Delray Beach, Fla. — Office Depot second quarter North American retail sales were up 1 percent to $1.5 billion, but the retailer reported comp-store sales were down 5 percent.
For the quarter Office Depot generated $3.6 billion in sales with overall net earnings of $109.1 million, down from the $118.3 million posted during the same period last year.
The company blamed softness in the U.S. economy for the falloff in sales, particularly the problems facing the U.S. housing market which directly impacted Office Depot’s furniture and supplies sales. This also affected technology sales, although to a lesser extent, the company said. High fuel costs also played a role in keeping sales in North America flat.
Comp-store sales were also hurt by Office Depot’s decision not to repeat certain promotions that it had held during the second quarter of 2006 because they did not generate an acceptable profit margin.
Other notes for the quarter:
· Operating profit margins increased to 6.8 percent from 6.4 percent the prior year.
· Average ticket size increased slightly and the comp-store decline was entirely driven by a reduction in the number of transactions.
· Comparable average sales per square foot were $219 for the quarter.
· Inventory per store was $965,000 as of the end of the second quarter of 2007, 3 percent lower than the same period last year. On an average basis, inventory per store was $1.017 million for the second quarter of 2007, 4 percent higher than the same period last year.
