Staples 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Sales in categories beyond office supplies are 40% of sales

“Sales in categories beyond office supplies now represent more than 40% of our mix in North American commercial or about $3.5 billion annually. These new categories will become the growth engine for our company and we plan to build on our momentum here.”

-4% Comp

“Same store sales in North America declined 4% in Q3 driven by a 4% decline in traffic and flat average order size year-over-year. We saw improvement in the monthly comp trends throughout the third quarter and we continue to take important steps to stabilize the performance of our retail stores.”

You do get some transfer from Office Depot closing stores nearby, but they know their customers well

“Clearly when we close one of our own because we get everything that’s there, when they close generally they close one of two or one of three, and they still remain in the market, so there is not as much to take, plus they pretty much know their customers. So I think when you do your own and especially if you are selecting the one that have high transferability of those. So the earlier ones tend to be better honestly but you are on the better.”

I think there are some elements of better business formation

“It’s a little hard to know in real time, but I think the answer to your question is it sustainable? I think the answer is absolutely yes. And whether that’s the economy or new business formation kind of helping us that’s great but really we think the things that we have done to kind of reengineer the business, to revamp how we go to market with our customers, the things that we’re selling and frankly boss beyond office supplies. I mean we understand that the big picture is that the paper based office supplies are going to continue to decline a couple of percent a year and that’s why we have spent so much energy and effort and money in building this boss capability.”