Soft Sales Slam Office Depot
7/2007
Shares of Office Depot tumbled more than 7% Thursday after the
retailer reported a drop in second-quarter profits and
weaker-than-expected sales.
Office
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.
North
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.