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ODP delivers earnings growth, but sales weak

BOCA RATON, Fla. — Office Depot delivered higher profits for its third quarter, but sales were down thanks in part to weak comps at its North American retail division. Office Depot reported that total company sales for the third quarter of 2011 were $2.8 billion, a 2% decrease compared with the third quarter of 2010. Net earnings for the quarter were $92 million, or 28 cents per diluted share, compared with $32 million or 12 cents per diluted share for the same period last year.

“I’m pleased with the traction we’re getting in our North American businesses despite a lackluster U.S. economy,” said Neil Austrian, Office Depot’s chairman and CEO. “The successful execution of our key business initiatives is beginning to move the needle.”

Office Depot's North American retail division reported third-quarter sales of $1.2 billion, down 4% from the prior year. Comparable-store sales decreased 2% for the third quarter. The decline in comparable sales of computers and related products, which began in the later part of the second quarter of 2011, continued during the third quarter and contributed significantly to the division’s overall comparable sales decline, according to the company. Positive comparable sales were reported in supplies, back-to-school essentials, Tech Depot Services and Copy and Print Depot. Furniture sales were essentially flat. 

At the end of the third quarter of 2011, Office Depot operated 1,132 stores in the U.S. and Puerto Rico. The North American retail division opened three new stores and closed two stores during the third quarter.

For its North American business solutions division, Office Depot reported sales of $821 million, a 2% decrease compared with the third quarter of 2010. Internationally, sales were up 1% in U.S. dollars and down 7% in constant currencies compared with the third quarter of 2010.

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