Earnings Preview: Staples

Aug.14.12 | About: Staples, Inc. (SPLS)

Staples (NASDAQ:SPLS) is expected to report Q2 earnings before the market open on Wednesday, August 15 with a conference call scheduled for 8:00 am ET.


Analysts are looking for EPS of 22c on revenue of $5.73B. The consensus range is 20c-23c for EPS, and $5.53B-$5.89B for revenue, according to First Call. After reporting lower than expected Q1 EPS, Staples forecast FY EPS up in the high-single digits, consensus $1.43, low single-digit sales growth for the year, consensus $25.26B, and over $1B of free cash flow. The company reaffirmed this view at the Oppenheimer 12th Annual Consumer Conference in June, adding that its cash priorities include investing in the business, maintaining a solid credit rating and returning cash to shareholders via dividends and repurchases. The company said Europe has been a "disappointment" to the company for the last two years and that the environment in Europe continues to be "very tough".

Analyst Views

Recent channel checks by Cleveland Research indicate Staples' sales trends moderated further in July and the firm sees continued risk to FY13 earnings. During the quarter, Staples was downgrade to Neutral from Buy at UBS, which cited the slowing economy and lack of industry consolidation, and to Market Perform from Outperform at Bernstein, which cited slowing momentum and increasing economic concerns.