Staples posts 3Q profit despite restructuring
Nov. 20, 2013
FRAMINGHAM, Mass. (AP) — Staples Inc. reported a profit of $135.2 million for its third quarter, a year after the office supply company said heavy restructuring expenses led to a loss.
The Framingham, Mass., company said Wednesday it absorbed $64 million in charges before taxes for employee severance and other restructuring activities in this year's quarter, as it continued work on its strategic plan.
Like other office-supply retailers, Staples has been facing tough competition from discounters and online retailers. It has been investing more in its online and mobile efforts and expanding the product assortment that it offers to its business customers.
The company based in Framingham, Mass., said it still faces weak demand for core office supplies, but is seeing growth in tablets, breakroom supplies and copy and print services and is aggressively managing expenses.
Overall, the performance translated into earnings of 21 cents per share for the three months that ended Nov. 2. That compares to a loss of $596.2 million, or 89 cents per share, last year. Adjusted results this quarter totaled 42 cents per share, not counting the restructuring costs.
Revenue fell nearly 4 percent to $6.11 billion due in part to foreign exchange rates and 107 store closures in North America and Europe over the previous year.
Analysts surveyed by FactSet expected, on average, earnings of 42 cents per share on $6.19 billion in revenue, according to FactSet.
Revenue from North American locations open for at least a year fell 3 percent. This figure, which excludes online sales, is seen as a key metric for retailers because it strips out the volatility of newly opened and closed locations.
The company repeated a forecast it made in August for 2013 adjusted earnings ranging from $1.21 to $1.25 per share.
Analysts expect $1.23 per share, on average.
Shares of Staples rose 16 cents, or 1 percent, to $15.50 in premarket trading. They have climbed 35 percent in regular trading so far this year.