Below is a summary of some of the highlights from Staples' SPLS fourth-quarter earnings conference call:
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- Didn't improve retail store productivity and also saw weaker than expected sales trends in core office supplies across the business.
- Staples.com sales in the fourth quarter were up 10% in local currency excluding the extra week from last year.
- This compares to 4% growth in the first three quarters of the year.
- About half of Staples' global sales are coming in through our public and commercial websites.
- More than 80% of sales on staples.com are to business customers and becoming more relevant every month.
- At the end of Q4, expanded assortment on staples.com, staples.ca and quill.com were driving over $4 million in sales per week compared to about $1 million in sales per week at the beginning of the year.
- Building scale beyond office supplies and we're becoming more credible with our business customers.
- Many small and medium-sized businesses spend more on copy and print than they do on office supplies and Staples is best positioned to meet the needs of those customers.
- Lead generation is better, driving incremental traffic to stores and better leveraging online capabilities to accelerate growth in this high-margin business.
- At the beginning of the year, committed to driving $150 million in gross savings.
- Surpassed this goal and we achieved over $200 million of cost reductions for the year.
- Reduced our retail footprint by more than 1,000,000 square feet through 40 net store closures and 40 downsizes and relocations.
- Developed a new 12,000 square foot store, we now have about 30 of these new stores in operation, which continues to retain over about 95% of sales.
- This morning, announced that over the next two years, company plans to close up to 225 stores in North America.
- During the fourth quarter, added iPad in over 900 of our U.S. stores.
- tarting next week, we'll kick off a program to eliminate more than 1,100 unproductive office supply SKUs in our stores.
- Biggest opportunities this year are related to supply chain, retail store closures and labor optimization, non-product related services, IT hardware and services, as well as marketing services.
- Negatively impacted by unfavorable weather during some of our highest volume weeks in Q4, and as a result, same-store sales declined in the double-digits during December.
- Also negatively impacted by the fact that company did not have Apple hardware in U.S. stores during the holiday season.
- Also had an unfavorable comparison to highly profitable extra week last year, the negative impact of fixed cost on lower sales and increased cost related to growth initiatives in staples.com.
- Competitive intensity during the shorter holiday season, as well as unfavorable weather in some of strongest markets like the Northeast, resulted in sales trends that fell well short of expectations.
- Continued to experience relatively weak demand for higher-margin, core office supplies across the business.
- Changing guidance practices and no longer providing annual sales or EPS guidance.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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