Could be (a)"buy on the rumor, sell on the news" syndrome; (b)the notion that the "big dog" on the block (no pun intended) should have beat by more; (c) that sales and margins are still weak in Europe and Australia, with only the commitment by management to keep working on it; (d) a cautious forecast, pointing to a better second half of 2012 than the first half; (e) poor government sales; or (f) all of the above.
Staples is still best of breed in this segment, but until the economy improves even best of breed will suffer. I picked up a few more shares at $15, but might have to be happy with the dividend for a few weeks/months.
Here is my take. You will see a management shake up soon as Ron S will not accept such poor results for much longer. Stock is under performing big time vs S and P 500 and he has to be feeling the heat. His successor Miles is just not getting it done as the head guy for International. His strategy is all wrong and they have to know it by now. You simply cannot shove the "Staples Way" down other people's throats in places like Germany and Australia and expect them to scream with joy like the robotic followers on the US management team. I expect a Sr Management shake up soon with changes across the board and some new blood coming in that can execute. The old team has just not been able to adapt to the changing landscape since the CE deal. Unfortunately, more layoffs will be following without a doubt.