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Staples Stumbles in Q2, Slashes Guidance for 2013

By  +Follow August 21, 2013 11:06AM
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Shares of Staples Inc. (SPLS) are taking heat in morning trading on Wednesday after the U.S.’s largest office supply chain came up short on profits and sales in the second quarter, prompting the company to slash its guidance for the full year.

For the quarter ended August 3, Framingham, Massachusetts-based Staples reported revenue of $5.31 billion, down 2.2 percent from $5.43 billion in the second quarter last year.  Profits fell to $102.53 million, or 16 cents per share, from $120.43 million, or 19 cents per share, in last year’s quarter.

Wall Street was expecting earnings of 18 cents per share on revenue of $5.37 billion.

The company said that sales were negatively impacted one percent because of closing 103 stores in North America and Europe over the past year.  Soft sales overseas, especially in Europe and Australia, were an anchor on revenue.   International sales fell 8.3 percent compared to Q2 2012 to $946 million.

Tablet sales were up, along with facilities and breakroom supplies, and copy and print services.  Counterbalancing those gains were shrinking sales of business machines, computers, ink and toner.  Shrinking computer sales and increasing tablet sales is common occurrence in recent years, with retailers trying to shift inventory to meet demand in a competitive arena.

Same-store sales, a key growth metric, fell 3 percent as fewer customers came in Staples' stores and those that did spent less per order.  Online sales, a rare bright spot in the release, rose 3 percent compared to last year’s quarter.  Another bright spot was 2.3-percent growth in Staple’s North American commercial business, which sells directly to businesses.

Total operating expenses were trimmed from $1.19 million last year to $1.17 million.

Lower product margins and cost associated with growth initiatives contributed to operating income decreasing 118 basis points to 4.12 percent compared to last year’s quarter.  Gross margin tightened from 26.1 percent to 25.6 percent.

“We continue to make progress on our strategic plan to reinvent Staples.  We drove online sales growth and aggressively managed expenses during the second quarter, but this progress was offset by weakness in our retail stores and international businesses,” said Ron Sargent, chairman and chief executive at Staples.

During the second quarter, the company bought-back 6.4 million shares for an aggregate amount of $100 million.

Looking ahead, Staples cited the declines in the past three months as reason for chopping its sales and profit outlooks for the full 2013 year.  The company now sees a low single-digit decline in sales versus last year, compared to a previously guided low single-digit profit.  Full year earnings are expected in the range of $1.21 to $1.25 per share, down from between $1.30 and $1.35 per share that was stated last quarter.

