I think that the specifics here will not just "spare" ABSY from the impact of a consumer pull back in a recession. I have been posting for some time that the unavoidable economic reality here, given what Staples says about the dramatic bottom line impact of the implementation on their business, is that a recession should in fact drive a dramatic acceleration in ABSY's business.
Recessions don't give management much latitude in altering product mix or in pricing more aggressively to gain competitive advantage... leaving only heightened interest in cost cutting and efficiency enhancement efforts as a source of containing the impact. ABSY products pay for themselves rapidly by limiting costs... while also enhancing efficiency by sustaining inventories in higher sales value products. The dual impact that matters most is, first, enabling the customer in better weathering the financial impact of the coming recession, and, second, allowing them to reach the end of the recession in better financial shape... with significant competitive advantages not shared by competitors going forward.
Notably, as sales begin to slack off, the more rapidly and the earlier implementations are begun, the more the immediate benefits accrue and the more a future competitive advantage is gained. More rapid implementation limits immediate damage in the downturn, and exaggerates benefits on the rebound.
I'm not saying I think a recession will be good for SPLS... although, relatively speaking, I do think it will be much harder on SPLS competitors. But, I do think recession will likely drive accelerations of ABSY implementations, which will help SPLS, and other customers, in limiting the impact of the recession, while positioning them to lead competitors on the way out of the recession on the other side: getting hurt less in the downturn, and benefiting more, earlier, in the upturn.
