The 10-second takeaway
For the quarter ended Oct. 27 (Q3), Staples met expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Staples booked revenue of $6.35 billion. The 16 analysts polled by S&P Capital IQ anticipated a top line of $6.45 billion on the same basis. GAAP reported sales were 3.3% lower than the prior-year quarter's $6.57 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.46. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.45 per share. GAAP EPS were -$0.89 for Q3 compared to $0.47 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.6%, 30 basis points worse than the prior-year quarter. Operating margin was 7.6%, 50 basis points worse than the prior-year quarter. Net margin was -9.4%, 1,440 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $6.71 billion. On the bottom line, the average EPS estimate is $0.44.
Next year's average estimate for revenue is $24.75 billion. The average EPS estimate is $1.38.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 934 members out of 1,028 rating the stock outperform, and 94 members rating it underperform. Among 306 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 281 give Staples a green thumbs-up, and 25 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Staples is hold, with an average price target of $12.94.
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