Staples beats estimates, will close 140 stores
Although second-quarter sales declined 2 percent over 2013, Staples beat analysts’ expectations with earnings of 13 cents per share, the Framingham-based office supplies retailer announced Wednesday.
Analysts were expecting earnings of 11 cents per share, according to Thomson Reuters.
But as the company shifts more of its sales to online channels, Staples said it plans to close 140 stores by the end of the year, after shutting down 80 retail outlets in North America during the second quarter, which ended Aug. 2. Earlier in 2014, Staples announced it would close up to 225 stores due to declining in-store traffic. The closures are expected to cut costs by $500 million annually by 2015.
“We have more work to do to stabilize our retail business, and we’re taking action to improve customer traffic, reduce expenses, and close underperforming stores,” CEO Ron Sargent said in an earnings statement.
The company is in the middle of a restructuring plan that also includes downsizing of existing stores, expansion of product offerings beyond office supplies, and increased online offerings.
Sargent said the company is “accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies.”
“We have more work to do to stabilize our retail business, and we’re taking action to improve customer traffic, reduce expenses, and close underperforming stores,” Sargent said.
Sales totaled $5.2 billion in the second quarter, compared with $5.3 billion in 2013. Meanwhile, net income declined to $82 million from $103 million.
Staples said restructuring costs related to the store closures totaled $101 million in the quarter.
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