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Office Depot Q1 North American Retail Operating Profit Soars

DELRAY BEACH, FLA. – Despite ongoing softness in sales, results at Office Depot for the first quarter reflect strong operating performance across all business units.

Sales in the North American Retail division were flat for the three months, coming in at $1.62 billion, compared with $1.61 billion in the year-ago period. Operating profit for this division reached $123.6 million, up from $76.2 million in the same quarter in 2001.

The office products retailer said the first quarter of 2002 marked the fifth consecutive three-month period of North American Retail comp-store sales improvement, although comps declined 1.7 percent during the three months ended March 30. Overall comp sales were dragged down by an 18 percent decrease in comp sales of desktop and laptop computers.

Gross margins for the retail segment improved by 312 basis points year over year, although store operating costs were 23 basis points higher than last year.

Overall Office Depot sales edged up 1 percent, reaching $3.04 billion, compared with $3.02 billion in the same three months in 2001.

Operating income for the company was $164 million, an increase of 69 percent over the $97 million recorded a year earlier. Net earnings hit $102.7 million in the first quarter, compared with $56.3 million year over year.