Posted 7/27/2010 - 10:35:54 AM

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Second quarter sales at Office Depot were down 4% but the results exceeded company expectations, officials said. Sales for the first quarter were $2.7 billion with a net loss of $19 million for the period ending June 26, 2010, up from a net loss of $82 million for the same quarter the previous year.

“Our second-quarter operating results exceeded our expectations due to strong execution in North American retail, North American direct and the international division,” said Mike Newman, Office Depot’s chief financial officer. “We’re pleased that these results include year-over-year gross profit margin improvement, marking the fourth consecutive quarter of such improvement.”

Second quarter 2010 sales in the North American retail division were $1.1 billion, a decrease of 2% compared to the same period last year. Comparable store sales in the 1,132 stores in the U.S. and Canada that have been open for more than one year decreased 1% for the second quarter compared to the prior year period. Although the average order value increased in the second quarter of 2010, customer transaction counts were down compared with the second quarter of 2009.

The company's North American retail division reported operating profit of $9 million in the second quarter of 2010, compared to a loss of $13 million reported in the same period of the prior year. The operating profit improvement was driven by favorable product margins and the absence of a $5 million charge recognized in the second quarter of 2009 to reflect updated assumptions on subleases of closed stores.