Staples Just Forecast Its 15th Consecutive Quarterly Sales Drop
Staples (SPLS), the biggest U.S. office supplies retailer, forecast its 15th straight quarter of declining sales as it closes stores in the face of intensifying competition.
Framingham, Massachusetts-based Staples said on Wednesday its total sales fell 3.7% to $4.75 billion in the second quarter ended July 30. Analysts on average had expected sales of $4.77 billion, according to Thomson Reuters I/B/E/S.
Sales at the company’s established stores in North America fell 5%, worse than the 3.1% drop analysts polled by research firm Consensus Metrix had expected.
Staples also reported a net loss of $766 million, or $1.18 per share, compared with a profit of $36 million, or 6 cents per share, a year earlier.
Apart from trying to buy Office Depot – a deal that fell apart over antitrust concerns – Staples has been responding to tough conditions by closing stores and focusing on serving medium-sized businesses rather than Fortune 500 ones.
The company reiterated that it would close 50 stores in North America this year. It closed a total of 242 stores in 2014 and 2015 as a part of its restructuring plan. Staples had 1,907 stores as of Jan. 30.
Staples is also focusing on offerings other than office supplies, such as electronics and furniture, and said in May it would step up deliveries to 80% of total North American sales within three years in an effort to compete with Amazon.
Excluding items, the company earned 12 cents per share, matching the average analyst estimate, according to Thomson Reuters I/B/E/S.
Staples said it expected sales in the current quarter to decrease from the same quarter last year but did not provide a specific forecast.
The company said it expected an adjusted profit of 32 to 35 cents per share. Analysts on average were expecting a profit of 35 cents per share.
Staples’ shares were down 1.3% at $9.30 in light premarket trading. The shares have lost about a third of their value in the past 12 months.