Staples Q2 Sales Down, Office Depot Acquisition On Track

Second quarter sales at Staples were down but company officials said the results were in-line with internal expectations as the office superstore chain remains on track to complete its acquisition of Office Depot by the end of the year.

For the period ending August 1, total company-wide sales were $4.9 billion, down 5% from sales of $5.2 billion in the comparable quarter the previous year.

On a GAAP basis, the company reported net income of $36 million, or $0.06 per diluted share. Second quarter 2015 results on a GAAP basis include pre-tax charges of $24 million related to restructuring and related activities, as well as $34 million related to the acquisition of Office Depot.

“Our second quarter results were in-line with our expectations and reflect steady progress on our strategic reinvention,” said Ron Sargent, Staples’ chairman and chief executive officer. “We continued to drive growth in our delivery businesses and in categories beyond office supplies, and we grew operating income during the second quarter. We remain on track with the acquisition of Office Depot, which we expect to close by the end of 2015.”

Sales for the second quarter in the company’s North American stores and online segment were $2.1 billion, a decrease of 8% compared to the second quarter of 2014. Sales growth was negatively impacted by approximately 4% due to store closures during the past year. Changes in foreign exchange rates also negatively impacted second quarter 2015 sales growth by approximately 3%.

Comparable sales, which combines comparable store sales and Staples.com sales growth excluding the impact of changes in foreign exchange rates, decreased 2% versus the prior year. Sales declines in mobility, business machines, technology accessories and computers were partially offset by growth in ink and toner, copy and print and facilities supplies.

Sales for the second quarter in the company’s North American commercial division were $2 billion, an increase of 3% compared to the second quarter of 2014. This primarily reflects growth in facilities supplies, breakroom supplies, furniture and promotional products, partially offset by sales declines in ink and toner and paper.