Staples Reports Q3 Financials
Net Income Jumps 60%
Massachusetts-based Staples, Inc., the parent company of Counselor Top 40 distributor Staples Promotional Products (asi/120601), announced its total revenue for the quarter ended November 1 decreased 2.5% to $5.96 billion. Net income, though, jumped 60% to $216.8 million, as the firm continues to shutter stores and invest in other areas.
“We’re building momentum as we reinvent Staples,” said Ron Sargent, Staples’ chairman and CEO. “During the third quarter, we accelerated growth in our delivery businesses, gained traction in categories beyond office supplies, and changed the way we work to drive cost savings.”
While Staples’ North American store and online sales fell 6% year-over-year, the firm’s commercial division continues to makes gains. Along with breakroom supplies, furniture, and technology, print and ad specialties were among the company’s strongest segments in Q3. Staples did not provide exact numbers, but Sargent said in an earnings call that the company’s promotional products sales increased by “double digits” in the third quarter.
In the call, Sargent also announced that Staples, Inc. now plans to shut 170 North American stores this year, higher than the 140 previously forecast. The company, which has resolved to save $500 million in annual costs, said it had achieved over $200 million in yearly savings so far. Looking abroad, total international Q3 sales at Staples, Inc. were $970 million, a decrease of 4% in U.S. dollars. Revenue in China declined and store sales in Europe were flat during the third quarter of 2014, reflecting a decrease in traffic.
In its fourth quarter outlook, Staples, Inc. said it expects sales to decrease year-over-year, although the company did not offer a revenue range. Counselor ranks Staples Promotional Products as the largest distributor in the industry, estimating the firm’s 2013 North American ad specialty sales were $434 million.