Framingham, Mass. — Store closures and unfavorable currency fluctuations led to a 1.8 percent decline in Staples’ second-quarter sales, to $5.2 billion.
On a GAAP basis, net income fell 20.4 percent to $82 million for the three months, ended Aug. 2, reflecting the impact of $101 million in pretax restructuring and other related charges primarily associated with the closure of 80 stores in the second quarter, as well as plans to close about 40 stores in North America during the second half of the year.
Staples said will close about 140 North American stores in total this year. It operates some 1,800 stores in North American and maintains locations in 25 countries globally.
Online sales grew 8 percent, driven by increased business customer acquisition, improved customer conversion, and an expanded assortment beyond office supplies, the No. 1 office-supply chain said.
In addition, the company enjoyed double-digit growth on its in-store Staples.com kiosks, and further enhanced its multichannel customer experience with the launch of “buy online, pick up in store” capabilities.
In North America, total store and website sales fell 5.8 percent to $2.3 billion and storefront comps declined 5 percent. Net sales were impacted approximately 2 percent by store closures and 1 percent by currency fluctuations, and were also crimped by declines in computers and tech accessories.
The comp-store decline reflected a 4 percent drop in traffic and a 1 percent decline in average order size.
Operating income dropped 72 percent to $28 million, reflecting lower online product margins, increased marketing, and investments in online growth and “strategic reinvention.”
“We have more work to do to stabilize our retail business, and we’re taking action to improve customer traffic, reduce expenses and close underperforming stores,” chairman/CEO Ron Sargent said.
In contrast, sales within the company’s North American commercial segment rose 2.6 percent, with copy and print comps up by the mid-single digits in stores and double-digits online.