As the current advertising campaign from Staples Inc. (NASDAQ: SPLS) makes clear, the nation's largest office supply store operator is hoping for what so many retailers (aside perhaps from those participating in the cash for clunkers program) are hoping for: a boost from back-to-school sales. Unfortunately, any such sales won't affect the second quarter results that Staples is scheduled to report tomorrow morning before the market opens. Those results will include July, though, when retail sales were disappointing all around.
Staples is scheduled to discuss its second quarter 2009 results tomorrow morning in a conference call at 8:00 AM ET. You can catch the live webcast of the call on the company's website.
For the quarter in which Staples declared a dividend of 8.25 cents per share, appointed a new senior vice president of in charge of global strategy, and saw other senior executive changes, analysts surveyed by Thomson Reuters expect the Framingham, Mass.-based company to report that earnings fell 23.8% from a year ago to $0.16 per share. That's also down from better-than-expected $0.22 per share in the first quarter. However, revenue for the second quarter is expected to be 9.1% higher to $5.5 billion. Earnings have been in line with estimates in four of the past five quarters.
Analysts so far expect results in the third quarter (which includes the back-to-school period) to be better sequentially, but still lower than a year ago.
Staples' earnings multiple is a hefty 19x, and its long-term EPS growth forecast is 14.2%, which is better than those of rivals OfficeMax Inc. (NYSE: OMX) and Office Depot Inc. (NYSE: ODP). Net cash flow from operations has been increasing over the past year, and short interest fell in July, but the company reported more long-term debt in its first quarter than in any other quarter in the past year. Yet the First Call consensus recommendation remains to buy SPLS; Zacks expects an upside surprise from Staples.
Shares have risen about 16% in the past three months but are still about 8% lower than a year ago.
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