 |
|
| View previous topic :: View next topic |
| Author |
Staples (SPLS) |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
 Posted: Tue Mar 02, 2010 5:04 pm Post subject: Staples (SPLS) |
 |
|
Morningstar's latest analyst notes on SPLS:
| Quote: | | Staples SPLS continued to outperform its peers in the fourth quarter, including a 3% gain in North American comparable-store sales and improvement in its North American delivery business. Results from the international segment were soft, but we remain optimistic about the long-term global potential of the combined Staples and Corporate Express platform. Management's initial take for 2010, including low-single-digit revenue growth and earnings per share of $1.23-$1.33 (excluding $50 million-$60 million in pretax integration and restructuring expenses), came in a shade below our expectations, but not enough to change our fair value estimate. Management's assertion of a modest economic recovery in 2010 is consistent with our outlook. We find Staples' North American retail results impressive in light of lingering economic pressures. The 3% gain in comparable-store sales for the fourth quarter easily outpaced the mid-single-digit declines from its closest competitors. Even more impressive was the 20-basis-point improvement in North American operating margins to 9.5%, a result of purchasing synergies related to Corporate Express and improved rent and distribution expenses. North American delivery sales fell 1% for the quarter (a 2% decline on a constant currency basis), but this represented significant improvement from an 11% decline in the previous quarter. We expect gradual sales and operating margin improvement over the next several quarters as the economy stabilizes and the firm realizes additional Corporate Express synergies. Results from the international segment continued to be weighed down by weakness in the European printing business and China operations, but we expect trends to improve over the next few quarters thanks to modest global economic improvement. After adjusting for integration and restructuring expenses, the consolidated operating margin fell 13 basis points to 6.6% this quarter, which is encouraging in light of a still difficult sales environment. We believe the firm is on pace to meet and probably exceed its initial outlook for $300 million in Corporate Express synergies over the next two years. |
|
|
| Back to top |
|
 |
| Author |
Staples (SPLS) Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16445
Location: Sunny California
|
| Posted: Tue Nov 15, 2011 3:10 pm Post subject: |
|
|
Real-world effects there in europe. Australia is a puzzle--didn't think the china bust story had made it to the populace.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
| Posted: Tue Nov 15, 2011 12:34 pm Post subject: |
|
|
Morningstar on SPLS' 3Q earnings:
| Quote: | | While Staples' SPLS third quarter wouldn't appear impressive (revenue up just 0.5% to $6.6 billion and margin expansion of 10 basis points to 8.1% excluding restructuring), the firm continues to outperform its rivals. Both OfficeMax OMX and Office Depot ODP posted low-single-digit revenue declines, which we think affirms our thesis that Staples will continue to take share from its struggling peers. Staples' operating margins are in a league of their own relative to the barely positive numbers from OfficeMax and Office Depot. Management continues to expect total full-year sales growth in the low single digits, but reduced its earnings per share outlook to $1.38-$1.42 from $1.42-$1.48. In the second quarter, it had raised guidance from $1.35-$1.45. Staples raised its share-repurchase target for the year to $600 million from $300 million-$500 million. We plan to make minor adjustments to our discounted free cash flow model to account for the change in earnings per share guidance, but do not anticipate a change in our fair value estimate of $25 per share. We continue to believe that the shares are undervalued, trading at 11 times our forward fiscal price/earnings and 5.8 times enterprise value/EBITDA. By segment, North American delivery sales were healthy (up 1.8%), thanks to strong growth in facilities and breakroom supplies and promotional products. Margins expanded 60 basis points to 9.5% as a result of improved sales of higher-margin products. North American retail sales received a slight boost, up 0.5%, from one new net store, as same-store sales were off 1.0% because of a decline in customer traffic. Similar to delivery, higher product margins drove 10 basis points of margin expansion to 10.7%. International revenue fell 1.9%, or 7.0% on a local currency basis, because of weak economic conditions. European same-store sales were down 12.0%, and management noted weakness in the Australian market. The operating margin continues to lag Staples' other divisions at 3.0%, down 130 basis points from the prior-year period on sales deleveraging. A key strategy for the firm is to drive international margins toward the levels of its other segments. The firm has a long way to go, but we're confident that management's focus on supply-chain initiatives and increasing penetration in specific countries instead of expanding to new markets will lead to profitability improvement. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
| Posted: Wed Aug 17, 2011 3:13 pm Post subject: |
|
|
Morningstar on SPLS' 2Q earnings:
| Quote: | | Staples' SPLS second-quarter results affirmed our thesis that the firm will continue to take share from competitors and deliver solid results. North American delivery sales were healthy (up 3%) thanks to strong customer acquisition, and North American retail sales received a slight boost from new stores, primarily in Canada as Staples takes advantage of Office Depot's ODP recent exit from the market. Management continues to expect total sales growth in the low single digits, but raised its earnings per share outlook to $1.42-$1.48 from $1.35-$1.45. It had reduced this range in the first quarter from the prior outlook of $1.50-$1.60. While we are maintaining our fair value estimate of $25 per share, we note that our revenue growth forecast for the year is in line at 2.5%, but we're on the low end of EPS guidance at $1.42. Despite our relative near-term conservatism, we assert that the shares are undervalued, trading at 10 times our forward fiscal price/earnings and at 5.1 times enterprise value/EBITDA. While its competitors continue to see flat to negative revenue