Staples disappoints; Some want Office chains to merge

NEW YORK - Staples Inc (GPS).(O) reduced its fiscal year forecasts and said that it would open stores that he had planned after its quarterly results missed Wall Street estimates, sending its shares down nearly 16% less.

The new renewed also speak of the need for consolidation in the sector of the supply of Office.

Small rival Office Depot Inc. (ODP).(N) and OfficeMax Inc. (OMX).(N) posted weak quarterly sales last month that shoppers and clients spend less on Office supplies in a course of slow recovery of the US economy.

Dismal numbers Staples Wednesday sent shares of the company at their lowest level in two years and dragged down stocks Office Depot and OfficeMax.

"We had held hope that their results would show their two smaller competitors market share gains, but the gain of the very small share comes in high price," said Credit Analyst Gary Balter Switzerland.

"Three players are at least too many in this sector," Balter added. "Consolidation will be a necessity."

Office supply sector may also be less relevant growth, with businesses and consumers opting more and buy some of these products from Amazon.com (AMZN) online retailer(O) or independent dealers.

Nomura analyst Aram Rubinson Staples downgraded earlier this month, despite his belief that the string is "managed by some of the best executives in the retail around."

"If we believe that Staples is a far better operator, we believe that the problems faced by the Office Depot and OfficeMax are not expressly cyclic or company-specific," Rubinson said at the time. "Rather, the Office sector fighting a secular battle of relevance."

On Wednesday, Staples Chief Executive Officer Ron said Sargent that the company would now open approximately 20 new stores to 10 to the Canada, and United States while closing approximately 10 of these markets. That the net addition of 20 new stores in North America is half of the previous outlook of 40.

Staples is also currently of "cropping significant feet square" in its current format of 18 000 square feet, said Sargent.

DIFFICULT TIME TO COME

The company, which sees very little improvement in the US economy this year, said that he sees the whole net revenues of $ 1.35 to $ 1.45 on the one hand, to the bottom of his prior notice from $ 1.50 to $ 1.60.

It is less optimistic about sales as well. It provides that the growth at a rate low percentage to a single digit, compared to its prior Outlook for an increase in the lower mid-single digit.

Some analysts have raised concerns that even recent improvements of the US economy was not going to follow in an area traditionally regarded as a barometer of economic health.

Net profit of Staples increased 198.2 million, or 28 cents per share, in the first quarter ended April 30 of $ 188,8 million, or 26 cents per share, a year earlier. Analysts expected 32 cents per share, according to Thomson Reuters I/B/E s.

Sales increased by 2% to 6.17 billion, missing for estimating average analysts 6.20 billion.

Shares of Staples fell by 15.9% to $16.53 on the Nasdaq. On the New York Stock Exchange, Office Depot fell 6.4%, and OfficeMax fell by 7.0%.