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Stock Market & Financial Investment News

News Breaks
March 6, 2014
11:26 EDTODP, SPLSStaples plunges to 52 week low on weak results, store closure plan
Shares of office products retailer Staples (SPLS) are sinking after the company's fourth quarter results and first quarter guidance trailed expectations. The company also announced it will no longer provide annual sales or EPS guidance. WHAT'S NEW: This morning, Staples reported Q4 adjusted earnings per share of 33c and revenue of $5.87B, compared to expectations of 39c and $5.97B, respectively. The company forecast Q1 EPS of 17c-22c, significantly trailing expectations of 27c. Staples also said it Q1 sales are expected to decrease compared to the prior year. WHAT'S NOTABLE: Staples initiated a multi-year cost savings plan which is expected to generate annualized pre-tax cost savings of approximately $500M by the end of 2015. The savings are expected to come from supply chain, retail store closures and labor optimization, non-product related costs, IT hardware and services, marketing, sales force, and customer service. The company said it expects to close up to 225 stores in North America by the end of 2015. ANALYST REACTION: Following the quarterly report, research firm Janney Capital downgraded Staples to Neutral from Buy. PRICE ACTION: In late morning trading, Staples fell $2.06, or about 15.4%, to $11.33 on nearly five times its average daily trading volume. Earlier in the session, the stock hit a fresh 52-week low of $11.16. Including today's slide, the stock has lost about 8% over the past twelve months. OTHERS TO WATCH: Staples main competitor, Office Depot (ODP), was down about 4% on the session.
News For SPLS;ODP From The Last 14 Days
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January 20, 2015
13:09 EDTSPLS, ODPSources: Staples to spurn Starboard's call to merge with Office Depot, FT says
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10:47 EDTODP, SPLSStaples says will consider 'all actions' that would create shareholder value
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10:23 EDTODP, SPLSStarboard says Staples should explore merger with Office Depot
Starboard Value, one of the largest shareholders of Staples (SPLS), confirmed, as previously reported, that it has delivered a letter to Ronald Sargent, Chairman and CEO of Staples, and the board of directors of Staples. In the letter, Starboard states in part: "As we discussed in our recent meeting, we believe that the best way to maximize value for Staples' shareholders is through exploring and completing a business combination with Office Depot (ODP). For a variety of reasons, we believe that now is the right time to pursue such a transaction, and we urge you to immediately retain a reputable investment bank and legal advisors to assist the Board in evaluating, structuring and executing a transaction with Office Depot. We believe that a strategic combination of Staples and Office Depot would result in synergies that would more than double the operating profits of the combined company and would create an industry-leading office supply retailer that could more effectively compete against larger retailers and online competitors. The magnitude of value creation from such a business combination far exceeds anything that either company could achieve on a standalone basis. We believe that the evidence is clear that shareholders are broadly supportive of a transaction between Staples and Office Depot. As shown in the chart below, since the merger speculation began last September, Staples' share price has risen over 50%, strongly outperforming the S&P 500...After the recent increase in Staples' share price, we believe the stock now trades at a substantial premium to the intrinsic value of the standalone company. This results in a lower cost of capital for Staples and a stronger currency which could be used to acquire Office Depot. If Staples fails to fully explore and consummate a transaction with Office Depot, shareholders will undoubtedly be extremely disappointed...We understand that this will require cooperation from Office Depot, and we have already expressed to them our strong support for a transaction...Our sincere hope is that we can continue to have a constructive dialogue. However, if it becomes clear to us that you have no intention of seriously pursuing this unique and highly attractive opportunity, it would be a clear sign that significant leadership change is needed at Staples."
09:31 EDTODP, SPLSActivist Starboard urging Staples, Office Depot to merge, WSJ reports
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08:59 EDTSPLS, ODPStarboard urged Staples to explore Office Depot merger, Bloomberg says
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January 15, 2015
10:30 EDTSPLSStaples announces board changes, CEO turns down raise to base salary
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