Staples Profit Up 5% but Shy of Estimates

FRAMINGHAM, Massachusetts (TheStreet) -- Staples (SPLS) said fiscal first-quarter earnings rose 5% but the per-share figure of 28 cents a share came in below analysts' estimates.

Staples earned $198.2 million, or 28 cents a share, compared with $188.8 million, or 26 cents a share, a year earlier.

The office-products retailer said first-quarter sales rose 2% to $6.17 billion.

Analysts surveyed by Thomson Reuters expected Staples to earn 32 cents a share on sales of $6.195 billion.

"Our first-quarter results show that we're making good progress on our key growth initiatives and we're gaining share in North America, but at a cost to our bottom line," said Ron Sargent, Staples' chairman and CEO, in a statement Wednesday.

Staples said it's adopting a more conservative sales and earnings outlook. "Current expectations for 2011 assume very little improvement in the economy, continued investment in our growth initiatives and competitive pricing in the Contract market," the company said.

For the second quarter, Staples expects sales to be flat to slightly positive compared with the same period a year earlier, and sees GAAP earnings of 18 cents to 20 cents a share.

Staples said it expects fiscal-year sales to increase in the low single-digits and earnings of $1.35 to $1.45 a share. It previously expected earnings of $1.50 to $1.60 a share.

Analysts expect second-quarter earnings of 26 cents a share and full-year earnings of $1.53.

-- Written by Joseph Woelfel



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