Office Depot beat Wall Street estimates in its second quarter, although retail division comps slipped.
In the second quarter, Office Depot recorded net income from continuing operations of $19 million, or three cents per diluted share, versus $21 million, or four cents per diluted share, in the year-previous period. On an adjusted basis, excluding one-time charges, net income from continuing operations was $30 million, or five cents per diluted share, versus $34 million, or six cents per diluted share, in the year-before quarter.
Office Depot topped a MarketBeat analyst consensus estimate of three cents per diluted share.
Sales in the quarter were $2.63 billion versus $2.36 billion in the year-earlier period. Operating income was $48 million as compared to $41 million and adjusted operating income was $63 million flat with the year-prior quarter.
In the retail division, Office Depot posted operating income of $22 million versus $20 million in the quarter a year previous. Comparable sales slipped 2% as overall sales decreased to $1.05 billion from $1.11 billion in the period a year before. According to Office Depot, the increase in operating income year over year emerged primarily from the positive impact of ongoing efficiency and cost reduction initiatives.
“I am extremely pleased with our performance in the second quarter as the execution of our strategy is driving improved sales trends across all three of our operating divisions,” said Gerry Smith, Office Depot CEO. “Sales in the business solutions division were up an impressive 4% in the quarter driven by our acquisition strategy and growth in the adjacency categories beyond office products. I’m also encouraged by the early success of our initiatives to increase services, which now represent 16% of total sales. I’m confident that we have the right strategy in place to grow the business long term, and we have assembled a talented and dedicated team that is focused on driving continued execution across the enterprise.”