Updated from 9:24 a.m. to include information about the dividend in the ninth paragraph.
NEW YORK (TheStreet) - Staples (SPLS) shares were plunging 12.5% to $11.72 in early morning trading following news that the office supply chain missed fourth-quarter earnings and sales estimates and plans to close 10.5% of its store base over the next two years as it cuts expenses and focuses more on online sales.
The Framingham, Mass.-based company reported on Thursday a quarterly profit from continuing operations of $212.4 million, or 33 cents a share, compared to 90 million, or 14 cents a share, in the year-earlier quarter. Consensus was calling for earnings of 39 cents a share.
Sales for the final quarter of 2013 dropped 10% to $5.87 billion. Online sales, however, rose 10% in the quarter, Staples said. Analysts had expected the company to post sales of $5.97 billion for the quarter.
In North America, sales dropped 12.1% to $2.9 billion, with comparable store sales, which excludes online sales, down 7% in the quarter, primarily due to lower store traffic and smaller average ticket sizes.
At the beginning of 2013, Staples announced a plan to restructure the company to reduce costs and improve efficiency, mainly by focusing on its e-commerce platform. In 2013, Staples closed 42 stores in the U.S. and Canada (it opened two new stores), leaving it with a base of 1,846 stores in North America. Staples also has 282 stores in Europe.
With roughly half of its sales currently generated online, Staples is looking to close more stores - 225 in North America - by the end of 2015, it said Thursday.