Staples warns of weak sales on low demand for core office supplies
By Devika Krishna Kumar
(Reuters) - Staples Inc (SPLS.O: Quote) warned that its sales could fall in the current quarter as it sells fewer computers and core office supplies such as ink, toner and paper in North America amid stiff competition from online retailers and big-box chains.
Shares of the largest U.S. office supply retailer fell as much as 4 percent. The stock was among the most traded on the Nasdaq on Wednesday.
Staples has been spending heavily on advertising to promote itself as a seller of products other than traditional office supplies.
Sales in its North America retail business, under which it sells core office supplies as well as breakroom items and copy and print products, fell 6 percent in the second quarter.
The business accounted for about 43 percent of Staples' total sales in the quarter.
Chief Executive Ron Sargent said quarterly sales of computer and technology accessories fell in double-digit percentage terms. "These categories represent about 20 percent of our total retail sales mix and drove about two-thirds of our same-store sales decline during the second quarter," he said on a conference call.
North America same-store sales, excluding Staples.com, fell 5 percent.
The company, facing stiff competition from mass merchants such as Wal-Mart Stores Inc (WMT.N: Quote) and online retailers such as Amazon.com Inc (AMZN.O: Quote), has announced several promotions for the back-to-school season. Continued...