Staples’ web sales growth slows to 1% in Q1
May 21, 2015 03:45 PM
Staples Inc. grew online sales 1% during its first fiscal quarter, as total sales declined and it continued to shutter stores across North America, the office supply retail giant announced Wednesday in its quarterly earnings release.
The merchant says it’s still pressing for regulatory approval of its proposed acquisition of Office Depot Inc., and that the deal is on track to close, though it did not share details on timing.
Over the past two years, Staples has invested heavily in its Staples.com e-commerce site, which serves consumers and small businesses, and it expects to see returns on those investments this year. “While our investments will moderate this year, we remain focused on continuing to improve the customer experience on Staples.com,” CEO Ron Sargent said on a conference call with analysts. “We're improving the site design and speed, we're increasing the relevance of our search function and we're streamlining the checkout process with a focus on making the overall shopping experience easier for new and repeat customers.”
Company executives also addressed the fact that online sales growth was slowing compared to previous quarters, and said the merchant was focused on going after business customers and customers that shop online and in stores, because both types of shopper tend to buy more and drive more profits for the company. “Top priority for us for Q1 for the dot-com business specifically was to basically strike better balance between sales and margins,” said Demos Parneros, president of North American stores and online. “The focus on more balance basically led us to more focus on the right customer, which led to slightly lower sales than last quarter and improved profitability.” Staples sells to larger business clients on StaplesAdvantage.com and Quill.com.
During the quarter, the merchant also rolled out a redesigned version of StaplesAdvantage.com to one-half of its customers and says early results are encouraging. “This new site is faster, it's more personalized and provides a more streamlined checkout experience,” Sargent told analysts.
Staples closed 28 stores in North America during the first quarter. Since the beginning of 2014, it has closed 197 stores as part of a previously announced plan to close at least 225 stores in 2014 and 2015.
For the first quarter ended May 2, Staples reported:
- Staples.com e-commerce sales growth of 1%. The merchant did not break out a dollar figure.
- North American stores and online sales were down 9.9% to $2.37 billion from $2.63 billion.
- International sales fell 18.9% to $782 million from $964 million.
- Net sales decreased 6.9% to $5.26 billion compared with $5.65 billion in the first quarter of fiscal 2014.
- Comparable store sales declined 5%.
- Net income fell 38.5% to $59 million compared with $96 million.
Staples is ranked No. 3 in the Internet Retailer 2015 Top 500 Guide.