Staples, Inc. Issues Tepid Forecast Amid Mixed Q1 Results

Written by StockNews.com

Staples, Inc. (Nasdaq: SPLS) early Tuesday posted mixed first quarter earnings results and provided a tepid outlook for the current period.

The Framingham, MA-based office supplies retailer reported Q1:

• earnings per share (EPS) of $0.17, which was in-line with the Wall Street consensus estimate of $0.17 [while]
• revenues fell 4.9% from last year to $4.15 billion, badly missing analysts’ view for $4.5 billion...
• Same-store sales (comps) fell 3% in the latest period, as Staples’ brick-and-mortar business continued to decline. Comps are considered a key indicator of a retailer’s health since they measure the year-over-year performance of stores open at least 12 months.

Looking ahead, SPLS:

• forecast Q2 EPS of $0.10 to $0.13, which could miss Wall Street’s consensus view of $0.13 and
• expects to generate at least $500 million of free cash flow for the full year 2017, while it remains on track to close approximately 70 stores in North America this year.

Shira Goodman, Staples’ Chief Executive Officer, commented via press release:

“2017 is off to a good start and, consistent with our strategy, we drove solid sales growth in the midmarket and improved profitability in North American Retail during the first quarter.

Based on our success growing categories beyond office supplies, we’re intensifying our focus on several key growth categories including facilities supplies, breakroom supplies, furniture, technology solutions, and promotional products, or what we now refer to as ‘Pro Categories’.

We’re pursuing this opportunity from a position of strength as we bring together the products, services, and expertise to provide a differentiated offering to business customers of all sizes.”

Year-to-date, SPLS has gained 4.43%, versus a 7.97% rise in the benchmark S&P 500 index during the same period.

SPLS currently has a StockNews.com POWR Rating of B (Buy) and is ranked #9 of 35 stocks in the Specialty Retailers category.