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Numbers Not Stellar, But Office Depot Beats Street

Tuesday November 6th, 2012 - 8:14PM


Office Depot, Inc. has announced that, for the third quarter ended September 29, total company sales were down 5% to $2.7 billion versus the year-earlier period. In the North American Retail division, comparable store sales decreased 4%, the company reported.

Company wide, third quarter 2012 sales were down 3% on a constant currency basis.

Office Depot reported a net loss, after preferred stock dividends, of $70 million or 25 cents per diluted share in the 2012 third quarter compared to net earnings, after preferred stock dividends, of $92 million or 28 cents per share in the 2011 period. Office Depot said third quarter 2012 results included $8 million in charges primarily related to restructuring activities and actions to improve future operating performance as well as $88 million related to non-cash asset impairment charges with $73 million recognized in the North American Retail division and $15 million recognized in the International division.

Excluding the restructuring and impairment charges, Office Depot stated, third quarter 2012 net earnings, after tax and after preferred stock dividends, would have been $18 million or six cents per share.

Excluding 2011 third quarter charges and the benefit from the reversal of accruals, Office Depot would have had a net loss, after preferred stock dividends, of about $700,00 or zero cents per share, the company noted.

Operating income came in at a loss of $55.1 million versus a profit of  $19.1 million in the 2011 third quarter.

The North American Retail Division reported third quarter 2012 sales of $1.2 billion, a decrease of 5% compared to the prior year.

Still, Office Depot characterized the third quarter as an advance in its fortunes, and the retailer did beat a Zacks Consensus Estimate of Wall Street analysts that head earnings at one cent per share rather than the six cents achieved.

"We are pleased that these results reflect successful execution against our strategic plan, even in this challenging economic environment," said Neil Austrian, Office Depot chairman and CEO. "We have a great team that is committed to improving the performance of Office Depot now and into the future."