Tags: Office Depot | Close | Stores | Loss

Office Depot to Close 400 US Stores, Posts Loss

Tuesday, 06 May 2014 08:05 AM

Office Depot Inc. raised its forecast for full-year adjusted operating income and said it would close at least 400 stores in the United States over two years, sending the office supply retailer's shares up about 10 percent before the bell.

The company, which also reported better-than-expected quarterly results due to cost-cutting, said it would shut 150 stores this year.

The store closures are a part of the company's plan to consolidate operations after the acquisition of OfficeMax in November, Chief Executive Roland Smith said in a statement.

Office Depot had 1,900 U.S. stores as of March 29.

The closure of the 400 stores will start adding to profit in 2015 and is expected to lead to annual run-rate savings of at least $75 million by the end of 2016, Smith said.

Office Depot raised its full-year adjusted operating income forecast to at least $160 million from $140 million.

The company and rival Staples Inc. have been struggling with declining sales in the United States as shoppers shift their office-supply purchases to e-retailers, mass merchants and drugstores.

Same-store sales in Office Depot's North America retail division fell 3 percent in the first quarter ended March 29.

The company posted a net loss of $109 million, or 21 cents per share, attributable to common stockholders.

Office Depot posted a net loss of $17 million, or 6 cents per share, a year earlier.

The company earned 7 cents per share, excluding items.

Including OfficeMax operations, sales were $4.35 billion. Office Depot alone had sales of $2.72 billion a year earlier.

Analysts on average had expected a profit of 3 cents per share on sales of $4.28 billion, according to Thomson Reuters I/B/E/S.

Office Depot's shares closed at $4.17 on Monday on the New Stock Exchange.

© 2017 Thomson/Reuters. All rights reserved.

 
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Office Depot Inc. said it would close at least 400 stores in the United States as shoppers shift their office supply purchases to e-retailers, mass market chains and drugstores.Office Depot, which also reported a quarterly net loss, said it expects to close 150 stores this...
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2014-05-06
Tuesday, 06 May 2014 08:05 AM
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