Staples' Profits Plummet On Restructuring Costs

Framingham-based office supply retailer Staples Inc. ended its fourth quarter with a slight uptick in revenue but a big drop in profits, related mainly to store closures and restructurings.

For its fourth quarter, which ended Feb. 2, the company's sales increased 3 percent to $6.57 billion. Profits were $78.1 million, down 72 percent from $283.6 million during the fourth quarter of last year.

The quarter's results include pre-tax charges of:

• $181 million related to European store closures and restructuring

• $57 million related to early retirement of debt

• $26 million related to the termination of a joint-venture agreement in India.

For the full year, sales dropped 1.2 percent to $24.38 million and a profit of $984.7 million last year swung to a loss of $210.7 million, a drop of 121 percent.

For the fiscal year ahead, Staples expects to increase sales in the low single-digits, with diluted earnings per share from continuing operations in the range of $1.30 to $1.35.

The company announced plans in September to reduce its retail footprint in North America by 15 percent as it seeks to shave $250 million a year in costs by the end of its 2015 fiscal year.

Its top two competitors – OfficeMax and Office Depot – announced in February that they would merge in an all-stock transaction.

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