By GARY PUTKA
Staff Reporter of THE WALL STREET JOURNAL
FRAMINGHAM, Mass. -- Staples Inc. Chief Executive Thomas Stemberg said he is "pretty comfortable" that the big office-supply chain will meet analysts' earnings estimates of 28 cents a share in its fourth quarter ending Jan. 29.
Despite falling retail prices for office supplies and investor concerns that the market is over-saturated with outlets, Mr. Stemberg said he was also comfortable that the company would meet analysts' estimates of a 9% to 11% gain in comparable-store sales -- or stores open for at least a year.
In last year's fourth quarter, Staples earned 15 cents a share, after a nonrecurring charge, on sales of $2.08 billion.
Along with competitors Office Depot Inc. and OfficeMax Inc., Staples shares suffered last year on over-saturation concerns, and took their sharpest hit after Office Depot issued an earnings warning last August.
Mr. Stemberg said that despite concerns about too much competition, he believes there is room for expansion. He said his past predictions of how many big chain stores the market can take have proven wrong on the low side, and he now believes that North America can handle 5,000 stores, up from about 2,700 today. "The only thing that will change that is if the world goes digital -- that is, completely paperless," Mr. Stemberg said, adding that he sees no sign that will occur.
Mr. Stemberg said Staples continues to face a challenge of increasing sales while average prices for its products are falling, led by paper, computers and printers. But he said those declines had abated some on a year-over-year basis in the fourth quarter.
Write to Gary Putka at gary.putka@wsj.com. |
