The 10-second takeaway
For the quarter ended May 4 (Q1), Staples met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped. GAAP earnings per share dropped.
Margins contracted across the board.
Staples logged revenue of $5.81 billion. The 13 analysts polled by S&P Capital IQ predicted a top line of $5.90 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.26. The 17 earnings estimates compiled by S&P Capital IQ averaged $0.27 per share. GAAP EPS of $0.26 for Q1 were 3.7% lower than the prior-year quarter's $0.27 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 26.0%, 40 basis points worse than the prior-year quarter. Operating margin was 4.9%, 30 basis points worse than the prior-year quarter. Net margin was 2.9%, 20 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $5.43 billion. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $23.83 billion. The average EPS estimate is $1.34.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 904 members out of 1,001 rating the stock outperform, and 97 members rating it underperform. Among 312 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 287 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 $13.39.
Is Staples the right retailer for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. Click here for instant access to this free report.
- Add Staples to My Watchlist.
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. 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.