Staples 4Q16 Earnings Call Notes

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Shira Goodman – CEO

Narrowing geographic focus to NA

“Finally, we made great progress narrowing our geographic focus to North America. While we have successfully provided tremendous value to business customers across Europe over the years, we have not been as successful creating shareholder value in Europe. We believe it’s in the best interest of our shareholders to narrow our focus to North America where we have our strongest return on net assets, greatest scale advantage, and most compelling value proposition.”

Invest in the delivery business

“our investments in growing the delivery business are really of four types. First and foremost is growing our sales force. And keep in mind that’s inside outside specialists, we said when we launched 20/20 that it would be about 1,000 sale reps over three years, and we’re on track with that; obviously increasing the productivity of our sales team to leveraging data, digital marketing et cetera; staying competitive on pricing, our pricing in the contract segment is actually quite competitive, and we will continue to do so but that is not the single largest area of investment; and then just investing in the supply chain to keep pace with the growth of the delivery business.”

Omni is growing

“I was just going to say, I want to be clear that omni is growing, albeit it’s not the core component of our growth strategy. So, as an example, buy online and pick up in store which is a great win for the customer from a convenience perspective; it’s a win for us, and that we don’t pay for the last mile delivery is a growth area for us very much so. And the same can be said for ships from store which really helps us again with managing our dispersed inventory, especially end of life inventory more prudently and efficiently.”

Trying to understand a niche

“I was just going to say, I want to be clear that omni is growing, albeit it’s not the core component of our growth strategy. So, as an example, buy online and pick up in store which is a great win for the customer from a convenience perspective; it’s a win for us, and that we don’t pay for the last mile delivery is a growth area for us very much so. And the same can be said for ships from store which really helps us again with managing our dispersed inventory, especially end of life inventory more prudently and efficiently.”