Staples stock down as Framingham co. sales decline
Staples Inc. shares slid yesterday, as the Framingham office supplies chain reported sales well below Wall Street expectations, primarily due to weak demand for technology products, office supplies, ink and toner.
Staples’ shares sank 3.54 percent to close at $8.99, after falling 5.5 percent. The company’s restructuring efforts impacted net income. Staples reported an $815 million net loss for the first quarter that ended April 29, compared to $41 million in net income in the prior-year period.
Staples has narrowed its focus to North America, where it’s closing stores and targeting mid-market businesses for deliveries. It recorded a $907 million loss when it sold controlling interest in its European business in February and a $1?million loss when it sold its Australia and New Zealand businesses in April.
Staples’ total sales fell 4.9 percent to $4.1?billion — missing analysts’ target by $350 million — with a 2.8 percent decrease in North American delivery sales and 8.2 percent drop in North American retail sales. Store closures negatively impacted the latter by about 2 percent. Same-store sales fell 6 percent.
CEO Shira Goodman put an upbeat gloss on the results, saying 2017 was off to a good start.
“Consistent with our strategy, we drove solid sales growth in the mid-market and improved profitability in North American retail,” she said.
But GlobalData Retail analyst Carter Harrison said that while Staples’ business is stabilizing, he sees few prospects for a sustained turnaround this year.
“If anything, we think the results serve up more of the same in terms of the declines Staples has been grappling with for many years,” he said.
Staples’ decrease in store sales is “grim,” and same-store sales have been in decline since 2006, he said.