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Office Depot 2002 Sales, Profits Rise

2/13/2003 09:40:00 AM Eastern

Delray Beach, Fla. - Office Depot ended 2002 on an up note posting quarterly and yearly profits, although sales in its North American stores slipped during these periods.

The office supply chain had net earnings of $62.0 million on sales of $2.9 billion for the fourth quarter and a profit of $310.7 million for 2002 on sales of $11.4 billion. Profits for the same periods in 2001 were $40.3 million on sales of $2.8 billion and $201 million on sales of $11.1 billion.

However, its North American retail operation did not fair as well with sales falling 3 percent in the fourth quarter, ended Dec. 28, to $1.4 billion and for the year dipped 1 percent to $5.8 billion. The company did boost its operating profit for this segment during both periods to $82.2 million and $419.7 million, respectively. Comparable store sales for the 848 U.S. and Canadian stores declined 4 percent, the company said, primarily due to a disappointing 2002 holiday season and falling sales of furniture and technology products. Desktop PCs and notebook sales took a particular beating falling 17 percent in the fourth quarter and 10 percent for the year.

Store foot traffic and average transaction size was down from 2001, the company reported.

'We believe our 2002 results provide strong evidence of our ability to generate solid earnings growth, even in spite of a challenging sales environment in our North American retail stores,' said Bruce Nelson, Office Depot's chairman and CEO.

Office Depot managed to stay in the black through gross margin gains, tight inventory control practices and dramatic improvement in the company's business services group.

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