Staples 4Q hit by charges, adj. results top Street S
FRAMINGHAM, Mass. — Staples’ fiscal fourth-quarter net income dropped 72 percent, dragged down by charges related to store closings and other matters. Its adjusted results topped Wall Street’s view, but its forecast for this year was below analysts’ estimates.
The office products company also announced Wednesday that it is increasing its quarterly dividend by 9 percent.
Staples Inc. has launched a strategic plan that includes investing more in its online and mobile efforts and expanding the product assortment that it offers to its business customers. The efforts are aimed at serving customers’ better and accelerating growth.
For the period ended Feb. 2, the chain earned $78.1 million, or 12 cents per share. That’s down from $283.6 million, or 41 cents per share, a year earlier.
Excluding charges tied to stores closings and other items, earnings from continuing operations came to 46 cents per share. Analysts expected 45 cents per share, according to a FactSet survey.
Revenue rose 3 percent to $6.57 billion from $6.37 billion, helped by an extra week in the period. Taking out the sales during the extra week, revenue fell 4 percent from a year ago.
Wall Street forecast $6.71 billion in revenue.
Sales for the North American stores and online segment — which includes retail stores and its online businesses in the U.S. and Canada — climbed 3 percent mostly because of the extra week of sales. Better sales of tablets, e-readers, facilities and break-room supplies and copy and print services was somewhat offset by lower sales of computers, digital cameras and software.
Revenue at stores open at least a year fell 5 percent due to weaker traffic and a flat average order size. The results do not include online sales.
Online sales increased 7 percent in the quarter, but dipped 1 percent when taking out the extra week of sales.
For the North American commercial unit, sales rose 7 percent primarily because of the extra week but also because of increased sales of facilities and break-room supplies. Sales slipped 1 percent when removing the extra week.
The division includes contract operations in the U.S. and Canada and Staples Quill.com business.
International sales dropped 4 percent because of softness in Australia and Europe. This was somewhat offset by sales brought in during the extra week. Taking out the extra week, sales dropped 11 percent.
Staples lost $210.7 million, or 31 cents per share, for the full year. In the prior year it earned $984.7 million, or $1.40 per share. Annual revenue edged down 1 percent to $24.38 billion from $24.66 billion.
The Framingham, Mass., company anticipates 2013 earnings between $1.30 and $1.35 per share. Revenue is expected to rise by a low single-digit percentage rate compared with 2012’s consolidated sales of $23.92 billion. Analysts expect $1.44 per share on $24.33 billion in revenue.
Staples raised its quarterly dividend to 12 cents per share from 11 cents per share. The dividend will be paid on April 18 to shareholders of record on March 29.
Its shares finished at $13.29 on Tuesday.