Staples profit jumps but shares fall
|
|
|
By Justin GrantNEW YORK (Reuters) - Staples Inc. , the world's largest office supplies retailer, on Tuesday reported first-quarter sales that fell short of analysts' estimates and gave a cautious outlook for the remainder of the year, sending its shares down more than 5 percent."We understand that our choppy top-line results in North American retail for (the first quarter) are likely to cause concern about what we are seeing in the economy," Chief Executive Ron Sargent said on a conference call."The consumer and the very small business customer who are important components of our retail business are feeling pressure."The company said quarterly profit rose 12.4 percent, meeting Wall Street's expectations, driven by higher sales of laptop computers and continued growth in its copy and print service businesses.Net income increased to $209 million, or 29 cents a share, from $186 million, or 25 cents, a year earlier.The Framingham, Massachusetts-based company said quarterly sales rose 8 percent to $4.59 billion from $4.24 billion a year ago.Analysts, on average, expected the retailer to earn 29 cents a share on $4.7 billion in sales, according to Reuters Estimates."The softish results and tempered outlook that Staples announced this morning reflect a more challenging environment for the company's retail division," UBS retail analyst Brian Nagel wrote in a research note."We believe that the recent move down in (Staples) shares should largely discount for today's news from the company," wrote Nagel, who has a "neutral" rating on Staples stock.Comparable sales at its North American division rose 1 percent. But the company said sales of its core office supplies were flat, adding that sales of furniture and business machines were weak.Total North American retail sales rose 3 percent.Staples said it was taking a "cautious" approach regarding expectations for the rest of the year because a "softer-than-expected" sales environment at its North American retail business during the first quarter.Sanford Bernstein analyst Colin McGranahan lauded Staples' performance amid a rough retail atmosphere."While the tempered guidance reflects a weaker environment, we believe first-quarter results reflect (Staples') ability to execute well in a tough environment," McGranahan wrote in a research note."And while the company guided to the low end of its forecast, the share's recent underperformance suggests the stock may have already been discounting the more cautious outlook," wrote McGranahan, who has an "outperform" rating on the stock.Looking ahead, the company expects 15 percent to 20 percent earnings growth for the second quarter and full year, and sees earnings at the low end of its forecast of $1.43 to $1.49 per share for fiscal 2007.The company also said it expects double-digit total sales growth for the second quarter and full year.At its North American retail division, Staples expects low single-digit comparable-sales growth for the second quarter and full year.Earlier this month, rival OfficeMax Inc. , the world's third-largest office supplies retailer, posted a lower-than-expected quarterly profit.Staples also announced it acquired privately held American Identity, a global distributor of corporate branded products.Staples shares were trading down about 4 percent at $24.61 on the Nasdaq.
(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Five more US bank failures bring total for 2009 to 120
New York - Bank failures in the United States have risen to 120 this year as five more regional institutions were added to the list, the US agency that guarantees the safety of bank deposits said. United Commercial Bank in San Francisco with assets o...
US stocks climb slightly despite double-digit jobless rate
New York - US stocks posted mild gains Friday to end the week as investors shrugged off government figures that put the unemployment rate above 10 per cent. The Labour Department said the jobless rate hit 10.2 per cent in the month of October, the hi...
US joblessness hits 10.2 per cent, highest in 26 years - Summary
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years as another 190,000 people lost their jobs, the Labour Department reported Friday. The figure comes after a 9.8-per-cent jobless rate in September and wa...
US joblessness jumps to 10.2 per cent, highest since 1983 - Update
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years, as another 190,000 people lost their jobs during the month, the US reported Friday. The figure reported by US Labour Department came after the 9.8 per ...
US jobless rate jumps to 10.2 per cent
Washington - The US unemployment rate surged to 10.2 per cent in October as another 190,000 people lost their jobs, according to US Labour Department figures released Friday. The jobless rate stood at 9.8 per cent in September. Unemployment had been ...
Bulls stop James, edge Cavs - Summary
Los Angeles - The King couldn't deliver in the clutch. Luol Deng and Joakim Noah combined to deny LeBron James a potential game-winning drive in the final seconds as and the visiting Chicago Bulls snapped the Cleveland Cavaliers' three-game winning...
Mortgage lender Fannie Mae posts nearly 19-billion-dollar loss
Washington - US mortgage lender Fannie Mae said Thursday that it would seek 15 billion dollars in federal aid, after posting its ninth consecutive quarterly loss. Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter of 2009, co...
|
|
|
|
|
|
|
|
