Staples Hits Estimates, but GAAP Results Lag Last Year's

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Staples (NAS: SPLS) reported earnings on May 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 28 (Q1), Staples met expectations on both revenue and earnings per share.

Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share dropped.


Gross margin dropped, operating margin expanded, and net margin contracted.

Revenue details
Staples logged revenue of $6.1 billion. The 13 analysts polled by S&P Capital IQ expected a top line of $6.19 billion on the same basis. GAAP-reported sales were 1.1% lower than the prior-year quarter's $6.17 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.30. The 18 earnings estimates compiled by S&P Capital IQ forecast $0.30 per share. GAAP EPS of $0.27 for Q1 were 3.6% lower than the prior-year quarter's $0.28 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.4%, 10 basis points worse than the prior-year quarter. Operating margin was 5.7%, 10 basis points better than the prior-year quarter. Net margin was 3.1%, 10 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $5.75 billion. On the bottom line, the average EPS estimate is $0.23.

Next year's average estimate for revenue is $25.32 billion. The average EPS estimate is $1.49.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 932 members rating the stock outperform and 78 members rating it underperform. Among 303 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 283 give Staples a green thumbs-up, and 20 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Staples is outperform, with an average price target of $17.82.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Staples. Motley Fool newsletter services have recommended buying shares of Staples. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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