Staples Reports Revenue Drop; Profits Up
Third-quarter revenue for Staples fell nearly 4 percent as the Framingham-based office supply retailer cited weak demand for “core” office supplies, but growth in its online sales channels.
The company said the closing of 107 retail stores in North America and Europe starting last year impacted revenue growth, dragging it down 1 percent. Staples also cited a negative foreign-exchange impact on sales from a stronger dollar. That took another 1 percent out of sales growth during the quarter, which ended Nov. 2, Staples said.
Revenue for the quarter was $6.1 billion, in line with the expectations of analysts polled by Yahoo Finance, but down from $6.4 billion in the same quarter last year. For the first nine months of the current fiscal year, revenue is at $17.2 billion, also trailing last year’s pace of $17.8 billion.
“It’s been a year since we announced our strategic reinvention, and we’re evolving our business to meet the changing needs of customers,” Ron Sargent, Staples’ chairman and CEO, said in a statement.
Despite the revenue drop, Staples improved its profitability during the quarter, reporting net income of $135.2 million (21 cents per share), as opposed to a loss of $596.3 million in the same quarter last year. For the first nine months of its fiscal year, the company reported net income of $407.7 million (63 cents per share), a huge turnaround from last year, when it had lost $288.8 million during the same span.
The company said it forecasts full-year revenue at $23.9 billion, which would be a single-digit percentage drop. But that would be above analysts’ expectations of around $23.3 billion.
Sargent also said the company managed expenses “aggressively” during the quarter. Staples noted in its report that it reached its $150-million cost-reduction goal ahead of schedule.
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