Staples sees a still-cautious consumer as outlook falls short

No. 1 office-supplies retailer Staples Inc. said Tuesday its fiscal fourth-quarter profit fell 18%, hurt by incentive compensation and consumers holding back on big-ticket purchases for business machines and furniture as overall sales showed signs of improvement.

Meanwhile, plans to increase capital spending for the first time in three years and investments in growth and more profitable areas such as tech-support and copy and print businesses helped lead to a forecast this year that fell short of Wall Street expectations, sending its shares lower by 7.4% in mid-morning trading.

"We intended to invest in businesses that are going to allow us to be successful," said StaplesChief Financial Officer John Mahoney in an interview. The investment community would appreciate that "as analysts get better understanding of our guidance."

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- Posted: 2010-03-02 10:39:17

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