Staples (NASDAQ:SPLS) released a first-quarter earnings dud and slashed its full-year guidance on Wednesday, fueling a 15% plunge in the office supplies retailer’s stock.
The Framingham, Mass.-based company said it earned $198.2 million, or 28 cents a share, last quarter, compared with a profit of $188.8 million, or 26 cents a share, a year earlier. That disappointed shareholders who had been expecting EPS of 32 cents.
Similarly, sales increased 2% to $6.17 billion, trailing consensus calls for $6.20 billion. Same-store sales declined 1% in North America.
Spooked by the results, Staples downgraded its 2011 EPS view to $1.35 to $1.45, down from $1.50 to $1.60 previously and well below the Street’s view of $1.52. Same-store sales are expected to rise in the low-single digits.
Likewise, Staples forecasted second-quarter EPS of 18 cents to 20 cents, which compares unfavorably with estimates for 25 cents.
“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,” CEO Ron Sargent said in a statement.
The results were so disappointing that Citigroup wasted no time downgrading the stock to “hold” from “buy” Wednesday morning.
Wall Street punished Staples in the wake of the gloomy guidance, sending its stock diving 13.54% to $16.97 ahead of Wednesday’s open. The stock had already suffered a 14% 2011 loss and a 10.5% decline from a year ago.
Rivals Office Depot (NYSE:ODP) and Officemax (NYSE:OMX) also posted early declines.