Massachusetts-based Staples Inc., parent company of Top 40 distributor Staples Promotional Products (asi/120601), announced a 2.8% decrease in total sales for 2016, dropping revenues to $18.2 billion overall. Total fourth-quarter sales were $4.6 billion, a decrease of 2.9% compared to 2015’s fourth quarter. In a continuing bright spot for the firm, though, Staples said its promotional products business achieved mid-single-digit growth in the fourth quarter.
“Our fourth-quarter results were right in line with our expectations, and I’m increasingly confident that we have the right plan and the right team to transform Staples and get back to sustainable sales and earnings growth,” said Shira Goodman, CEO of Staples. “I am particularly proud of our ability to grow our delivery business by continuing to enhance our offering and satisfy our business customers.”
As part of its long-term goal to reduce its retail footprint, the company closed 13 stores during the fourth quarter of 2016 and 48 stores for the full year in North America, ending the year with 1,255 stores in the U.S. and 304 stores in Canada. Staples also completed the sale of its retail business in the United Kingdom. In early November, the company acquired Capital Office Products, an independent office products reseller that generates more than $100 million in annual revenue.
Fourth-quarter sales at North American retail locations fell 8%, from $1.79 billion in 2015 to $1.64 billion in 2016. The North American Commercial sector, which includes Staples Business Advantage contract operations and promotional products business, declined 1% to $2.6 billion. Comparable sales grew 1% compared to the fourth quarter of 2015. The improvement primarily reflects growth in facilities supplies, computers and breakroom supplies, partially offset by declines in tablets, ink and toner and office supplies, Staples said. Comparable sales for Staples Business Advantage increased 4% versus the fourth quarter of 2015.
In its outlook for 2017, Staples expects to generate at least $500 million of free cash flow, and plans to close approximately 70 additional stores this year. In its earnings statement, the firm did not provide a 2017 sales forecast.