"Staples's net drops 15%; company cuts year view"

Staples stock was down $2.25 per share when I checked it a few minutes ago.

Article by Saabira Chaudhuri on Aug 21^st, reporting for MarketWatch.com

Staples Inc.'s SPLS -13.54% fiscal second-quarter earnings slumped 15% as the office-supply giant continued to be pressured by weak sales abroad, while North American retail sales also declined.

Citing weaker-than-expected results for its second quarter, Staples lowered its view for the year, now expecting sales to decline in the low single digits and per-share earnings to be $1.21 to $1.25. Staples previously said it expected sales to rise in the low single digits from a year earlier, along with per-share earnings of $1.30 to $1.35.

Staples, the largest office-supply chain in the U.S., has seen its profit challenged by an increasingly digitized office, broad-based weakness in Europe and Australia, and greater competition from mass merchants and online sellers. However online sales recently have been a relative bright spot, a trend that continued in the latest period, with the company logging 3% growth from Staples.com sales.

"We drove online sales growth and aggressively managed expenses during the second quarter, but this progress was offset by weakness in our retail stores and international businesses," Chief Executive Ron Sargent said Wednesday.

The company reported its North American same-store sales--which exclude sales from Staples.com--fell 3%, reflecting a decline in traffic and in order size. Meanwhile, Europe same-store sales slid 6% amid lower traffic.

For the quarter ended Aug. 3, Staples posted a profit of $102.5 million, or 16 cents a share, versus a year-ago profit of $120.4 million, or 18 cents a share, a share.

Sales fell 2.2% to $5.31 billion.

Analysts polled by Thomson Reuters recently expected per-share earnings of 18 cents on revenue of $5.37 billion.

Gross margin narrowed to 25.6% from 26.1%. Operating expenses fell 1.7%.

At the North American commercial segment, which sells office products and services directly to businesses, sales grew 1.3%. North American stores and online sales slipped 2.3%. Meanwhile international sales declined 8.3%.

Shares of Staples closed Tuesday at $16.84 and were inactive in recent premarket trading. The stock has risen 14% in the past three months.