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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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Staples. Motley Fool newsletter services recommend Staples. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.