Staples releases financial figures
Staples Inc., the No. 2 U.S. office supply chain, announced Tuesday that fiscal fourth-quarter profit fell 21 percent.
The Framingham, Mass.-based company’s profit from operations fell to $94 million from $119 million the year before.
However, with the announcement Tuesday afternoon, Staples stock rose $1.56 to $16.56 on the Nasdaq exchange.
“Sales didn’t grow as fast as we wanted,” Staples Public Relations Manager Shannon Lapierre said.
She also cited charges including investments the company was forced to write off in that quarter, among other reasons.
The slowing economy and even the uncertainty of the presidential election’s effect on the stock market last November didn’t help matters, company officials noted.
“The fourth quarter and the year clearly challenged us,” Staples Chairman and Chief Executive Officer Thomas Stemberg said.
Sales at stores open at least a year rose 3 percent, compared with a 10 percent increase a year earlier.
“The continued deterioration of the economy during the back half of the year, coupled with our own aggressive growth initiatives, hampered our performance. For 2001, we’re employing a more conservative approach to growth, with a stronger focus on fewer initiatives,” Stemberg added, referring to store openings.
The retail giant indicated its fourth-quarter sales slowdown occurred at a time when it was spending on this new store growth, thus reducing the bottom line.
“We entered a lot of new markets last year in places where an office supply store was not used before,” Lapierre said. “What we have found is those stores take longer to reach profitability.”
Lapierre couldn’t comment on the fiscal health of the new South Lake Tahoe store that opened in December.
Store Manager Adrian Narvaez declined to release sales numbers from the South Shore retailer. He also refused to release the number of employees or whether the store has experienced an increase or decrease in staffing since its opening.
On the upside, Staples.com revenue grew more than five-fold to $512 million.
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