Boston, MA 08/20/2014 (wallstreetpr) – Office products company, Staples, Inc. (NASDAQ:SPLS) disclosed that it had closed 80 stores in North America in the second quarter. This apart, the company is also planning to shut down another about 140 stores in the same region in the current year.
The company Chairman and Chief Executive Officer, Ron Sargent, said that it had to close down some underperforming stores in the second quarter and also intends to continue the efforts in the remainder period of the current year.
He said that it had to do more work in order to steady its retail business. Staples, Inc. (NASDAQ:SPLS) was also taking steps to improve customer traffic apart from cutting down its expenses to improve its bottom line. The CEO indicated that he could witness faster growth in its delivery businesses as customers are turning towards them beyond office supplies.
Outlook For 3Q
Staples said that it predicts sales to fall in the third quarter compared the last year period. It also expects adjusted earnings to be 34 – 39 cents a share for the same period. The company indicated that the forecast excluded any possible impact on restructuring or related activities. On average, Wall Street analysts’ expect Staples, Inc. (NASDAQ:SPLS) to earn 37 cents a share.
For the full year, the company expects to generate over $600 million of free cash flow.
Staples, Inc. (NASDAQ:SPLS) reported net income of $82 million for the second quarter, down 20.4% from $103 million while earnings per share dipped 18.8% to 13 cents from 16 cents in the prior year quarter. The results included various pre-tax charges in connection with the shutting down of 80 stores. Excluding charges, the company’s net income would have been $75 million or 12 cents a share. Still, earnings per share came in above the Street analysts’ predictions of 11 cents a share.
Staples, Inc. (NASDAQ:SPLS)’s top line fell 1.8% to $5.22 billion from $5.32 billion in the previous year quarter, which was higher than the analysts’ estimations of $5.16 billion. Staples, Inc. (NASDAQ:SPLS) attributed the sales drop to store closure in North America and unfavorable impact from foreign exchange rates.