Office Depot Fiscal 4th Quarter Sales Jump 8%

Delray Beach, Fla. — Posting both improved sales and profitability in its North American retail business — including its best retail comp-sales performance in nearly five years — Office Depot claimed a fiscal fourth-quarter North American sales increase of 8 percent, hitting $1.5 billion, up from $1.4 billion in the same quarter in 2003.

North American retail operating profit climbed to $99.5 million in the fourth quarter, ended Dec. 25, more than double the $48.4 million recorded in the previous year.

Improved technology category sales drove a 4 percent positive North American comp-store sales comparison in the fourth quarter over the same three months a year earlier, but this scenario also had a negative impact on product margins. Gross margin in the fourth quarter and full year improved slightly as increased vendor rebates and promotional support and reduced inventory clearance charges were partially offset by a higher mix of lower margin technology products.

Comparable average transaction size for North American stores increased in the fourth quarter, but comparable transaction counts decreased for both the fourth quarter and the full year.

Office Depot North American sales rose 5 percent in the 12 months, reaching $5.9 billion, up from $5.7 billion in 2003. Comp-store sales increased 3 percent.

Consolidated Office Depot sales grew 7 percent in the fourth quarter, hitting $3.5 billion, compared with $3.3 billion in the same three months in 2003. Worldwide comp-store sales edged upward 2 percent. Net earnings for the quarter were $52.8 million, up from a year-earlier $45.8 million.