Massachusetts-based Staples Inc., the parent company of Top 40 distributor Staples Promotional Products (asi/120601), has announced its sales for the quarter ended January 31 were $5.7 billion, a year-over-year decrease of 4%. For its entire 2014 fiscal year, Staples reported its revenues fell 3% to $22.5 billion – figures largely impacted by store closures and a stronger dollar. Company officials remain optimistic about the future, though, citing a better-than-expected Q4 profit of 31 cents per share.
“During the fourth quarter we achieved strong sales growth in our North American delivery businesses, further optimized our retail store network, and improved profitability in our international business,” said Ron Sargent, chairman and CEO of Staples. “Our strategic reinvention is gaining momentum, and in 2015 we expect to benefit from the investments we’ve made to accelerate sales and earnings growth.”
Several of Staples’ major business segments struggled in the fourth quarter. Its North American stores and online segment reported a 7% decrease in Q4 sales, while the firm’s international revenues dropped by 11% in U.S. dollars. In one bright spot, Staples’ North American commercial segment did report a 5% increase in fourth-quarter sales, reaching $2.1 million.
A key to improving financials for Staples, according to analysts, is the federal approval of the firm’s deal to acquire rival Office Depot for $6.3 billion. Despite some antitrust concerns, the agreement is expected to be green-lighted. “We are very pleased with the progress we are making on the transaction,” Sargent said last week.
Staples is forecasting adjusted earnings of 16 to 18 cents per share for its first quarter ending April, in line with the average analyst estimate. The company did not provide quarterly guidance for total sales or offer specific figures related to ad specialty revenues. Counselor ranks Staples Promotional Products as the largest distributor in the industry, estimating the firm’s annual sales to be approximately $435 million.