Office Depot Reports Q2 Loss, Lower Sales

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Delray Beach, Fla. — Office Depot reported a 1 percent sales drop and a $2 million loss for the second quarter, as well as softness in its North American retail division.

Total company sales for the second quarter, which ended June 28, decreased 1 percent to $3.6 billion. Office Depot’s net loss of $2 million in the second quarter of 2008 is in comparison to earnings of $106 million in the same period of 2007.

In its North American retail division, second-quarter sales were down 6 percent to $1.4 billion. Comp-store sales in the 1,178 stores in the United States and Canada that have been open for more than one year decreased 10 percent for the second quarter.

The North American retail division had an operating loss of $4 million for the second quarter, a decline from the operating profit of $99 million in the same period of the prior year.

Persistent weakness in Florida and California continued to weigh heavily on results; however, the sales decline in these two states is consistent with what has been reported over the past few quarters, the retailer said.

Outside of those two states, a further decline in demand has occurred as this economic slowdown has spread to most regions of the country, the chain stated.

During the second quarter, Office Depot opened six new stores, closed one and relocated three stores, bringing the total store count to 1,272; the chain also remodeled two stores in the quarter.

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