A Staples office supply store is seen in Springfield, Virginia, October 23, 2014. The office supply chain will close 70 stores due to sagging sales, it announced March 9, 2017. (Saul Loeb / AFP/Getty Images)
Staples shares fell as much as 7.4 percent in early trading after the company posted disappointing results and announced plans to shutter 70 stores in North America.
Same-store sales in the region declined 7 percent during the fourth quarter, the Framingham, Massachusetts-based company said on Thursday. Earnings came in at 25 cents a share in the period, excluding some items. That was a penny less than analysts estimated.
The store-closing move, which follows the elimination of 48 locations in 2016, will affect about 5 percent of stores in North America. Staples had 1,255 locations in the U.S. and 304 in Canada at the end of the last fiscal year.
Winnowing its store count is part of Staples’ plan to shift away from traditional brick-and-mortar retail. The company is looking to sell more business services and connect with customers online. Staples also offloaded its retail business in the U.K. last quarter.
The results sent Staples down as low as $8.30 in premarket trading. The stock had been down less than 1 percent so far in 2017.
The latest announcement comes almost a year after Staples’ failed attempt to acquire Office Depot. Federal regulators blocked the merger on antitrust grounds last May, arguing that it would hurt business customers. That sent the company in search of a new growth plan.
The fallout from the foiled deal included the resignation of Chief Executive Officer Ron Sargent and a sputtering stock. Shira Goodman, who had been serving as interim CEO, was named to the job permanently in September.
PHOTOS: From coast to coast, American retailers, stung by the rise of online shopping, are abandoning brick-and-mortar stores, annoucning closing after closing.
In October, Staples Inc. embarked on a new strategy to license its name and get more revenue from business services.
The company said on Thursday that earnings will be 15 cents to 18 cents a share in the first quarter, excluding some items. Analysts have predicted 17 cents.