DELRAY BEACH, FLA. -The sales performance for Office Depot's North American Retail Division continued to trend downward during the months of October and early November, causing the retailer to say that it now expects negative fourth-quarter comp-store sales for its 782 North American locations open for more than one year.
If current trends continue, Office Depot believes comp-store figures for the fourth quarter could be in the negative mid-single-digit range. This is down from the company's expectations released in July, when management expected comp-store sales to be flat in the fourth quarter.
"While we are seeing some softness in many categories, comp-sales performance in our North American retail stores continues to be impacted by weakness in desktops, laptops, monitors, printers, and the related 'market basket' of higher-margin goods historically linked to purchases of these items," said CEO Bruce Nelson.
Nelson also mentioned higher warehouse costs, compared with earlier-year plans, and the negative currency translation over last year as reasons for lower results. "If these trends continue, combined with the anticipated highly competitive environment for technology products during the upcoming holiday season, we could expect to see further pressure on earnings from ongoing operations," he said.
The retailer pinpoints its primary difficulties in North American stores, reporting that the balance of its business continues to be "quite strong."