(SPLS - Get Report) doesn't foresee a monumental change in the economy in the near-term, which doesn't bode well for 2012.
"I think we remain in a slow growth economy for business in North America and that's really driven by high unemployment and fear of the future," CEO Ron Sargent said during a conference call with analysts following third-quarter results.
Its international business, specifically Europe, also remains a concern.
"Softness in Europe is not surprising, and it is unlikely to change as debt issues morph into weaker and weaker economies," Janney Capital Markets analyst David Strasser wrote in a note. "Staples will aggressively cut G&A
general and administrative expenses
in Europe, but we believe this division will remain a problem child for the foreseeable future."
Staples cut its outlook for the full year, now expecting a profit of $1.35 to $1.39 a share from its prior forecast of $1.39 to $1.45 a share.
"When I look at our business going forward, I think we're making all of the investments we can make," Sargent said on the call. "But if you look at our fourth-quarter guidance, I think it reflects our best thinking at this point. We want to be conservative on the top line given the environment that we are operating in. We certainly don't expect the European economy to get a lot better in the next 90 days. And if sales do get better ... you can expect us to be at the higher end of guidance. But I think we're spending appropriately given the results we are getting."
Still, Staples has been outperforming rivals
(ODP - Get Report)
during the year.
Staples now plans on repurchasing $600 million of its stock for the year, up from prior expectations of $300 million to $500 million.
Shares of the company lost 36% for the year.