Shares of SPLS were having a pretty good year through Tuesday’s close at $16.84, advancing almost 50 percent in 2013.  Today’s report carved into those gains with the stock shedding more than 12 percent in morning action to $14.75.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for SPLS
Steven
2 Sep 14 09:38:59
@BenMA7 my $SPLS stock rose 91¢ (at the current moment) because so analyst said staples and Office Depot should merge http://t.co/gAOYimukra
Media Sentiment
2 Sep 14 09:35:09
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 277
4-traders.com
2 Sep 14 09:35:05
S&P 500 Movers: WYNN, SPLS http://t.co/Iu2Fzjm0aU $WYNN $SPLS $THC $REGN
stt2318
2 Sep 14 09:34:32
$SPLS nice breakout today.. updated chart http://t.co/fjeClQHOck
4-traders.com
2 Sep 14 09:30:03
Nasdaq 100 Movers: WYNN, SPLS http://t.co/x5M2cVm9Z8 $WYNN $SPLS $SNDK $REGN
Blue Horseshoe
2 Sep 14 09:28:39
@CloudChipotle @BrattleStCap $SPLS $ODP would go from 3 large competitors down to 1, seems very unlikely.
Blue Horseshoe
2 Sep 14 09:25:49
@BrattleStCap ...bales them out with allowing them to buy $ODP. $SPLS
Blue Horseshoe
2 Sep 14 09:25:33
@BrattleStCap oh ok, Retail sales only held up by expansion into "noncore" categories. Not going to end well for $SPLS unless FTC...
Fish4Bucks
2 Sep 14 09:23:16
60m $SPLS Upper Trendline Pressure 12.585 #futures #stocks 12:19:05 PM http://t.co/WZwETG8am0 Signals based... http://t.co/WZwETG8am0
FastMoneyLydia
2 Sep 14 09:22:35
Pzena says $SPLS could be a $20 stock once retail sales stabilize or they get the retail footprint to the right size. (He Owns)
Blue Horseshoe
2 Sep 14 09:22:07
@BrattleStCap Credit Suisse speculating $SPLS acquiring $ODP has it going today.
Brattle St. Capital
2 Sep 14 09:21:32
Don't understand how people can pitch $SPLS being at "trough valuations" when the game has changed w/ no guarantee of mean reversion anymore
Vaulty Boy
2 Sep 14 09:19:08
$SPLS volume is coming in.. lets see
Anthony
2 Sep 14 09:16:59
RT @OptionAlert: Unusually heavy option volume on today's open include $HRB, $MPC, $SPLS, $UA, and $STZ.
Anthony
2 Sep 14 09:16:51
RT @OptionAlert: Notable gainers among liquid option names this morning include $SPLS (+6.4%), $REGN (+4.5%), $UA (+3.2%), $AVGO (+3.0%), a…
Anthony
2 Sep 14 09:15:15
RT @WallStJesus: TODAY'S UNUSUAL CALL BUYING: $UA $SPLS $VOD
Anthony
2 Sep 14 09:14:53
RT @WallStJesus: $SPLS mentioned earlier, seeing more STEAM again today. Running 4x usual
Anthony
2 Sep 14 09:14:26
RT @WallStJesus: 🔥 HIGH CALL VOLUME »» $UGI 1576% $NVS 1468% $SPLS 660% $ASML 615% $CPWR 397% $MPC 392% $ALK 361% $DOW 325%
Cory Huddleston
2 Sep 14 09:08:53
$ODP $SPLS merger possibility ?
JE$US
2 Sep 14 09:04:30
🔥 HIGH CALL VOLUME »» $UGI 1576% $NVS 1468% $SPLS 660% $ASML 615% $CPWR 397% $MPC 392% $ALK 361% $DOW 325%
Stock Signaling
2 Sep 14 09:01:12
Movers and Shakers: Making Range Advances: $FCEL $GGB $LUV $ISNS $ARWR $TSL $LNG $TSLA $PANW $SPLS $VOD $BIDU $TWTR $BBRY $ACI #daytrader
TipRanks
2 Sep 14 09:00:54
2-star analyst Gary Balter from Credit Suisse upgraded rating on $SPLS to BUY. http://t.co/B0gAZJlN6J
Livevol Community
2 Sep 14 09:00:04
HIGH CALL VOLU $UGI 1576% $NVS 1468% $SPLS 660% $ASML 615% $CPWR 397% $MPC 392% $ALK 361% $DOW 325% http://t.co/gwzPxhnztr
Stock Wars
2 Sep 14 09:00:00
U.S. Gainers: $CPWR +12.33%, $NCLH +11.68%, $ACAD +9.76%, $SPLS +7.28%, $CENX +6.81% http://t.co/iKxPnk4TjS #StockWars
