Staples Tumbles on Disappointing Q2, Lower Outlook

Staples Inc. (NASDAQ: SPLS) tumbled in premarket trading after posting disappointing second-quarter results and lowering its full-year guidance.

The retailer reported quarterly earnings of $120.4 million, or $0.18 per share, and $5.5 billion in revenue.  That compares to $0.25 per share and $5.82 billion in the same period a year ago, as well as the Thomson Reuters consensus estimates of $0.22 per share and $5.72 billion.

Staples says it now anticipates a low single-digit percentage rise in its full-year earnings. Analysts expect earnings of $1.47 per share, which would be a 7% increase from the prior-year period. Staples also sees full-year revenue flat year-over-year at $25 billion, compared to a consensus estimate of $25.25 billion.

The company said sales of computers, software and basic office supplies were soft. Traffic at stores slipped 2%, and North American retail sales declined 3% while international sales dropped 18%.

"We're taking a hard look at each of our businesses, and we plan to make significant changes to improve results," said chairman and CEO Ron Sargent. "We're also building a plan to reallocate resources, take advantage of our best growth opportunities, and drive increased cost savings."

Competitor OfficeMax Inc. (NYSE: OMX) reported better-than-expected second-quarter EPS but lower sales, while Office Depot Inc. (NYSE: ODP) posted a wider net loss for the second quarter.

Shares of Staples are down by 12.6% at $11.75 on premarket trading, in a 52-week trading range of $12.10 to $16.93. Thomson Reuters had a consensus analyst price target of $15.43 before this news.


Filed under: 24/7 Wall St. Wire, Earnings, Retail Tagged: ODP, OMX, SPLS
Read Full Story

Markets

DJIA 21,394.76 -2.53 -0.01%
NASDAQ 6,265.25 28.56 0.46%
S&P 500 2,438.30 3.80 0.16%
NIKKEI 225 20,143.96 11.29 0.06%
HANG SENG 25,670.05 -4.48 -0.02%
DAX 12,733.41 -60.59 -0.47%
USD (per EUR) 1.12 0.00 0.00%
USD (per CHF) 0.97 0.00 0.00%
JPY (per USD) 111.31 0.08 0.07%
GBP (per USD) 1.27 0.00 0.00%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.