Staples (SPLS) on sale here... Imagine that weak Europe Demand.
Earnings are still growing and Current PE is 10.5 with 3% yield,
Staples international sales fall on weak Europe demand
Wed May 16, 2012 9:23am EDT
* Q1 adj EPS $0.30 vs est $0.30
* Q1 revenue $6.10 bln vs est $6.18 bln
* Outlook for 2012 unchanged
* Shares down 4 pct in premarket trading
May 16 (Reuters) - Staples Inc, the largest U.S. office supply chain, said sales at its international business fell for the third straight quarter, as demand in Europe remains weak, sending its shares down 4 percent in premarket trading.
Sales at Staples' international business, which makes up about 20 percent of the company's revenue, fell 8 percent, as same-store sales in Europe declined 6 percent.
The company -- which operates in 26 countries in North and South America, Europe and Asia -- kept its 2012 outlook, as a slow recovery in the U.S. economy is also curtailing sales growth.
"The international business continues to flounder, but that really does not come as a surprise," UBS analyst Michael Lasser wrote in a client note.
Staples has cut costs as sales in Europe and some other international markets show no signs of recovering.
JPMorgan analysts said they were encouraged by the company's cost-cutting efforts.
"It is only a first step on the path of acknowledging the issues facing the business," JPMorgan analysts said in a note.
The company's smaller rivals, OfficeMax Inc and Office Depot Inc, have also been reducing costs to boost profits.
First-quarter net income fell to $187.1 million, or 27 cents per share, from $198.2 million, or 28 cents per share, a year ago.
Excluding items, the company earned 30 cents per share, meeting analysts' expectations, according to Thomson Reuters I/B/E/S.
Total sales fell marginally to $6.1 billion, missing analysts' expectations of $6.18 billion.
For the full year, Staples said it expects sales to rise in the low single-digits, with earnings per share increasing in the high single-digits from $1.37 last year.
Staples shares fell 4 percent to $14.20 in premarket trading on Wednesday. They closed at $14.75 on Tuesday on the Nasdaq. |
