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Shares of the largest U.S. office supply
retailer fell nearly 9 percent in premarket trading on Tuesday
after the company reported its fifth straight fall in quarterly
sales.
Staples has been stocking its shelves with more electronics such
as tablets and offering copy and print services as demand wanes
for traditional office supplies such as paper and toner.
Like rival Office Depot Inc <ODP.N>, Staples is also facing
increasing competition from drugstores and mass merchants such
as Wal-Mart Stores Inc as well as from online retailers such as
Amazon.com Inc.
Staples plans to close 140 of its 1,846 stores in North America
this year.
The company's sales fell nearly 3 percent to $5.65 billion in
the first quarter ended May 3. Sales in North America rose just
1 percent, while international sales fell 4 percent.
North American sales were underpinned by breakroom supplies and
furniture, but were offset by declines in toner, paper, and core
office supplies.
Sales is expected to fall in the second quarter, Staples said
without providing figures.
The company forecast second-quarter earnings of 9-14 cents per
share, missing the average analyst estimate of 15 cents per
share, according to Thomson Reuters I/B/E/S.
Staples' net income fell 44 percent to $96 million, or 15 cents
per share, in the first quarter.
Staples took a pre-tax charge of $46 million related to the
closure of 16 stores in the quarter and its plan to close about
80 stores in the current quarter.
Excluding the charge and other items, the company earned 18
cents per share, missing the average analyst estimate by 3
cents.
Staples shares were down 8.8 percent at $12.20 in premarket
trading on Tuesday. They closed at $13.39 on Monday.
(Reporting by Siddharth Cavale in Bangalore; Editing by Savio
D'Souza)
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