Weather, disappointing e-commerce results hurt Staples' fiscal 2010 sales
Staples said March 2 that sales increased 1% year-over-year to $24.5 billion in fiscal year 2010, while net income grew 19% to $882 million. However, bad weather and weak e-commerce orders hurt the company.
Total company sales in fiscal Q4 2010, which ended January 29, increased slightly to $6.4 billion, a 0.14% increase compared with the fiscal fourth quarter of 2009. Net income in the quarter increased 17% year-over-year to $275 million.
“Prior to the holiday weekend, our Q4 results were consistent with our plan,” said Ronald Sargent, Staples chairman and CEO. “Then the storms disrupted our business every week until early February. This impacted earnings [by] about $70 million…January is typically our biggest and most important month of the year. The storms proved hard to overcome.”
The inclement weather forced Staples to lose 600 days to store closures. E-commerce orders did not offset those losses, as “average order size is still weak” on Staples.com, Sargent said. However, he added that sales from new customers were strong.
Staples' North American retail operation reported $9.5 billion in sales for the fiscal full year, a 2% increase compared with the prior fiscal year. Fourth-quarter sales for the North American retail unit decreased 1% to $2.6 billion, compared with Q4 2009.
“Demand for PCs was weak, but other technology items, like the Kindle, sold well during the holiday season,” said Sargent. “We recently launched a national TV campaign to build brand awareness for our technology offerings.”
The company's North American delivery business reported $9.8 billion in sales, an increase of 2% compared with full fiscal year 2009. In Q4 2010, the North American delivery business generated $2.5 billion in sales, a 3% increased compared with the fourth quarter of 2009.
Staples' international business saw sales decrease 2% year-over-year to $5.2 billion in FY 2010. Fourth-quarter sales dropped 3% to $1.4 billion compared with Q4 2009.