Source: Wikimedia Commons

In anticipation of Staples' (SPLS) earnings release for the fourth quarter of the 2013 fiscal year, shareholders are probably wondering if an investment in the retailer makes any sense. Heading into earnings can be an interesting time because of the prospect of a big gain should the company report better-than-expected results.

However, the bigger questions are whether the company makes for a good long-term investment and if it does, in turn, an attractive investment for the Foolish investor.

Mr. Market is very pessimistic!
For the quarter, analysts expect Staples to report revenue of almost $6 billion. This would represent a 9% decline in sales compared to the year-ago quarter. If the past is any indication, the drop in revenue will be due, in part, to a decline in the company's number of locations in operation. But it will mostly stem from a drop in comparable-store sales.

Looking at profitability, Mr. Market is even dourer about the business' prospects. For the quarter, analysts forecast earnings per share of $0.39. This represents a 15% drop in profitability compared to the $0.46 the business earned during the year-ago quarter and would largely be attributable to its expected falloff in sales.

Staples doesn't look great, but it crushes its peers!
Over the past four years, Staples has managed to perform well compared to its peers, but the company falls far short of what some might consider great. Between 2010 and 2013, the office retailer saw revenue climb only 0.4% from $24.3 billion to $24.4 billion.

In terms of profitability, things were even worse. During this four-year span, Staples has seen its net income fall from $738.7 million to a loss of $210.7 million. Now, in all fairness, the company did book a $1 billion non-cash impairment during the year, so its net income would have risen 33% to $807.3 million excluding the charge. 

Source: Wikimedia Commons

This financial performance has been far better than that of smaller rival Office Depot (ODP 1.82%). You see, over the past four years, the office retailer saw its revenue fall 12% from $12.1 billion to $10.7 billion. Just as in the case of Staples, Office Depot has been negatively affected by a decline in comparable-store sales -- combined with store closings.

Office Depot's revenue decline might lead shareholders to think that a drop in profitability should occur too. Interestingly, this is not the case. Over the four-year time frame, the retailer saw its net loss of $596.5 million narrow to a loss of $77 million. Over this time frame, the business saw greater impairment charges but was aided by costs that fell in relation to revenue.

Source: Wikimedia Commons

Although not a perfect comparable, another business to look at is Best Buy (BBY 0.20%). Between 2010 and 2013, the company saw its revenue fall 15% from $49.7 billion to $42.4 billion. Despite seeing sales rise between 2010 and 2012, the company's top line plummeted in 2013 in both the domestic and international markets.

In response to the decline in revenue, Best Buy's net income fell drastically. Over the past four years, the company's net income declined from $1.3 billion to -$249 million. The company's 2013 results represent a significant improvement over the $1.2 billion loss but are still a sign that management has a lot of work to do if it's to turn the business around.

Foolish takeaway
Based on all of this data, it appears as though office-oriented retailers aren't doing so hot. While it's possible that this could present the Foolish investor with some attractive opportunities, there's no guarantee that any of these businesses will still be around in a few years.

This is especially true when you consider that online sites like Amazon.com are growing rapidly by providing the same products that a Staples, Office Depot, or Best Buy are and does so at a lower price.

However, for the Foolish investor who is adamant about the future of these businesses, the best prospect to explore further is probably Staples. Aside from being a large business, the company is the second-largest online retailer in terms of sales (second only to Amazon). If management can maintain this presence, it's possible that its market power can keep the business alive and thriving in the long term.