NEW YORK - weighed on Staples, Inc. in the first quarter, lower sales than expected, prompting largest office supply retailer in the nation to cut its earnings Outlook throughout the year.
The Framingham, mass., company profit quarterly and revenue has pushed, but falls below Wall Street expectations. These password, combined with disappointing prospects throughout the year and the second quarter, pushed the stock of Staples to a 52-week low Wednesday.
Shares of the dragged chain $3.02 or 15.4%, to close at $16.863.
Staples President and CEO Ron Sargent also indicate during a conference call originally that the company will not open many new stores as expected due to the low demand for retail Office products.
The retailer expects to open approximately 20 new U.S. stores and 10 new Canadian stores, while closing 10 stores. This will give Staples 20 new stores in America from the North, half of the originally planned 40 new stores.
In addition, Sargent said the chain "plans to be aggressive in the reduction of the size of the existing stores," as he has about 500 renewable leases over the next three years.
Despite the missing estimates and implementation to scale back its plans to store, Staples said better in the first quarter sales overseas and increased buying by small businesses in North America.
For the period ended April 30, income rose 2 percent to 6.18 billion from $ 6.06 billion a year ago. Wall Street was for revenue $ 6.2 billion.
Revenue at stores open at least a wet year 1%, mainly on a decrease in traffic of Canadian retail client. This measure is seen as a key indicator of health one retailer because it excludes the stores that were opened or closed in the year.
Revenue in the North American segment of delivery, which serves small business, increased by 2%, in part, on sales of paper and break room supplies.
"We continue to invest in sellers, training and lower prices to drive installations and break the room category", said Sargent.
International revenues rose by 4%, helped by strong performances from China and South America. Revenue edged up to 1%, with a copy North American retail and print sales rising 4 percent.
Staples reported a net income of $ 198.2 million, or 28 cents per share, for the quarter. A year earlier, it gets 188,8 million, or 26 cents per share.
The performance came in below the 32 cents per share that analysts surveyed by FactSet expected.
"Our first quarter results show that we are making satisfactory progress on our key growth initiatives and we are more share in America of the North, but at a price our bottom line," said Sargent.
Staples said that it is having a difficult time passing on price increases contract clients that are resistant to absorb these costs. Even still, the company said that is to be aggressive in trying to gain new customers of contract and keep existing clients, while the competition is heating up.
The chain now expects this 2011 $ 1.35 to $ 1.45 per share earnings. Its prior forecast was for earnings of $ 1.50 to $ 1.60 per share. Analysts expected $1.53 per share.
The company has maintained its Outlook for a low single-digit increase in revenues for the fiscal year.
Branch led reduced compensation analyst Citi Investment Research Kate McShane to downgrade Staples for "Hold" to "Buy" and cut its price target to $20 to $27.
For the second quarter, Staples anticipates earnings of 18 cents to 20 cents per share, with revenue flat slightly higher than the period of the previous year. Analysts expected 26 cents per share.
Staples operates in 26 countries of the North and South America, Europe, Asia and Australia.
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