Retail store weakness staple for Staples, Inc (NASDAQ:SPLS)
Staples, Inc. (NASDAQ:SPLS) shed 15.29% in Wednesday’s trading session. The company has reported lustreless financial results and has dropped it 2013 earnings guidance. This has been attributed to a dip in its international and retail business. Based on the earnings report, the company’s total sales for the Q2 dipped 2% to $5.3B. This decline was because of the shuttering of 103 different stores in Europe and North America over the last 12 months.
SPLS has an income of $104M from its operations or earnings per share of $0.16 which was lower than the $125m or $0.19 earnings per share that it had in the same quarter last year. The average analyst EPS estimate was $0.18. In the Q2, SPLS had an operating cash flow of $348M and has invested $124M in free cash-flow. This is a rise of $93M from the earlier year. SPLS has also repurchased 6.4M shares worth $100M. It has $2.3B liquidity. This includes $1.2B cash equivalents and cash.
The Staples management axed its earnings and sales outlook for the entire 2013 fiscal year due to the weaker than expected Q2 results. It is expecting a very low single digit drop in 2013 sales on a 52 week basis while the EPS will be in the range of $1.21-$1.25. SPLS has projected that it will generate over $900M in free cash-flow and will continue share buy-backs right through 2013.
The chief executive officer of SPLS, Ron Sargent said that the company has continued to make progress on its strategic plan of reinventing Staples. He said that the company had driven growth aggressively and had also kept a tight rein on expenses in the Q2 but that this progress had been counteracted by dismal results in its international business and retail stores.