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Staples to close a further 70 stores after fourth quarter loss

Thursday, March 9, 2017 7:41
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Office supplies retailer Staples Inc. (NASDAQ:SPLS) plans to close about 70 stores in North America this year after reporting a fourth quarter loss.

Staples posted a net loss of US$952mln in the quarter to 28 January 2017, compared to net income of US$86mln in the year-ago period. This amounted to a loss per share of 94c compared to earnings per share of 20c.

Excluding the impact of restructuring charges, earnings per share fell to 25c from 26c, missing the consensus forecast of 26c.

Total sales fell to $4.6bn from $4.7bn while comparable sales dropped 1% after Staples closed 13 stores during the period. 

Across the full year, the group closed 48 stores in North America and said it plans to shut a further 70 as part of a restructuring.

“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 chief executive Shira Goodman.

The company expects first quarter adjusted earnings per share between 15c to 18c, excluding charges related to the overhaul of the business.

For fiscal year 2017, Staples said it expects to generate at least $500mln of free cash flow. 

Late last year Staples decided to sell its UK business to turnaround firm Hilco in a £1 deal so it could focus on its core North American arm. Hilco will phase out 106 Staples shops across the country, which employ more than 1,100 staff. 

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