When global supply company Staples reported its fifth consecutive year of declining revenue on 4 March, CEO Ronald Sargent also announced the company would close 50 more of its stores. This would bring the number of ‘shuttered locations to 300 since the beginning of 2014,’ noted the US’s 22 News.
However, Staples revealed it will continue to ‘push forward plans to acquire its rival Office Depot, but is working on a “plan B”’ in case this doesn’t happen.
This alternative plan includes ‘boosting sales of other products besides office supplies and closing more stores’.
“Our top priority is to get the deal done,” said Sargent, adding that the company needs to persuade ‘anti-trust regulators that a combined company has the best chance of survival in a vastly changed landscape that has eroded sales across the industry’.
The Federal Trade Commission argued that ‘a tie-up of the two companies would stifle competition’ and that businesses would be ‘forced to pay more’ for office supplies. However, ‘European regulators have approved the deal, as long as the company sells some its operations,’ stated the news report.
‘Staples said it expects sales in the quarter to fall, but did not provide specific numbers.’ It expects earnings of between AUD 21 and 24 cents, while Wall Street projects per-share earnings of AUD 21 cents.
Staples reported net income of approximately AUD $115.4 million ‘in the quarter, after reporting a loss in the same period a year earlier’.
On a per-share basis, the company said it had profit of AUD 17 cents. ‘Earnings, adjusted for one-time gains and costs’, were nearly AUD 35 cents per share, which was almost AUD 3 cents ‘shy of analyst expectations, according to a poll by Zacks Investment Research’.
According to the news report, Staples’ quarterly revenue was just over AUD $7 billion. For the year, the company reported profit of approximately AUD $508.7 million, or about AUD 79 cents per share. Revenue was reported as just over AUD $28.2 billion.