By MAXWELL MURPHY (Wall Street Journal) 11/18/2010
Like its smaller rivals, Staples Inc. controlled costs in its fiscal third quarter to boost margins and drive profit growth but, unlike Office Depot Inc. and OfficeMax Inc., the nation's largest office-supply chain even eked out a bit of revenue growth.
The office-supplies retail sector has seen mixed results lately as persistently high unemployment pressures consumers, but its size and market share have allowed Staples to outpace its competitors and avoid some of their woes.
On a conference call to discuss its latest quarterly results, the company said early sales of Amazon.com Inc. Kindle electronic-book reader are "very good" since its was rolled out in Staples stores nationwide last month. It said it doesn't yet participate in the book-download business, but sales of Kindle accessories have been "very nice." Staples sells "one or two other off-brand" e-book readers, but is staying away from the brands "the book shops have," apparently a reference to Barnes & Noble Inc.'s popular Nook and the less-popular Kobo, made by the Toronto company of the same name and backed by Borders Group Inc.
North American retail sales, which accounted for the greatest share of Staples's revenue, increased 0.6% but were down 1% on a same-store basis, in line with the company's forecast. North American delivery revenue grew a better-than-expected 2.5%, and on the call it said it won "several new, multi-million-dollar contracts during the quarter."
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