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 user 2005-04-23 at 11:12:00 am Views: 40
  • #9070

    Office Depot Posts Flat 1Q EarningS

    Office Depot Inc.,the office products company, on Thursday said net
    income for the first quarter was essentially flat, as a strong retail
    performance in the U.S. and Canada was offset by sluggish performance in its
    business service and overseas operations. 

    The company said net income rose slightly to $115.3 million, or 37 cents a
    share, for the three months ended March 26 from $114.9 million, or 37 cents a
    share, a year ago. The latest earnings per share were 4 cents shy of the average
    estimate from analysts surveyed by Thomson Financial.
    Revenue increased to $3.7 billion from $3.61 billion, but trailed analysts’
    estimates for $3.8 billion.
    Office Depot said improvement at its North American retail division was
    offset by declining performance in its North American business services and
    international divisions.
    Same-store sales at 894 stores in the U.S. and Canada increased 1 percent
    and overall retail sales in North America increased by 6 percent, the company
    said. Improvement in gross margins across most product categories were offset by
    an increased sales mix of lower margin technology products, while cost
    containment reduced store and warehouse operating expenses, the company said.
    In addition to typical office supplies, Office Depot stores offer computer
    hardware and software, furniture and printing and copying services.
    Sales at the business services division fell 2 percent, and gross margin
    fell, hurt by higher supply costs, increased promotional activity and additional
    sales of lower margin products. The international division also saw sales fall 2
    percent despite favorable exchange rates. Results were hurt by increased use of
    promotions and pricing pressure. Office Depot said results at the international
    division were below expectations.