Staples North American Comps Tumble In Q1

Staples saw its North American retail comps decline in a mixed first quarter.

In the first quarter, Staples posted net income from continuing operations of $105 million, or 16 cents per share, versus $60 million, or nine cents per share, in the period a year ago. Adjusted net income from continuing operations was $113 million, or 17 cents per diluted share, versus $121 million, or 19 cents per diluted share, in the year-before quarter. Adjusted earnings per diluted share matched a MarketBeat analyst average estimate although sales fell somewhat short.

Comparable sales slipped 2.6% in the quarter year over year, as total sales slid 4.9% to $4.15 billion. Operating income was $163 million versus $122 million in the quarter a year prior, while adjusted operating income was $171 million versus $186 million in the year-earlier period.

In the first quarter, North American retail comps fell 6%, as overall sales declined 8.2% to $1.51 billion versus the quarter a year before. Operating income was $53 million versus $49 million in the year-previous quarter. According to Staples, the North American comp result was hit by soft sales in technology products, office supplies and ink and toner.

For the Staples Business Advantage operation, the company’s North American contract business, Shira Goodman, Staples CEO, said in a first quarter conference call that sales in break room and technology products advanced in the double digits, facilities products advanced in the high single digits and furniture and promotional products advanced in the low single digits.

Goodman said the current fiscal year, “is off to a good start and, consistent with our strategy, we drove solid sales growth in the mid-market and improved profitability in North American retail during the first quarter. Based on our success growing categories beyond office supplies, we’re intensifying our focus on several key growth categories including facilities supplies, breakroom supplies, furniture, technology solutions and promotional products, or what we now refer to as pro categories. We’re pursuing this opportunity from a position of strength as we bring together the products, services and expertise to provide a differentiated offering to business customers of all sizes.”