Office Depot Q1 profit surges
Office Depot’s profit in the first quarter more than doubled as its reduced store count led to lower operational costs.
The company's net income increased to $116 million, or 22 cents per share, in the quarter ended April 1, from $46 million, or 8 cents per share, in the year-ago period. Its results beat analysts’ expectations.
Total net sales fell 7% to $2.68 billion from $2.88 billion. Sales in North America fell nearly 10% to $1.36 billion, mainly due to lower customer visit. Same-store sales fell 5%, higher than the Street forecast.
Office Depot had 1,439 stores in North America at the end of the quarter, compared to 1,555 stores in the year earlier quarter. The retailer has previously said it plans to close about 300 more stores in the next three years.
Office Depot has been selling its international units to focus on growth in North America. It recently reached an agreement to sell its business in Australia and New Zealand. The company also announced on April 26, 2017 the completed sale of its business in South Korea. The company’s international business located in mainland China continues to be actively marketed for sale.
“I am very pleased that we continued our positive momentum into the new year and delivered a strong earnings performance in the first quarter,” said Gerry Smith, CEO of Office Depot. “The company completed its sale of South Korea in late April and also entered into a favorable agreement to sell the operations located in Australia and New Zealand. Going forward, our focus is on executing against our strategic initiatives to grow the North American business.”
The company said it expects sales in 2017 to be lower than 2016 due to the impact of store closures and challenging market conditions.
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