Staples reported a smaller-than-expected sales drop in the second quarter, although the office-supplies retailer stayed focused on its plan to cut costs with the announcement that it shuttered 80 stores in North America, as previously promised.
Staples (SPLS), which has sought to trim its square footage by relocating and downsizing stores, earlier this year unveiled a plan to close up to 225 stores by 2015. It closed 16 in the first quarter of this year, and the retailer on Wednesday said it plans to close about 140 stores in 2014.
Office-supplies retailers like Staples face competition from Amazon.com (AMZN) and other online retailers, as well as a cyclical downturn in demand for office supplies in the digital age. Unlike many brick-and-mortar retailers, Staples has a strong online business (it generates roughly half of its sales online), and Staples.com sales jumped 8% in the latest period as Staples won over more business customers and expanded sales beyond office supplies.
Overall, Staples reported a 1.8% drop in sales to $5.22 billion, with adjusted profit for the second quarter totaling 12 cents, down 25% from last year. Analysts surveyed by Bloomberg had projected a 12-cent profit on $5.17 billion in sales.
The strong growth on the web helped offset weakness at the stores (further proof why Staples is moving to shrink its footprint). Second-quarter North American sales were down 5.8%, hurt by a 5% drop in same-store sales. Staples reported weaker sales for computers, ink and toner and core office supplies. Traffic dropped 4%.
The North American commercial business posted a 2.6% increase in sales, while sales slid 0.5% for the company’s international business.
WATCH: The Q2 blues