Staples sales drop 4% in second quarter

Office supplies retailer Staples reported a drop in sales in the second quarter, with store closures and a stronger dollar partly to blame.

Total sales for the second quarter came in at $4.8bn, down 4% from the same period last year.

Staples posted a net loss of $766m, or $1.18 per share, compared to a profit of $36m in the second quarter of 2015.

The group said store closures negative impacted sales growth by about 1%, while changes in foreign exchange rates also hit sales growth by approximately 1%.

Staples closed five stores during the quarter, with 19 stores shut year-to-date in North America as part of plan to close at least 50 stores this year.

Interim chief executive officer Shira Goodman said: “I’d like to thank the entire Staples team for remaining focused and delivering results that were right in-line with our expectations during a quarter that included the launch of a new strategic plan and a change in leadership.

“We are dramatically changing our mindset and operating model as we execute our 20/20 strategy and reposition Staples for sustainable long-term sales and earnings growth.”

Looking ahead, Staples said it expects sales in the third quarter to decline versus the same period last year. In addition, it forecasts diluted non-GAAP earnings per share of $0.32 to $0.35.

For the full year 2016,it expects to generate about $600m of free cash flow excluding the after-tax impact to operating cash flow of approximately $340m of charges associated with financing for the proposed acquisition of Office Depot and costs associated with the termination of the merger agreement.