On Thursday, office supply retail chain Staples (SPLS) announced that it will close hundreds of stores across the U.S. and Canada. The news sent Staples stock tumbling more than 10% in morning trading.
Staples stock sank after the retailer said it would close as many as 225 North American locations by 2015. Adding to Staples’ woes, the company forecast first-fiscal-quarter earnings of between 17 cents and 22 cents per share. That disappointed Wall Street, which had been looking for a first-quarter profit of 27 cents per share, Reuters noted.
During its fiscal fourth quarter, Staples posted adjusted earnings from continuing operations of 33 cents per share, which missed the 39 cents that analysts had estimated. Sales of $5.87 billion — down 10.6% from the prior-year period — also came in below the $5.97 billion that analysts had anticipated.
Staples indicated that it expects rising competition from online retailers like Amazon (AMZN) and discount brick-and-mortar retailers like Walmart (WMT) to dent sales in 2014. The company said that it has implemented a plan to reduce costs, generating annualized pre-tax savings of $500 million by 2015.
There are currently 1,515 Staples stores in the U.S. and 331 in Canada.
SPLS stock closed at $13,40 a share on Wednesday. SPLS stock has gained about 8% over the past 12 months.
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