Staples Inc. (SPLS) Shares Sink as Quarterly Results Disappoint

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Staples Store

Staples, Inc. (NASDAQ:SPLS) reported disappointing financial results for the fourth quarter of 2015 today. According to the company its total sales and non-GAAP earnings declined 6.9% and 16%, respectively.

The shares of the company are trading $9.77 per share, down by more than 1% at the time of this writing around 1:03 in the afternoon in New York.

Staples fourth quarter results

The company posted non-GAAP earnings of $0.26 per diluted share, down from $0.31 per diluted share in the same period in 2014. Its total company sales were $5.27 billion, down from $5.66 billion a year earlier.

The company closed 12 stores during the quarter and returned $308 million to shareholders through cash dividends in 2015.

Staples extended its merger agreement with Office Depot (NASDAQ:ODP) and financing agreements early this year to allow the completion of the ongoing federal litigation with the Federal Trade Commission (FTC). The company already approved its transaction with Office Depot, subject to certain divestiture requirements.

Staples signed an agreement with Essendant to divest more than $550 million of office products revenue and related assets subject to the successful completion of its deal with Office Depot.

First quarter 2016 guidance

The company expected is sales to decline and to achieve fully diluted non-GAAP earnings of around $0.16 to $0.18 per share for the first quarter of this year.

Staples explained that its guidance reflects the negative impact of the stronger dollar on earnings and sales. Its earnings guidance excluded any potential costs related to the Office Depot acquisition and ongoing store closures.

Staples has solid plan for earnings growth

In a statement, Ron Sargent, chairman and CEO of Staples said, “In 2015, our top priority was to stabilize total company sales and earnings after a few years of heavy investment to transform Staples. While our Q4 results came in at the lower end of our expectations, we continued to make good progress on many of our key initiatives, and we have a solid plan to get back to earnings growth in 2016.”