Office Depot Q4 Sales Down But Exceed Expectations

 

Following several quarters of double-digit sales decreases, Office Depot fourth quarter sales were down only 6% as officials with the office superstore reported the outcome for the period ended December 26 were better than expected.

Total company sales for the fourth quarter of 2009 decreased $3.1 billion, with a net loss of $77 million compared to a loss of $1.54 billion in the same period of 2008.

“Our fourth quarter operating results and cash flow performance exceeded our expectations due to stronger than anticipated sales in our North American Retail and International businesses,” said Mike Newman, Office Depot’s chief financial officer. “We remain pleased with the execution of our strategic initiatives across the entire enterprise.”

Fourth quarter 2009 sales in the North American Retail Division were $1.3 billion, a decrease of 9% compared to the same period last year, due in part to having 115 fewer stores open in the fourth quarter of 2009 versus the prior year period. Comparable store sales in the 1,139 stores in the U.S. and Canada that have been open for more than one year decreased 4% for the fourth quarter compared to the prior year period.

Consistent with previous periods, the decrease in comparable store sales was driven by macroeconomic factors as consumers and small business customers continued to hold back their spending, especially in higher priced, discretionary categories like furniture.

The North American Retail Division had an operating profit of $2 million for the fourth quarter of 2009, compared to a loss of $119 million reported in the same period of the prior year.

During the fourth quarter, Office Depot closed eight stores, opened two and relocated one store, bringing the total store count for North America to 1,152 as of December 26, 2009.

Full year 2009 sales were $12.1 billion, a decrease of 16% from the prior year, principally driven by adverse economic conditions throughout the company’s sales territories. Loss for the year was $627 million, compared to a loss of $1.48 billion in 2008.