Staples posts hefty loss on charges, but tops view
Staples reported that it lost $596.3 million in its third quarter, pulled down by restructuring and impairment charges and lower revenue. But the office products company's adjusted results beat analysts' expectations.
Staples has been working on 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.
Its shares rose 5 percent in premarket trading.
The chain said Wednesday that its loss amounted to 89 cents per share for the period ended Oct. 27. That compares with a profit of $326.4 million, or 47 cents per share, a year ago.
The results were reduced by a previously-disclosed charge of more than $790 million for the reduced value of assets in its European retail and catalog business. Stripping out that and other restructuring charges and other items, earnings from continuing operations were 46 cents per share. Analysts polled by FactSet forecast 45 cents per share.
Revenue fell 2 percent to $6.35 billion from $6.48 billion. Wall Street expected $6.45 billion.
Revenue for the North American delivery segment, which caters to businesses, edged up 1 percent to $2.6 billion on strong sales of facilities and breakroom supplies and copy and print services.
For the North American retail division, revenue was flat at $2.6 billion with revenue at stores open at least a year down 1 percent as traffic declined. Weaker computer and software sales were somewhat offset by stronger results from copy and print services and core office supplies.
Revenue for international operations dropped 12 percent to $1.1 billion, hurt by soft sales in Europe and Australia and a stronger dollar.
Staples Inc., which is based in Framingham, Massachussetts, reaffirmed its full-year forecast for a low single-digit percentage rise in its full-year earnings when compared with 2011's adjusted earnings of $1.37 per share. Revenue is expected to be about the same as the prior year's $25.02 billion.