Shares of national office supply retailer Staples (SPLS) fell 5 percent on Tuesday (May 16) morning following a Q1 earnings report that, while meeting earnings expectations, saw sales miss the mark for the period ending April 29.
This is the fourth quarter in a row Staples has posted earnings in line with expectations, bringing in $0.17 per share in Q1, on the mark for Zacks Consensus Estimate but down 11 percent year on year.
Sales were also down for the year and below expectations. For the quarter, Staples reported $4.15 billion total company sales, down 5 percent year on year and under analyst expectations of $4.54 billion.
Comp-store sales were down 2.9 percent in Q1.
Investors were also likely perturbed by the office supply retailer's plans to close 70 store locations by the end of the year, inclusive of the 18 North American outlets Staples closed in in Q1.
Downsizing has been the name of the game for Staples in the past few years In 2016, it closed 48 stores and another combined 242 for the two years before that. This brings the total number of store closings, including this year, to 360 locations. Staples ended Q1 with 1,237 stores in the U.S. and 304 stores in Canada.
Moving forward, Staples will continue growing its sales beyond office supply categories.
“We’re intensifying our focus on several key growth categories, including facilities supplies, breakroom supplies, furniture, technology solutions and promotional products, or what we now refer to as ‘Pro Categories,’" said Staples CEO Shira Goodman. “We’re pursuing this opportunity from a position of strength as we bring together the products, services and expertise to provide a differentiated offering to business customers of all sizes.”
In terms of outlook, Staples expects to bring in diluted non-GAAP earnings per share from continuing operations in the range of between $0.10 to $0.13 — with analysts anticipating $0.12 earnings per share in Q2.