Office Depot Posts Reduced Fiscal Q2 Loss - Twice

Office Depot Posts Reduced Fiscal Q2 Loss

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Boca Raton, Fla.  - Office Depot reported a reduced loss and lower sales in its fiscal second quarter, ended June 26, 2010.

Sales in the second quarter of 2010 were $2.7 billion, a 4 percent decrease year on year. Office Depot reported a loss of $19 million in quarter, compared with a loss of $82 million in the second quarter of 2009.

Operating expenses decreased by approximately 8 percent from the second quarter of 2009.

"Our second-quarter operating results exceeded our expectations due to strong execution in North American retail, North American direct and the international division," said Mike Newman, Office Depot's chief financial officer. "We're pleased that these results include year-over-year gross profit margin improvement, marking the fourth consecutive quarter of such improvement."

For the North American retail division, sales were $1.1 billion, a decrease of 2 percent compared with the same period last year. Comp-store sales in the 1,132 stores in the U.S. and Canada that have been open for more than one year decreased 1 percent for the second quarter compared with the prior year period. Although the average order value increased in the second quarter of 2010, customer transaction counts were down compared with the second quarter of 2009.

The North American retail division reported operating profit of $9 million in the second quarter of 2010, compared with a loss of $13 million reported in the same period of the prior year. The operating profit improvement was driven by favorable product margins and the absence of a $5 million charge recognized in the second quarter of 2009 to reflect updated assumptions on subleases of closed stores.

During the second quarter of 2010, Office Depot closed four stores and opened seven, bringing the total store count for North America to 1,152 as of June 26.

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