American office supplies distributor Staples has released quite disappointing results: in the fourth quarter of the financial year 2012/2013, the company had lower sales and a lower profit than expected.
Sales below expectations
In the last quarter sales rose 3% to 6.56 billion dollar (5 billion euro), well below the 6.72 billion euro (5.16 billion euro) analysts had expected. Better sales for tablets, e-readers and printers were largely nullified by lower sales in computers, digital cameras and software.
Sales of the fourth quarter, which was a week longer than in the past year, couldn’t save the day: global sales over the last 12 months dropped by 12% to 24.381 billion dollar (18.70 billion euro).
Symptomatic for entire economy
The results of Staples are seen as a kind of barometer: sales of office supplies are thought to reflect the condition of the entire economy. If that is right, companies in Europe and North-America are still feeling the pinch: in North-America comparable sales in the fourth quarter were lower by 5%, when compared to last year. In Europe the drop was even bigger, 9%.
The profitability of the company was also disappointing. In the fourth quarter net profits stuck at 78.1 million dollar (59.92 million euro), compared to 283.6 million dollar (220 million euro) last year. Over the entire year Staples, even goes below zero: the financial year 2012/2013 closed with a loss of 210.7 million dollar (160 million euro) - in 2011/12, there still was a profit of 984.7 million dollar (750 million euro).
This big recline was partially caused by a big reorganising: staples reduced its physical locations and invested more in online and mobile sales.