OFFICE DEPOT’S 1ST Q. FLAT EARNINGS

[Anonymous]

Office Depot Posts Flat 1Q EarningS

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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.

[Author]

April 23, 2005 at 11:12 AM