Staples results miss estimates on overseas weakness

Wed May 22, 2013 8:29am EDT
 
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By Dhanya Skariachan

(Reuters) - Staples Inc (SPLS.O: Quote) missed analyst estimates for profit and sales in the first quarter, hurt by a stronger dollar and weak sales in Europe and Australia.

The lackluster numbers from the largest U.S. office supply chain came after rivals Office Depot Inc ODP.N and OfficeMax Inc OMX.N also reported weaker-than-expected results.

Office supply retailers, often seen as a barometer of economic health, have suffered as demand for their products fell after the recent U.S. recession and during the economic crisis in Europe.

They also face strong competition from Amazon.com Inc (AMZN.O: Quote) and Wal-Mart Stores Inc (WMT.N: Quote) in selling everything from pens and notebooks to furniture.

Staples' income from continuing operations fell to $170.4 million, or 26 cents a share, in the first quarter ended on May 4 from $192.9 million, or 28 cents a share, a year earlier.

Analysts on average were looking for a profit of 27 cents a share on that basis, according to Thomson Reuters I/B/E/S.

Sales fell 3.5 percent to $5.81 billion, while analysts on average expected $5.91 billion. International sales fell 13 percent.

In addition to weak demand in some overseas markets, Staples was also hurt by a stronger dollar, which brings down the value of goods exported by U.S. companies.

For the full year, Staples said it continued to expect sales to rise at a percentage rate in the low single digits, with earnings from continuing operations at $1.30 to $1.35 a share.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn and Chizu Nomiyama)

 
A family leaves the Staples store in Broomfield, Colorado August 17, 2011 as the back-to-school shopping season begins. REUTERS/Rick Wilking