire on October 31, 1998.

4.   The ratification of the selection of Ernst & Young as the Company's
     independent auditors for the current fiscal year.

<TABLE>
The number of shares of common stock outstanding and entitled to a vote at the
Annual Meeting was 159,243,287. The results of the voting on each of the matters
presented to stockholders' at the Annual Meeting are presented below:

<CAPTION>
                                                    Number of Shares of Common Stock Represented By
                                                    -----------------------------------------------   
                                                                                               Broker
                                                 Votes For    Votes Against    Abstentions    Non-Votes
                                                 ---------    -------------    -----------    ---------
<S>                                             <C>            <C>               <C>           <C>
1.  Election of directors:                                                                  
     Mary E. Burton                             134,479,753        N/A             N/A           N/A
     Rowland T. Moriarty                        133,629,831        N/A             N/A           N/A
     W. Mitt Romney                             134,576,897        N/A             N/A           N/A
     Martin E. Hanaka                           134,514,769        N/A             N/A           N/A
                                                                                            
2.  Approval of Amendments                                                                  
     to Certificate of Incorporation            108,308,722    29,720,793        121,710          0
                                                                                            
3. Approval of Amendments                                                                   
     to 1994 Employee Stock                                                                 
    Purchase Plan                               134,589,162     2,890,847        242,822       428,394
                                                                                            
4.  Ratification of Independent                                                             
     Auditors                                   137,218,372      844,474          88,379         N/A
</TABLE>
         
A description of the matters voted on by stockholders is contained in the
Company's definitive Proxy Statement for the Annual Meeting, which is on file
with the Securities and Exchange Commission.

                                     Page 12


<PAGE>   13

Item 6 - Exhibits and Reports on Form 8-K.
- -----------------------------------------

A.   Exhibits.

     10.1 Staples, Inc. Second Amended and Restated Revolving Credit Agreement
          dated as of May 25, 1994 and amended and restated as of July 10, 1996.

B.   Reports on Form 8K.

     None.

                                    Page 13

<PAGE>   14


                                  SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





Date:  September 13, 1996                          /s/   Thomas G. Stemberg
       ------------------                         --------------------------
                                                  Thomas G. Stemberg
                                                  Chairman of the Board and
                                                  Chief Executive Officer
                                         


                                   Page 14

