), a leading retailer of office products and services, is slated to
report its second-quarter 2012 financial results on August 15,
2012. The current Zacks Consensus Estimate for the quarter stands
at 22 cents per share (flat when compared with the prior-year
quarter) on revenues of $5.73 billion.
Staples, which competes with
Office Depot Inc
), posted quarterly earnings of 30 cents a share in the first
quarter, in line with the Zacks Consensus Estimate and up 7.1% from
28 cents earned in the prior-year quarter. Including one-time
items, earnings decreased 3.6% year over year to 27 cents.
Staples reported total sales of $6.1 billion, down 1.1% year
over year. Sales marginally missed the Zacks Consensus Estimate of
Management expects sales to increase in the low single digits in
fiscal 2012, while the bottom line is expected to augment in the
high single digits.
Agreement of Estimate Revisions
Over the past 30 days, 4 out of 14 estimates have been revised
downwards, while none were raised for the second quarter. Moreover,
for fiscal 2012, 5 out of 16 estimates have been revised in the
downward direction, while none moved in the opposite
The analysts believe that the challenging macro economic outlook
continues to remain a drag on the company's results as the sector's
performance is closely related to the health of the economy.
Further, Staples' significant exposure to the European market
remains a matter of concern.
Magnitude of Estimate Revisions
Given the downward estimate revisions, the Zacks Consensus
Estimate for fiscal 2012 came down by a couple of cents to $1.47 in
the last 30 days. The Zacks Consensus Estimate remained stable for
the upcoming quarter.
With respect to earnings surprises, Staples surpassed as well as
met the Zacks Consensus Estimate over the last four quarters in the
range of 0% to 10%. The average remained at 10%, indicating that
the company has outperformed the Zacks Consensus Estimate
consistently over the trailing four quarters.
Being a leading retailer of office products and services,
Staples is better positioned than its competitors to sustain growth
based on its margin expansion, effective merchandising, and growth
prospects across its retail, delivery and international
However, we remain concerned regarding the company's
International segment, which is suffering from declining sales.
Currently, we have a long-term "Neutral" recommendation on the
stock. Moreover, Staples holds a Zacks #3 Rank that translates into
a short-term "Hold" rating.
OFFICE DEPOT (ODP): Free Stock Analysis Report
OFFICEMAX INC (OMX): Free Stock Analysis Report
STAPLES INC (SPLS): Free Stock Analysis Report
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