Retail

Staples Earnings View: The Turnaround Is Alive

Staples Inc. (NASDAQ: SPLS) reported its third-quarter results Wednesday before the market open as $0.37 in earnings per share and $6.0 billion in revenue. That was against Thomson Reuters consensus estimates of $0.36 in earnings per share and $5.93 billion in revenue. In the third quarter of the previous year, Staples posted $0.42 in earnings per share and $6.11 billion in revenue.

The company gave guidance for the fourth quarter as $0.27 to $0.32 in earnings per share, and the company expects to generate over $800 million in free cash flow. The consensus estimates for the fourth quarter are $0.31 in earnings per share and revenue of $5.73 billion.

Net income from the third quarter was $236 million, compared to $274 million in the same period of the previous year.

Staples segments reported:

  • North American Commercial segment grew by 3%, or by 4% on a local currency basis.
  • Staples.com grew its sales by 9%, or by 10% on a local currency basis.
  • North American copy and print sales grew by high single digits in comparable stores and double digits in both Staples.com and Contract.

The company has generated over $700 million of free cash flow year-to-date. Staples closed 127 stores in North America since the beginning of the year. However, Staples expects to close approximately 170 stores in North America during 2014.

ALSO READ: 7 Analyst Stock Picks Under $10 With Massive Upside Calls

Ron Sargent, chairman and CEO of Staples, said:

We’re building momentum as we reinvent Staples. During the third quarter, we accelerated growth in our delivery businesses, gained traction in categories beyond office supplies, and changed the way we work to drive cost savings.

Back in early August, Credit Suisse upgraded Staples to an Outperform rating from Neutral and raised its price target to $15 from $11.

Shares of Staples closed Tuesday down over 1% at $12.76. Following the release of the earnings report, the initial response in the premarket was positive and shares were up over 4% at $13.30.

The stock has a consensus analyst price target of $11.48 and a 52-week trading range of $10.70 to $16.21. Staples has a market cap of about $8 billion.

Credit Card Companies Are Doing Something Nuts

Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.

It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.

We’ve assembled some of the best credit cards for users today.  Don’t miss these offers because they won’t be this good forever.

 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.