Office Depot's Comps Off 1% In Q2 - Twice

Office Depot's Comps Off 1% In Q2

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Delray Beach, Fla. - Softer-than-expected comp-store sales in May and June took a toll on office products giant Office Depot.

The retailer reported its Stores Division - which does more than half the company's dollar volume - showed comp-store sales for the 751 locations in the United States and Canada declined by 1 percent in the second quarter ended June 24. The company now has 855 stores in North America.

Store operating profit for the Stores Division also took a big hit, declining 19 percent to $103 million in the second quarter, compared to $127 million in the same period last year.

Sales in the Stores Division showed more positive results, climbing 8 percent in the second quarter to $1.4 billion, up from $1.3 billion in the year-ago period.

Total net income for the chain, including other units, dropped nearly 20 percent for the second quarter, down to $57.9 million from $74.1 million in the same period last year. Included in the second-quarter results were merger and restructuring costs of $3.4 million for 2000 and $12.7 million for 1999. Total sales for the second quarter climbed 12 percent to $2.6 billion, compared to $2.3 billion in the year-ago period.

Online sales at Office Depot also enjoyed good growth during the second quarter, soaring 161 percent to $183.5 million, up from $70.2 million during the same three months in 1999.

Sales in the Stores Division for the six-month period increased 12 percent to $3.2 billion, compared to $2.9 billion during the year-ago period. Comp-store sales were up 2 percent for the first half, while store operating profit declined about 5 percent to $259.9 million, compared to $275.3 million for the same three months in 1999.

Total net income at Office Depot for the six-month period was $167 million, down about 5 percent from the $174.7 million recorded in the first six months of 1999. Included in the results for the six months of 2000 were $4.4 million of merger and restructuring charges and a gain on the sale of an investment of $19 million.

Total sales for the first six months jumped 15 percent to $5.7 billion from $5 billion in the first half of 1999.

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