OFFICE DEPOT SUPPLIES UPSIDE

[Anonymous]

Office Depot Supplies Upside
Office
Depot  posted a 12% rise in first-quarter earnings Tuesday, beating
Wall Street’s forecast, as a focus on margin improvements continued to
bear fruit.
The
office-supply retailer’s earnings rose to $129.5 million, or 43 cents a
share, from $115.3 million, or 37 cents a share, a year earlier. The
earnings included 5 cents a share in charges related to costs from
closing stores and other items.
Excluding the charges, Office
Depot’s earnings of 48 cents a share topped analysts’ mean estimate by
4 cents, according to Thomson First Call.
Sales rose just 3% to
$3.82 billion from $3.70 billion last year, slightly shy of Wall
Street’s target of $3.86 billion. North American retail same-store
sales advanced 3%.
The company’s gross profit as a percentage of
sales was 31.5%, a 40-basis-point improvement over a year ago. Gross
margin improvements in the North American retail division, which was
helped by cost cuts and increased private-brand sales, helped offset a
decline in margins at the company’s business solutions segment.
Office
Depot has been undergoing a round of cost-cutting, including store
closings and consolidations, after bringing in CEO Steve Odland from
AutoZone  last year to help boost profits. At AutoZone, Odland was
known for focusing on margin improvements and profitability over sales
growth.

[Author]

May 5, 2006 at 11:28 AM