Staples 2Q16 Earnings Call Notes

Staples’ (SPLS) CEO Shira Goodman on Q2 2016 Results

Doubling down on stables business advantage

“My top priority is to position our Company for sustainable, long-term sales and earnings growth. And we’re doing that via our Staples 2020 strategy. This strategy includes a dramatic change in our mindset and our operating model. We’re doubling down on Staples Business Advantage, our North American contract business where we have solid momentum on both the top and bottom line, as well as a best-in-class offering to build on.”

Moving from retail culture to delivery culture

“So to sum up, at Staples, we’re in the early innings of a dynamic and pronounced strategic repositioning. We’re moving from a product focus to a customer focus. We’re moving from a retail culture to a delivery culture. We’re evolving from a high/low pricing strategy to more everyday value. We’re transitioning from a products company to a products and services company. ”

North American commercial markets have been very competitive

“So despite what the FTC is saying, North American Commercial has always been a very competitive market for us and I would say the competitive intensity is pretty constant. Yes, we’re seeing some Amazon out there, but a lot of the competition still is the local dealers and we do have very significant, I think, competitive advantages over them.”

Discussion of competition and advantages in mid market

” it’s a very broad competitive set. It’s everything from dealers, to Office Depot, to online players, to warehouse clubs, etc. And in developing our value proposition mid-market, we’ve thought very carefully how do we win against each one of the different competitors, so how do we place something. So our goal is to be — our antes are deep assortment, competitive pricing and very reliable and flexible delivery and that enables us to compete against one set of competitors as an example.

The delivery is a plus versus the warehouse clubs. But on the other hand, what’s critical and what’s really our differentiator is expertise and services and that enables us to compete against a different set of competitors. The other thing I would say about mid-market which I think we’re somewhat unique in the space, is it is the combination of what I’d call the online and the off-line that really gives us a unique and highly valued by customer offering. So we leverage our eCommerce and digital capabilities that most folks are more familiar with through our public websites, but we have it on our private website.”