Staples 2Q results miss Street, cuts forecastsAP , Associated Press
Aug. 21, 2013 7:47 AM ET
FRAMINGHAM, Mass. (AP) — Staples said Wednesday that its net income dropped 15 percent in the second quarter as it closed some stores and dealt with declining traffic and lower sales of computers, ink and toner.
The office supply company's performance missed Wall Street expectations. It also cut its full-year earnings and revenue forecasts Wednesday, citing the weaker-than-expects quarterly results.
Staples Inc. earned $102.5 million, or 16 cents per share, for the period ended Aug. 3. A year earlier it earned $120.4 million, or 18 cents per share.
Analysts, on average, expected higher earnings of 18 cents per share.
Revenue fell 2 percent to $5.31 billion from $5.43 billion, weighed down in part by store closures. The performance was also hindered by declining sales overseas, which were hurt by softness in Europe and Australia.
Wall Street was looking for $5.37 billion in revenue.
The Framingham, Mass., company experienced softer sales of business machines and technology accessories, ink and toner and computers. This was somewhat offset by better sales of tablets, facilities and break-room supplies and copy and print services.
Many companies that offer computers and electronic devices have seen an increasing consumer shift to portable devices like tablets and smartphones and are trying to adjust their inventory to address such changing needs.
Revenue at stores open at least a year, which excludes online sales, slipped 3 percent on lower traffic and a decline in the average order size.
One bright spot was online sales, which climbed 3 percent.
Going forward, Staples now foresees full-year earnings from continuing operations of $1.21 to $1.25 per share. Revenue is expected to decline by a low single-digit percentage rate. Its prior guidance was for earnings of $1.30 to $1.35 per share, with revenue up by a low single-digit percentage rate.
Analysts forecast 2013 earnings of $1.32 per share.