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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
KeeneOnTheMarket.com
20 Sep 14 11:39:03
@jimcramer talking a merger in $ODP and $SPLS and we have seen HUGE Unusual Options Activity in it, No position on
David G.
19 Sep 14 16:31:53
Will $SPLS stop @ trndline or form a mthly W? #investing #nasdaq #stockmarket #stocks #finance #wallstreet #trading http://t.co/Iq5LdGatid
Reid G
19 Sep 14 15:33:32
$ODP up after hours on Cramer mentioning it as buyout target by $SPLS- "80% premium would be great deal for Staples"
12Stocks.com
19 Sep 14 08:52:21
S&P500 #Stocks Performance $COL $CCL $NI $ATI $AMZN $CRM $VRTX $DRI $HD $ZION $APD $LYB $SPLS $PRU $HCBK more@ http://t.co/RPeaHBZz9y
12Stocks.com
19 Sep 14 08:51:48
Nasdaq100 #Stocks Performance $LBTYA $AMZN $VRTX $SPLS $BIIB $LINTA $YHOO $ILMN $CELG $TRIP $AMGN $EQIX more@ http://t.co/YdSIjG11yN
Fish4Bucks
19 Sep 14 06:44:13
60m $SPLS Upper Trendline Pressure 13.240 #futures #stocks 09:44:01 AM http://t.co/WZwETG8am0 Signals based... http://t.co/WZwETG8am0
Fish4Bucks
19 Sep 14 06:29:53
60m $SPLS 13.080 Price action Crossing up Median Resistance #stocks Signals based on the Fish4Bot indicator ... http://t.co/WZwETG8am0
Stock Rocket
19 Sep 14 03:58:48
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SPLS $LLTC $AVGO
12Stocks.com
19 Sep 14 03:02:09
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18 Sep 14 22:41:42
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AAAMP Value Blog
18 Sep 14 18:33:45
RT @KenFaulkenberry: $SPLS Staples, Inc. Announces Second Quarter 2014 Performance http://t.co/W48UBwBvBc (#SPLS is an AAAMP dividend growt…
Ken Faulkenberry
18 Sep 14 17:55:28
$SPLS Staples, Inc. Announces Second Quarter 2014 Performance http://t.co/W48UBwBvBc (#SPLS is an AAAMP dividend growth position)
Consestimate
18 Sep 14 13:59:39
US STOCKS-Consumer staples edge higher on ConAgra boost. $SPLS. http://t.co/RIYlsOlcrM
Daily Contracts
18 Sep 14 11:49:01
Real-Time feed of company contracts, original agreements and executive updates from Staples Inc. $SPLS http://t.co/XHDtnc4Qzi
ModernGraham
18 Sep 14 11:02:53
Staples Inc. Annual Stock Valuation – 2014 $SPLS http://t.co/pCHtNMjqoQ
Daily Contracts
18 Sep 14 10:11:02
Real-Time feed of company contracts, original agreements and executive updates from Staples Inc. $SPLS http://t.co/XHDtnc4Qzi
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18 Sep 14 09:21:34
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/h5N34SPJ6o $SPLS $LLTC $AVGO
4-traders.com
18 Sep 14 07:10:02
Staples : and Katy Perry Make Roar Happen with $2.5 Million to Support Teachers and Students http://t.co/QXHvgT5Bgr $SPLS
BV Services
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$SPLS Staples and Katy Perry “Make Roar Happen” for Los Angeles Music Teachers.. http://t.co/Ek1x9dnev8
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18 Sep 14 07:07:29
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18 Sep 14 07:07:05
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18 Sep 14 07:07:04
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NASDAQ
18 Sep 14 07:07:02
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4-traders.com
18 Sep 14 07:05:08
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18 Sep 14 07:04:53
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Pzaa...Guy
18 Sep 14 07:04:44
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NASDAQ
18 Sep 14 07:04:32
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18 Sep 14 07:03:36
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Pzaa...Guy
18 Sep 14 07:02:43
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VisualStock Resource
18 Sep 14 07:02:41
$SPLS - Staples and Katy Perry Make Roar Happen with $2.5 Million to Support Teachers and Students http://t.co/0FokSrG77K
NASDAQ
18 Sep 14 07:02:39
$SPLS - Staples and Katy Perry Make Roar Happen with $2.5 Million to Support Teachers and Students http://t.co/fWz3FgUnHO
BV Services
18 Sep 14 07:01:08
$SPLS Staples and Katy Perry Make Roar Happen with $2.5 Million to Support Teachers and Students.. http://t.co/xvu8eYoT4O
Holden
18 Sep 14 06:57:56
STC $SPLS ITM calls for a little more than +5%. Still long $ODP, but that money can be used better elsewhere.
US Banking News
18 Sep 14 06:37:05
Staples Gets Average Rating of Hold from Analysts $SPLS http://t.co/EqC5U44fro
12Stocks.com
18 Sep 14 04:40:06
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12Stocks.com
18 Sep 14 04:39:32
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4-traders.com
18 Sep 14 04:25:07
Staples : Governor McAuliffe Announces Eight 2015 Virginia Regional Teachers of the Year http://t.co/HsnZZYAosw $SPLS
4-traders.com
18 Sep 14 04:05:13
Staples' : 'Know Your Type' survey focused on identifying workplace personalities, ink and toner purchasing... http://t.co/hVuLJbFDrs $SPLS
Stock Rocket
18 Sep 14 01:08:48
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SPLS $LLTC $AVGO
Stock Rocket
17 Sep 14 20:59:33
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chartguy89
17 Sep 14 20:22:05
SPLS 13.04 Stock Charts $SPLS Staples Inc. (NASDAQ) Last Updated: 09/17/2014 22:22:12 SPLS Stock Chart - 1 Mon http://t.co/AhgBbTZiz5
InterCooler
17 Sep 14 15:27:01
Staples Target of Unusually Large Options Trading $SPLS http://t.co/rCb3XCNHcz
US Banking News
17 Sep 14 15:05:13
Staples Target of Unusually Large Options Trading $SPLS http://t.co/PrAMjEDS2v
Ticker Report
17 Sep 14 15:02:20
Staples Target of Unusually Large Options Trading $SPLS http://t.co/6OMw3f8uUF
Stock Rocket
17 Sep 14 14:08:41
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/h5N34SPJ6o $SPLS $LLTC $AVGO
Consestimate
17 Sep 14 10:17:02
3 Reasons Staples' Stock Could Fall (SPLS) . $SPLS. http://t.co/S573lBssLw
12Stocks.com
17 Sep 14 08:53:38
Nasdaq100 #Stocks Trend $XLNX $ALTR $MAR $FFIV $CHTR $KLAC $SPLS $MNST $NTAP $REGN $SNDK $ADSK $CSCO $GMCR @ http://t.co/YdSIjG11yN
StockOptionAlert
17 Sep 14 06:54:19
$SPLS moving again this morning and breaking out. 10k Sep 13 puts traded looks like a sell to open move at .05 bid.
Fish4Bucks
17 Sep 14 06:30:51
60m $SPLS Upper Trendline Pressure 13.110 #futures #stocks 09:30:32 AM http://t.co/WZwETG8am0 Signals based... http://t.co/WZwETG8am0
Jean
17 Sep 14 05:24:48
A Lasting Mark: Space Pens and the Workers Who Make Them http://t.co/BqEIzRBFIY via @daily_finance $SPLS
				
				
By  +Follow August 21, 2013 11:06AM
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