Staples’ CEO Ron Sargent has been working to turn around the office supplies retailer. Progress has been slow, though last quarter’s results point to promising developments.
What you need to know: For every bright point in Staples’ earnings, there’s an equally disappointing fact.
Staples.com sales increased 9% over the third quarter. Meanwhile, same-store sales fell 4%, in-line with analysts’ estimates.
The retailer has been making progress with its two-year plan to eliminate at least $500 million of annualized costs. More than $200 million of annualized cost savings have been secured so far this year.
Some of those savings come from store closings. Staples boosted its store closures to 170 from a previous plan of 140. So far this year, it has closed 127 stores across North America.
The big number: Profits, excluding one-time items, were 37 cents per share in the third quarter, surpassing analyst expectations of 36 cents.
Revenue was down 2% year-over-year to $5.96 billion, but that beat analyst expectations of $5.93 billion.
What you might have missed: Staples (SPLS) has been fighting to stay relevant amid a changing retail landscape. Sales slumped as shoppers moved online and overall demand for traditional office supplies has shrunk.
Sargent has been revamping the retailer to become more competitive online, while also downsizing its physical retail presence.
“We’re building momentum as we reinvent Staples,” he said. “During the third quarter, we accelerated growth in our delivery businesses, gained traction in categories beyond office supplies and changed the way we work to drive cost savings.”
There’s still a ways to go. The company warned that sales during the holiday season would fall, as well. It estimated profits would be between 27 and 32 cents per share for the fourth quarter, largely below the average analyst estimate of 31 cents.