Advice on stocks
2 Sep 14 08:58:56
$SPLS will be rising
Sushanth Amin
2 Sep 14 08:54:52
RT @AlertTrade: via #AlertTrade Price Action Alert $SPLS - STAPLES #stocks #intraday http://t.co/VS8RO1bzXJ
12Stocks.com
2 Sep 14 08:53:10
MidCap #Stocks Performance $CPWR $SPLS $FEYE $PANW $UAL $CCK $ZU $SPLK $WDR $TSLA $UA $AVGO $DAL $GRPN more@ http://t.co/tf79gD96D3
12Stocks.com
2 Sep 14 08:52:36
S&P500 #Stocks Performance $SPLS $REGN $DAL $BLL $PWR $DLTR $EXPE $DNB $TMO $GME $GCI $DFS $APH $AMP $R more@ http://t.co/RPeaHBZz9y
Vaulty Boy
2 Sep 14 08:52:30
$SPLS 12.50 o/u now
12Stocks.com
2 Sep 14 08:52:19
Nasdaq100 #Stocks Trend $TSLA $AVGO $NXPI $STX $CHKP $CERN $DTV $NTAP $ATVI $AMAT $YHOO $ALTR $WDC $AMGN $SPLS @ http://t.co/YdSIjG11yN
12Stocks.com
2 Sep 14 08:52:03
Nasdaq100 #Stocks Performance $SPLS $REGN $BIDU $TSLA $AVGO $DLTR $EXPE $YHOO $MNST $FOXA $FB $NXPI $AAPL more@ http://t.co/YdSIjG11yN
Day Trade Alerts
2 Sep 14 08:48:34
via #AlertTrade Price Action Alert $SPLS - STAPLES #stocks #intraday http://t.co/VS8RO1bzXJ
Companies in News
2 Sep 14 08:47:19
$SPLS: Staples, Inc. to Announce Second Quarter 2014 Results on August 20, 2014 http://t.co/L0TtV3TXWq http://t.co/ZwduEwQ8Oj
Long-Short Hedgie
2 Sep 14 08:46:37
#Took #Profit Sep 11 Calls $SPLS... +305%
Evener Investment
2 Sep 14 08:34:14
RT @Benzinga: Credit Suisse Upgrades Staples On Possible Merger With Office Depot $SPLS http://t.co/R4KW4DsLPq
PIT 500
2 Sep 14 08:30:47
Credit Suisse Upgrades Staples On Possible Merger With Office Depot $SPLS http://t.co/nMQY6fpp8P via @benzinga
Media Sentiment
2 Sep 14 08:29:40
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 244
Media Sentiment
2 Sep 14 08:29:34
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 242
Vaulty Boy
2 Sep 14 08:29:26
$SPLS it is time to b/o or b/d .. lets see which direction!
Zubeyr Kamil Açıksar
2 Sep 14 08:28:56
RT @Benzinga: Credit Suisse Upgrades Staples On Possible Merger With Office Depot $SPLS http://t.co/R4KW4DsLPq
Benzinga.com
2 Sep 14 08:28:34
Credit Suisse Upgrades Staples On Possible Merger With Office Depot $SPLS http://t.co/R4KW4DsLPq
Vaulty Boy
2 Sep 14 08:21:16
$SPLS abcding too... 12.50 push.. .hopefully we get to $13
Media Sentiment
2 Sep 14 08:20:55
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 236
Media Sentiment
2 Sep 14 08:20:55
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 235
Media Sentiment
2 Sep 14 08:20:55
$SPLS received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 234
Matt Doiron
2 Sep 14 08:16:24
Not sure why a company goes up 6.5% on news that an investment bank wants them to buy a company but I'll take it $SPLS
Wall Street Pit
2 Sep 14 08:08:11
Notable Upgrades: Apple Inc. (AAPL), Tesla Motors (TSLA), Groupon Inc (GRPN),… - http://t.co/gPiOULk6KU $AAPL $TSLA $GRPN $NOC $SPLS
JE$US
2 Sep 14 08:03:34
$SPLS mentioned earlier, seeing more STEAM again today. Running 4x usual
Option Alert
2 Sep 14 08:01:21
Notable gainers among liquid option names this morning include $SPLS (+6.4%), $REGN (+4.5%), $UA (+3.2%), $AVGO (+3.0%), and $DAL (+2.6%),
Stock Signaling
2 Sep 14 08:01:07
Movers and Shakers: Recently Upgraded: $GPS $STO $HBAN $HK $SPLS $COG $GRPN $SD $ACHN $JCP $AEO $DG $WIN $JPM $TSLA http://t.co/Vtx6dLy0Nw
				
				
By  +Follow August 21, 2013 11:06AM
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