Shares of Staples (NASDAQ:SPLS) dropped sharply on Wednesday as declining sales dampened quarterly profits.
The company announced that it earned $120.4 million during the second quarter, down 32% from $176.4 million in the same period last year.
The office supply chain recorded sales of $5.5 billion, down 5.5% from 2011. That disappointed Wall Street, which had expected sales of $5.72 billion, Dow Jones noted.
Adjusted EPS for the quarter was 22 cents, which matched analysts’ estimates.
Investors didn’t care for the results. Staples shares fell more than 17% in Wednesday morning trading.
Staples said its gross margin declined from 26.5% last year, to 26%.
Company officials noted that North American sales had been worse than anticipated — falling 2.7% from last year– and that they planned to reassess domestic operations to determine opportunities for cost cutting. International sales fell 18%. A strengthening U.S. dollar also negatively affected overseas sales, which would have fallen just 10% without currency exchanges.
Competing office supply chains OfficeMax (NYSE:OMX) and Office Depot (NYSE:ODP) have also encountered a challenging international sales environment. Shares of both companies fell more than 3% in Wednesday trading after Staples announced its quarterly results.