Sales: up 1% Earnings: 41 cents vs. 38 cents Operating margins: up 56BP North American Delivery: Sales up 2%; operating margins up 84BP but product margins declined North American Retail: Sales; up 3%; SSS up 2% based on higher average order size and slight increase in traffic; operating margin up 99BP International Sales: Down 5%; SSS down 9% in Europe and weak sales in Australia; operating margin down 173BP Forecast: Company expects sales to increase in low single digits, and earnings to increase in high single digits vs. $1.37 last year. My analysis: Feel like Romney in Michigan: We won, but not by much. Today's trading should be interesting.
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.