Staples (NASDAQ: SPLS), a seller of office supplies and a competitor of chains such as Office Depot (NYSE: ODP), OfficeMax (NYSE: OMX), and Wal-Mart (NYSE: WMT), reported Q2 earnings on Tuesday. Although they weren't that great, I can't say I felt they were a total disaster, either. I think the quarter was lackluster and indicative of the immense work ahead for management in terms of getting people into their stores and increasing sales per transaction.

According to the press release, total sales increased 9% and adjusted earnings per share declined 24% to 16 cents. That's a steep drop, but they did match analyst expectations. Staples used the increase it saw in free cash flow in a smart way: debt reduction. I approve of that move, to be sure.

Continue reading Staples' earnings drop, but meet expectations

Staples' earnings drop, but meet expectations originally appeared on BloggingStocks on Wed, 26 Aug 2009 09:30:00 EST. Please see our terms for use of feeds.

Staples (NASDAQ: SPLS) issued its Q1 report on Wednesday. Call me unimpressed. It beat earnings estimates by a penny, coming in at 22 cents on an adjusted basis. Sure, that's what investors want to see. They want the bottom line to go beyond expectations.

But there isn't a lot of excitement to be had with the Staples story. According to the press release, that 22-cent figure represented a decline of 27% in per-share profit. Furthermore, there's weakness in terms of same-store sales. In the North American market, comps dipped 8%. On the international front, comps went down by 14% in Europe.

Continue reading Staples beats analysts in Q1, but tough economy causes decline in comps

Staples beats analysts in Q1, but tough economy causes decline in comps originally appeared on BloggingStocks on Thu, 28 May 2009 08:40:00 EST. Please see our terms for use of feeds.

While less foot traffic and lower sales dragged down Staples Inc.'s (NASDAQ: SPLS) second-quarter profit, mining equipment maker Joy Global Inc.'s (NASDAQ: JOYG) fiscal third-quarter profit soared on strong demand for its products and services.

Staples, the world's largest office supply company, reported Wednesday that it earned $150.2 million, or 21 cents per share, down 16% from its year-ago profit. Sales jumped 18% to $5.07 billion, though same-store sales fell 7% in North America. Results were boosted by the acquisition of Dutch supply chain Corporate Express NV.

Analysts polled by Thomson Reuters had expected a profit of 21 cents per share on revenue of $4.69 billion.

Because of the slowing economy, the Framingham, Mass.-based company also forecast low single-digit earnings per share growth for the full year

Staples shares rose 41 cents, or 1.7%, Wednesday to $25.18. Shares are up 9.2% year to date.

Continue reading Staples rises despite profit slip, Joy Global tumbles on profit surge

Staples rises despite profit slip, Joy Global tumbles on profit surge originally appeared on BloggingStocks on Wed, 03 Sep 2008 17:45:00 EST. Please see our terms for use of feeds.

Staples (NASDAQ: SPLS) shares are falling today after the European Commission approved SPLS's $2.7 billion acquisition of Dutch office supply company Corporate Express NV. The transaction has already received regulatory approval in the U.S. and Canada. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SPLS.

After hitting a one-year low of $19.69 in November, the stock hit a one-year high of $25.85 on Monday. This morning, SPLS opened at $24.76. So far today the stock has hit a low of $24.44 and a high of $24.98. As of 11:00, SPLS is trading at $24.54, down $0.57 (-2.3%). The chart for SPLS looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $27.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in three months as long as SPLS is below $27.50 at September expiration. Staples would have to rise by more than 11% before we would start to lose money. Learn more about this type of trade here.

Continue reading Staples (SPLS) buyout of Corporate Express approved by EU

Staples (SPLS) buyout of Corporate Express approved by EU originally appeared on BloggingStocks on Wed, 18 Jun 2008 13:37:00 EST. Please see our terms for use of feeds.

After some tough fighting, Staples, Inc. (NASDAQ: SPLS) has won its bid for Corporate Express N.V., one of the world's largest suppliers of office products to businesses and institutions. The deal comes to about $2.6 billion in an all cash transaction. What's more, Corporate Express has agreed to abandon its purchase of rival Lyreco (which was really a defensive ploy anyway).

To get to this point, Staples had to increase its bid several times, from 7.25 euros to 9.25 euros. But, it was probably worth it. After all, the core retail business is lagging.

Basically, Corporate Express will provide a strong distribution platform in North America, Canada and Europe. Moreover, the business is growing and there should be some cost savings because of overlap and economies of scale, although these haven't been estimated yet.

Continue reading Staples catches its prey for $2.6 billion

Staples catches its prey for $2.6 billion originally appeared on BloggingStocks on Wed, 11 Jun 2008 11:36:00 EST. Please see our terms for use of feeds.

Staples offers to buy Corporate Express; offer rebuffed originally appeared on BloggingStocks on Wed, 20 Feb 2008 10:10:00 EST. Please see our terms for use of feeds.

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