Office Depot reports Q2 loss

Boca Raton, Fla. -- Office Depot reported a net loss, as well as declining total sales and same-store sales, during a disappointing second quarter of fiscal 2013. The retailer’s net loss of $64 million was the same net loss it reported in the second quarter of fiscal 2012. Excluding pre-tax charges, including some relating to the planned OfficeMax merger, and non-cash store asset impairment charges, the net loss would have been $28 million.

Same-store sales dropped 4%, largely driven by decreased sales of technology and peripherals, particularly mid-priced laptops as the market continues shifting away from laptops and toward tablets. Total sales were $2.4 billion, down 4% compared to about $2.5 billion in the second quarter of 2012. Exits from some countries in the international division offset a small sales increase caused by a favorable shift in the timing of Easter.

“Our second quarter results came in largely as expected, as we remain focused on executing against our multi-year strategic plan,” said Neil Austrian, chairman and CEO of Office Depot. “Sales continue to be impacted by a sluggish technology category, particularly laptops, as well as ongoing budgetary pressure on our federal accounts. Despite these headwinds, however, we were pleased with our cost reduction actions and progress on our key initiatives. In addition, we remain actively engaged in integration planning related to the proposed merger with OfficeMax, which we continue to expect to close by the end of the year.

On July 10, 2013, shareholders of Office Depot and shareholders of OfficeMax approved the merger of the two companies, including the issuance of Office Depot common stock to OfficeMax stockholders pursuant to the merger agreement. The merger is not final until the receipt of certain regulatory approvals and completion of other customary closing conditions.


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