Staples Falls Short In Q4

For the fourth quarter ended January 28, Staples posted a loss from continuing operations of $615 million, or 94 cents per share, versus a net income from continuing operations of $130 million, or 20 cents per share, in the period a year earlier.

For the quarter, Staples reported adjusted earnings from continuing operations of $161 million, or 25 cents per diluted share, versus $168 million, or 26 cents per diluted share, in the year-earlier period. Adjusted earnings per diluted share fell a penny short of an analyst average estimate published by MarketBeat.

Comparable sales slid 0.9%. Total sales were $4.56 billion versus $4.7 billion in the year-previous quarter. Operating loss for the quarter was $548 million versus operating income of $170 million and adjusted operating income was $243 million versus $261 million in the period a year before.

For the full fiscal year, net loss from continuing operations was $459 million, or 71 cents per share, versus net income from continuing operations of $462 million, or 71 cents per diluted share, in the year prior. For the full year, Staples reported adjusted earnings from continuing operations of $586 million, or 90 cents per diluted share, versus $598 million, or 93 cents per diluted share, in the prior year.

Comparable sales slipped 0.7%. Total sales were $18.25 billion versus $18.76 billion in the previous year. Operating loss in the fiscal year was $264 million versus operating income of $713 million and adjusted operating income was $905 million versus $933 million in the period a year before.

Staples changed its operational structure during the fourth quarter of 2016 to align with its strategic plan and reflect its priorities to accelerate growth. Under the new structure, the North American delivery segment includes Staples Business Advantage, staples.com, staples.ca and quill.com. The North American retail segment includes Staples retail stores in the United States and Canada.

In North American delivery, sales in the fourth quarter were $2.65 billion versus $2.68 billion in the year-earlier period, as comps gained 1%. In the North American retail segment, sales were $1.65 billion versus $1.8 billion in the year-prior period as comps fell 7%. Staples asserted that store closures negatively impacted fourth quarter 2016 sales by about 2% while the comp loss reflects declines in mobility, business machines, technology accessories and ink and toner revenue partially offset by growth in print and marketing services.

“Our fourth quarter results were right in-line with our expectations, and I’m increasingly confident that we have the right plan and the right team to transform Staples and get back to sustainable sales and earnings growth,” said Shira Goodman, Staples CEO.