Staples' sales, earnings fell in fourth quarter

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Framingham-based Staples Inc. saw a steep decline in earnings per share in the fourth quarter of 2014 along with weaker sales. And the office supplies retailer expects sales to continue falling in the first quarter of 2015.

Staples, which is in the process of merging with Office Depot, said Friday that total sales for the fourth fiscal quarter, which ended Jan. 31, were $5.7 billion. That was a decrease of four percent from the fourth quarter of 2013.

The change in earnings per diluted share was dramatic, with Staples reporting a net quarterly loss of $260 million or 41 cents per share. By contrast, the previous fourth quarter yielded net income of $212 million, or 33 cents per share.

A statement from the company said fourth-quarter results included $74 million in pre-tax restructuring and other charges.

“During the fourth quarter we achieved strong sales growth in our North American delivery businesses, further optimized our retail store network, and improved profitability in our International business,” Ron Sargent, Staples’ chairman and chief executive officer, said in the statement.

“Our strategic reinvention is gaining momentum, and in 2015 we expect to benefit from the investments we’ve made to accelerate sales and earnings growth.”

Total company sales grew 1 percent during the fourth quarter, excluding the impact of store closures in North America during the past year and changes in foreign exchange rates, the statement said. Excluding the impact of charges taken during the quarter, the company took in net income of $198 million, or 31 cents per share.

Staples closed 169 stores in North America in 2014, part of its plan to close at least 225 stores by the end of 2015.

Online sales, meanwhile, grew 8 percent in U.S. during in the quarter.

For the full fiscal year, sales decreased 3 percent to $22.5 billion. Excluding the impact of store closures in North America during the past year and changes in foreign exchange rates, year-over-year sales were flat , Staples said.

For 2015, Staples said it expects to generate more than $600 million of free cash flow. During 2014, Staples said it generated operating cash flow of $1 billion and invested $361 million in capital expenditures, resulting in a free cash flow of $682 million for the year.