Staples Earnings: Profit Falls, Snapping Streak of Rising Profits

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

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Staples Earnings Cheat Sheet for the First Quarter

Results: Net income for the retail-miscellaneous fell to $187.1 million (27 cents per share) vs. $198.2 million (28 cents per share) a year earlier. This is a decline of 5.6% from the year-earlier quarter.

Revenue: Fell 1.1% to $6.1 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Staples Inc. fell short of the mean analyst estimate of 30 cents per share. Analysts were expecting revenue of $6.19 billion.

Quoting Management: “In North America we continue to build momentum in categories beyond office supplies while trends in our international business remain soft,” said Ron Sargent, Staples’ chairman and chief executive officer. “Our plans remain on track to grow both sales and earnings during 2012.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 3.2% from the year earlier, while the figure increased 13.1% in the third quarter of the last fiscal year, 36% in the second quarter of the last fiscal year and 5% in the first quarter of the last fiscal year.

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 5.2%.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 41 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is 23 cents per share, down from 24 cents ninety days ago. For the fiscal year, the average estimate has moved up from $1.49 a share to $1.50 over the last sixty days.

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

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