Staples Earnings: Here’s Why Shares are Crashing 16% Now

S&P 500 (NYSE:SPY) component Staples Inc. (NASDAQ:SPLS) reported its results for the second quarter. Staples operates a chain of retail stores selling office products.

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Staples Inc. Earnings Cheat Sheet

Results: Net income for Staples Inc. fell to $120.4 million (18 cents per share) vs. $176.4 million (25 cents per share) a year earlier. This is a decline of 31.7% from the year-earlier quarter.

Revenue: Fell 5.5% to $5.5 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Staples Inc. fell short of the mean analyst estimate of 22 cents per share. It fell short of the average revenue estimate of $6.19 billion.

Quoting Management: “Our second quarter results fell short of our expectations due to softer than expected sales trends in North America and ongoing weakness in Europe and Australia,” said Ron Sargent, Staples’ chairman and chief executive officer.

Key Stats:

The company’s net income has fallen in each of the last two quarters. In the first quarter, net income fell 5.6% from the year-earlier quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 30 cents.

Revenue has declined for two quarters in a row. In the first quarter, revenue declined 1.1% to $6.1 billion from the year-earlier quarter.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the third quarter is 49 cents per share, a drop from 50 cents. The average estimate for the fiscal year is $1.48 per share, down from $1.50 ninety days ago.

Competitors to Watch: OfficeMax Incorporated, Office Depot, Inc., China Stationery and Office Supply, Inc., Inc., United Stationers Inc., Paper Warehouse Inc., Papelaria Fernandes – Indust. e Comer.SA, and Tiimari Oyj.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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