Staples Inc reported lower-than-expected fourth-quarter sales, hurt by a strong dollar and weak demand for computers and related accessories, and the company said sales in the current quarter would be lower than those in the same quarter last year.
Continue Reading Below
However, the No.1 U.S. office supplies retailer posted a better-than-expected profit on Friday and issued an adjusted profit forecast that was in line with analysts' average estimate, helping to push up its shares in premarket trading.
The outlook excludes costs related to the company's $6.3 billion acquisition of smaller rival Office Depot Inc, which is being examined by the U.S. Federal Trade Commission.
The anti-trust watchdog is widely expected to approve the deal, which would leave the United States with a single specialty office-supplies retailer to compete with big-box chains such as Wal-Mart Stores Inc and online retailers such as Amazon.com Inc that have been taking business from traditional office-supply retailers.
Office Depot reported lower-than-expected sales last week and said it expected sales to drop this year.
Staples forecast adjusted earnings of 16-18 cents per share for the current quarter ending April. That compares with the average analyst estimate 17 cents per share.
Continue Reading Below
The company, which is closing stores to rein in costs, said same-store retail sales in North America fell 4 percent in the quarter ended Jan. 31.
Total sales fell 3.7 percent to $5.66 billion, the eighth straight quarterly decline. Analysts on average had expected sales of $5.76 billion, according to Thomson Reuters I/B/E/S.
Staples posted a net loss attributable to the company of $260.4 million, or 41 cents per share, after taking a pre-tax charge of $410 million for the impairment of goodwill in its international operations.
The company reported a profit of $212.4 million, or 33 cents per share, a year earlier.
Excluding items, however, Staples earned 31 cents per share, a cent better than the average estimate.
Staples shares were up 1 percent at $16.68 in premarket trading. Up to Thursday's close, Staples' shares had fallen 13 percent since its deal to buy Office Depot was announced on Feb. 4. (Reporting by Sruthi Ramakrishnan and Yashaswini Swamynathan in Bengaluru; Editing by Maju Samuel)