With its acquisition by a private equity firm pending, Staples’ comps slipped in the second quarter, although the office superstore did post a profit.
For the second quarter, Staples posted net income of $63 million, or 10 cents per diluted share, versus a net loss from continuing operations of $107 million, or 17 cents per diluted share, in the year-prior quarter. Adjusted net income from continuing operations for the quarter declined from $76 million, or 12 cents per diluted share, to $87 million, or 13 cents per diluted share, year over year. Diluted earnings per share from continuing operations paced an analyst average estimate published by MarketBeat.
Comparable sales in the second quarter slipped 1% versus the year previous. Overall sales in the quarter were $3.91 billion versus $4.03 billion in the period a year earlier. Operating income was $106 million versus an operating loss of $167 million in the 2016 quarter, as adjusted operating income came in at $116 million versus $136 million in the year-before period.
In a filing with the United States Securities and Exchange Commission, Staples maintained that North American retail division sales declined to $1.36 billion from $1.44 billion in the 2016 quarter. The decrease in North American retail sales resulted from a 3% decline in comparable store sales resulting from lower customer traffic as well as a 2% unfavorable impact from store closures. The comp decline also reflects decreased sales of ink and toner, office supplies, computers and office machines.
Staples and private equity firm Sycamore Partners have entered into a pending merger agreement in which investment funds managed by Sycamore will acquire the office superstore in a transaction valued at approximately $6.9 billion.