Staples Q4 Profit Miss Estimates; Plan To Close Up To 225 Stores By 2015

(RTTNews) - Office supplies retailer Staples Inc. (SPLS) reported that net income attributable to the company for the fourth quarter ended February 1, 2014 significantly increased to $212.38 million or $0.33 per share, from $78.06 million or $0.12 per share in the same quarter last year.

Non-GAAP earnings per share from continuing operations were $0.33 down from $0.46 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

The company reported fourth quarter 2013 income from continuing operations of $212 million, or $0.33 per share, compared to $90 million, or $0.14 per share, achieved in the fourth quarter of 2012.

Quarterly sales declined to $5.87 billion from last year's $6.57 billion. Fifteen analysts estimated revenues of $5.97 billion for the quarter.

Excluding $461 million of sales recorded during the 53rd week in fiscal year 2012, total company sales decreased four percent compared to the fourth quarter of 2012. Fourth quarter 2013 total company sales growth was negatively impacted by approximately one percent due to 109 store closures in North America and Europe during the 12 months preceding the fourth quarter of 2013. Changes in foreign exchange rates also negatively impacted total company sales growth by one percent during the fourth quarter of 2013.

The company said it initiated a plan to close up to 225 stores in North America by the end of 2015. The company also initiated a multi-year cost savings plan which is expected to generate annualized pre-tax cost savings of approximately $500 million by the end of 2015. The savings are expected to come from supply chain, retail store closures and labor optimization, non-product related costs, IT hardware and services, marketing, sales force, and customer service.

For the first quarter of 2014, the company expects sales to decrease versus the first quarter of 2013. The company expects to achieve earnings per share in the range of $0.17 to $0.22 for the first quarter of 2014. This guidance does not reflect any potential impact on sales or earnings per share related to 2014 restructuring activities. Analysts expect the company to report earnings of $0.27 per share and revenues of $5.74 billion for the first-quarter.