There's a chill in the air. The kids just don't seem quite as cheerful these days. Ah, yes, the start of the school year is just around the corner. And just like many kids with butterflies in their stomach, office- and school-supply retailer Staples (NASDAQ:SPLS) is eager to kick things off. Will its second-quarter numbers pass the test? We'll find out tomorrow, but let's see what's expected.

What analysts say:

  • Buy, sell, or waffle? Of the 18 analysts tracking Staples, 14 recommend buying shares in the company, while four think investors should keep the shares they have.
  • Revenue. On average, analysts expect sales to increase 10.8% to $4.3 billion.
  • Earnings. Profits are expected to gain a few pennies, to $0.25 per share, up 13.6% from the previous year's quarter.

What management says:
Last quarter, Staples reported impressive growth and maintained its annual guidance; though it did project earnings would fall in the lower end of its forecast. Presumably unsatisfied with the growth estimate and scared off by the slowing U.S. economy, investors aggressively sold off Staples. I, however, thought the reaction was a bit overblown considering that the company was still growing in the upper teens. Management seemed to agree and got busy securing more shares at what it considered discount prices.

What management does:
Perhaps a look at margins will shed light on why investors want more from Staples. Gross margins appear to be stuck, unchanged for a year. Meanwhile, operating and net margins look no better.

Margin

1/06

4/06

7/06

10/06

2/07

5/07

  Gross

28.5%

28.7%

28.6%

28.6%

28.6%

28.6%

  Operating

8.5%

8.6%

8.4%

8.6%

9%

9%

  Net

4.9%

5%

5.3%

5.6%

5.4%

5.4%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
We've already seen lackluster results from the other office-supply chains. Office Depot (NYSE:ODP) slowed down in its second quarter and OfficeMax (NYSE:OMX) didn't exactly maximize growth. As the largest of the trio, it's now up to Staples to show investors why it's at the head of the class.

That won't be easy, as the company has also slowed lately, particularly in the U.S. market, where it managed just 1% comps growth last quarter. While I don't anticipate that Staples will coast through the quarter with a perfect performance, I do expect it to make steady gains, particularly in the international market. We'll have to see whether that's the case, and whether that's enough to encourage investors to look beyond the U.S. market and stick with Staples.

For more on the performance of office-supply retailers, read:

Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article. The Fool's disclosure policy is gearing up for another 4.0 school year.