trends, Staples' total sales were up 5.2% to $5.8 billion. Margins, however, contracted 40 basis points to 4.8% as the firm invested in growth initiatives, such as labor and marketing. Despite the softer margins, Staples continues to outperform its barely profitable peers on this front as well. By segment, North American delivery sales rose 3.1% on the aforementioned customer acquisition, and margins contracted 30 basis points to 8.4%. North American retail sales rose 1.7% but were roughly even on a local currency basis on flat comps and net six new stores (four in Canada). Same-store sales were flat as a 1% decrease in traffic offset a 1% increase in order size, while margins fell 30 basis points to 5.0%. International sales rose 15.2%, but entirely because of currency fluctuations, as growth was nominal on a local currency basis. Margins were unchanged year over year at 1.2%, highlighting the firm's ability to cut expenses internationally while investing in future growth. A key strategy for the firm is to drive international margins toward the levels achieved in its other segments. The firm has a long way to go, but we're confident that management's focus on supply-chain initiatives and increasing penetration in specific countries instead of expanding to new markets will lead to profitability improvement. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
| Posted: Wed Sep 08, 2010 1:39 pm Post subject: |
|
|
Goldman's rationale for upgrading SPLS:
| Quote: | Source of opportunity
We upgrade Staples to Buy (from Neutral), and add it to the Conviction List. Our price target is $23, up from $22, implying 23% upside. We view this as a mean reversion call; investors can buy into a strong franchise at an attractive price. SPLS sold off into decelerating EBIT growth, but deceleration should run its course by 3Q2010, and has been anticipated via the stock’s sharp underperformance. The firm continues to gain share; channel checks suggest gradual improvement in delivery and manageable promotions in back-to-school; and, SPLS is pursuing more disciplined capital allocation as it continues to buy back stock after a two-year hiatus.
Catalyst
We expect constructive commentary on back-to-school at our Retail Conference next week; we expect reinforcement of the 2011 earnings growth story at the firm’s analyst meeting in late October; and, we stand modestly above consensus for 3Q2010. Finally, we view the firm as a beneficiary of any potential sector consolidation; consolidation is part of our thesis on OMX. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
| Posted: Thu Aug 19, 2010 11:13 am Post subject: |
|
|
Morningstar on SPLS' 2Q earnings:
| Quote: | | Similar to peers, Staples' SPLS second-quarter results reflected the tough economic environment for office product distributors, with revenue coming in flat with the prior-year period. However, we continue to be pleased with the strides toward margin improvement, as the operating margin (excluding restructuring costs) rose 100 basis points over the prior-year period to 5.24%. In contrast to peers, the company's North American retail segment continues to see an uptick in customer traffic (despite posting flat same-store sales for the quarter). Management updated its outlook, which primarily changed because of a nonoperating matter resulting in a slightly higher 2010 tax rate, returning to normal levels in 2011. The company is guiding toward a full-year top-line increase in the low single digits, in line with our expectations, and there is no change to our fair value estimate. While Staples' North American retail and North American delivery segments achieved modest growth of 2% for the quarter, as expected, results in the international division were weak. Sales were down 6%, primarily the result of a 9% same-store sales decline in Europe. Operating margins at all three segments were up, generally because of favorable product mix shifts and supply-chain improvements. We expect a modest global recovery to give Staples' top line a slight boost in the coming quarters, along with continued margin firming. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
|
| Posted: Thu May 20, 2010 10:01 am Post subject: |
|
|
Morningstar on SPLS' 1Q earnings:
| Quote: | | Staples' SPLS first-quarter results reflected a challenging environment for office product distributors, but we were generally pleased with the firm's ability to increase operating margins. The integration of Corporate Express continued to have a positive impact on profitability in the North American delivery and international divisions, and we remain optimistic about the long-term synergies of the combined platform. We were also encouraged by the modest uptick in discretionary purchases among delivery customers, as they carry higher margins than consumable products and suggest improvement in office supply budgets among corporate customers. First-quarter results were generally in line with our expectations, and there is no change to our fair value estimate. Staple s' North American retail comparable-store sales increased 1%, a decline from the 3% comp in the fourth quarter but still exceeding the low-single-digit declines at the firm's closest competitors. North American retail operating margins improved 30 basis points to 7.6% on reduced marketing and depreciation expenses, partly offset by increased sales of lower-margin technology goods. North American delivery sales grew 6% for the quarter (a 2% increase on a constant currency basis), driven by strong customer acquisition rates. In addition to the aforementioned increase in high-margin discretionary purchases among delivery customers, the integration of Corporate Express helped to drive 160 basis points of operating margin improvement to 8.3% in the North American delivery business, validating our thoughts about potential synergy opportunities. International sales (up 6%, but down 4% in local currencies) showed improvement from the fourth quarter, but continued to be weighed down by weakness in the European printing business. We expect trends to improve over the next few quarters because of a modest global economic recovery, but continue to monitor the European markets for further signs of distress. After adjusting for integration and restructuring expenses, consolidated operating margins increased 110 basis points to 6.3%, which we find encouraging in light of pervasive top-line headwinds. |
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
