Friday March 7th, 2014 - 2:24PM
For the fourth quarter ended February 1, Staples, Inc. posted net income from continuing operations of $212 million and earnings per diluted share of 33 cents versus $90 million and 14 cents in the year-ago period even as it announced plans to close 225 stores in North America by the end of fiscal 2015. On a non-GAP basis results were income from continuing operations of $212 million with earnings per diluted share of 33 cents versus $308 million and 46 cents in the 2012 quarter.
Non-GAAP results exclude charges taken in the fourth quarter of 2012.
The 33 cents in earnings per diluted share fell short of a Zacks Consensus Estimate of financial estimates, which came in at 39 cents.
Total company sales for the fourth quarter were $5.87 billion versus $6.57 billion in the year-prior period, down 10.6%. With $461 million of sales recorded during the fiscal 2012 53rd week excluded, total company sales decreased 3.8% compared to last year’s fourth quarter. Total company sales in the 2013 quarter lost approximately one percentage point due to 109 store closures in North America and Europe during the 12 months proceeding. Foreign exchange rate changes squeezed 2013 fourth quarter total company sales by percentage point.
Fourth quarter North American sales were $2.9 billion, a decrease of 12.1% versus the 2012 period. With $221 million of sales during the extra week in 2012 excluded, fourth quarter 2013 sales decreased 5.7%. Changes in foreign exchange rates depressed fourth quarter 2013 sales by approximately one percentage point. Sales growth also was hit by approximately one percentage point due to 63 store closures during the 12 months preceding, net of estimated sales transfers to remaining stores. Growth in facilities and breakroom supplies, paper and copy and print partially offset sales declines in business machines and technology accessories, office supplies and computers. Comparable store sales, excluding sales at Staples.com, slipped by 7%, reflecting a 6% decline in traffic and a 1% decline in average order size versus the prior year, Staples claimed. Staples.com sales grew 10% during the fourth quarter, excluding the impact of the extra week in 2012 and changes in foreign exchange rates, the company added.
For fiscal 2013, Staples reported that sales were $23.11 billion versus $24.38 in the full-year earlier. Excluding the extra fiscal 2012 week, a percentage point negative impact due to store closures, and a one percentage point negative impact due to changes in foreign exchange rates, 2013 total company sales decreased approximately 2% versus the prior year, the company asserted.
Staples posted full year 2013 income from continuing operations of $707 million, or $1.07 per diluted share, versus a loss of $161 million, or 24 cents per diluted share, for the prior year. Excluding charges taken during 2013, total company non-GAAP income from continuing operations was $761 millions and earnings per diluted share were $1.16 for the full year versus $936 million and $1.39 in the year earlier.
In a conference call, Staples CEO Ron Sargent said the company isn’t getting out of the retail business but that stores have to earn the right to stay open. The closure of 225 stores reflects Staples priorities including the acceleration of relocations and downsizes to the company’s new 12,000-square-foot format in 2014 as well as additional investments to enhance the omni-channel presence in stores, Sargent said.