Staples forecasts fifteenth straight quarterly sales decline
(Reuters) - Staples Inc (SPLS.O: Quote), the biggest U.S. office supplies retailer, forecast its 15th straight quarter of declining sales as it closes stores in the face of intensifying competition.
The company and former merger partner Office Depot Inc (ODP.O: Quote) are struggling to compete with Wal-Mart Stores Inc (WMT.N: Quote) and Amazon.com Inc (AMZN.O: Quote) at a time when people are using less stationery.
Staples' shares were down 7.3 percent at $8.65 in morning trading on Wednesday.
The company's sales fell more than expected in the second quarter and the company said it expected sales to also decline in the current quarter. It did not provide a specific forecast.
Analysts on average were expecting sales to drop 3.1 percent in the current quarter, according to Thomson Reuters I/B/E/S.
"The blunt truth is that market dynamics are firmly against Staples in that there are far more generalists in the stationery market than there used to be and online plays a much more significant role," said Carter Harrison, a retail analyst at Conlumino.
Framingham, Massachusetts-based Staples said total sales fell 3.7 percent to $4.75 billion in the second quarter. Analysts had expected sales of $4.77 billion.
Sales at its established stores in North America fell 5 percent, steeper than the 3.1 percent drop analysts polled by research firm Consensus Metrix had expected.
Besides trying to buy Office Depot - a deal that fell apart over antitrust concerns - Staples has been responding to tough conditions by closing stores and focusing on serving medium-sized businesses rather than Fortune 500 companies. Continued...