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 user 2007-07-27 at 2:26:00 pm Views: 44
  • #18469

    Soft Sales Slam Office Depot
    Shares of Office Depot  tumbled more than 7% Thursday after the
    retailer reported a drop in second-quarter profits and
    weaker-than-expected sales.

    Depot’s net income fell to $109.1 million, or 40 cents a share, from
    $118.3 million, or 41 cents a share, a year earlier.Excluding certain
    charges, the office-supply company earned 43 cents per share in the
    second quarter, meeting the average estimate of analysts surveyed by
    Thomson Financial.

    Sales rose 4% to $3.63 from $3.49 billion, missing analysts’ target of $3.69 billion.
    American retail sales in North America rose 1%, while international
    sales increased 14% in U.S. dollars and 7% in local currencies.But
    same-store sales, or sales at stores open at least a year, dropped 5%
    in North America.”As previously discussed, we knew we were facing
    significant headwinds as we entered the second quarter this year, a
    quarter which also is seasonally our lowest point for sales,” Chief
    Executive Steve Odland said in a statement. “While we are frustrated
    that we weren’t able to grow earnings at the same rate as in the
    previous two years, we are pleased that in this challenging sales
    environment we delivered earnings per share consistent with the prior
    year and were able to invest in our global business for the
    future.”Shares of Office Depot recently were down $2.18, or 7.5%, to
    $26.77. The decline brought the stock to a 52-week low of $26.53
    earlier in the day, compared with a 52-week high of $44.69 in October.
    Shares have been hovering near year-lows for the past month.Rival
    OfficeMax  was falling $3.59, or 9.8%, to $33.16, while Staples (SPLS)
    declined 68 cents, or 2.8%, to $23.41.