Citing competitive price-cutting and slowed consumer spending, Staples Inc. (Framingham, Mass.) announced that its profits for its third-quarter had dropped 8.5 percent since last year, and that fourth-quarter earnings will be higher than last year but lower than analysts expected.
Chairman and ceo Thomas Stemberg said that the company had expanded too quickly and spent too much money, moving into new markets and opening a distribution center in Terre Haute, Ind., that is not yet operating at capacity. “We frankly screwed up,” he said.
Staples and its biggest competitors – Office Depot (Delray Beach, Fla.) and OfficeMax (Shaker Heights, Ohio) – have all been hurting by a combination of market factors: slowing computer sales, competition from discount stores and price clubs, their own competitive price wars and increased shoplifting as more high-tech consumer items, like cellular telephones, have appeared on the shelves.