So how many people in IT are getting SH$%%^t canned over this. This is really embarrassing.
The independent registered public accounting firm, Ernst Material Weakness Revealed in Internal Controls (SPLS)
Shares of Staples (SPLS 8.63, -0.33) have surrendered 3.7% after the office supply retailer reported in-line results.
The company reported in-line fourth quarter earnings of $0.25 per share on a 2.9% year-over-year decline in revenue to $4.56 billion, which was shy of expectations. The company's report revealed a material weakness in internal controls over financial reporting, which has likely contributed to this morning's apprehension.
Total company comparable sales declined 0.7% year-over-year. This masked a 1.0% year-over-year increase in North American Delivery comparable sales. The North American Delivery segment is a newly-established category, which includes Staples Business Advantage, staples.com, staples.ca, and quill.com. North American Delivery operating income was little changed year-over-year at $168 million.
North American Retail comparable sales declined 7.0% while net sales fell 8.2% year-over-year to $1.65 billion. Segment operating income declined to $99 million from $106 million one year ago. Store closures reduced fourth quarter sales growth by about two percentage points. Declines in mobility, business machines, technology accessories, and ink & toner were partially offset by growth in print and marketing services.
Looking ahead, the retailer expects that first quarter earnings will be between $0.15 and $0.18 per share, which encompasses current market expectations. The company expects to generate at least $500 million in free cash flow and plans to close about 70 stores in North America.