Staples Inc., whose merger with Office Depot Inc. was blocked last week by a federal judge, said profit fell 30% as same-store sales declined in the latest quarter.
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Taking a broader look at the analyst consensus, brokerage firms have a price target of $10.58 on Staples, Inc.
Earlier in May Staples and Office Depot were forced to call off their planned merger agreement after a federal judge ruled in favour of the Federal Trade Commission and issued a preliminary injunction prohibiting the purchase. Adjusted diluted EPS is pegged in a range of $0.11 to $0.13, not including costs related to the termination of the Office Depot acquisition or costs related to closing more stores.
Target’s GAAP earnings increased from 98 cents per share last year to $1.05 per share this year.
Staples results have been hurt by a declining market in an increasingly digital workplace.
Excluding the impact of charges taken during the first quarter of 2016, the company reported non-GAAP net income of $109 million, or $0.17 per share, versus first quarter 2015 non-GAAP net income of $109 million, or $0.17 per share. In North America, the company closed 14 stores in during the quarter. Management expects to close at least 50 North America locations this year.
Sales at existing stores fell 4% in the quarter.
She said in a statement: “The deal would eliminate head-to-head competition between Staples and Office Depot and likely lead to higher prices and lower quality of service for large businesses that buy office supplies”. Analysts were expecting 16 cents a share on $5.09 billion in revenue.
Shares closed down about 0.7% on Tuesday at $8.28 and traded higher by about 2.3% at $8.47 in premarket trading Wednesday.
In one bit of good news for Office Depot, the company said it expects to receive a $250 million breakup fee from Staples on Thursday. The office-supply companies argued the merger “indisputably will benefit all retail customers, and more than 99 percent of our business customers”, according to Sullivan’s opinion.
In a different news, on Dec 16, 2015, Shira Goodman (President, NAC) purchased 5,100 shares at $9.69 per share price.
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While the companies countered that Amazon’s year-old Amazon Business unit could fill the void left by Office Depot, that argument failed to dissuade the judge from halting the tie-up after almost a month-long hearing.
