The loss generated by the No. 2 U.S. office-supplies retailer /quotes/comstock/13*!odp/quotes/nls/odp ODP +5.07% amounted to $5.41 million, or 5 cents a share, compared to a profit of $29.5 million, or 7 cents a share, in the company’s year-earlier first quarter.
Sales for the three months ended March 26 fell to $2.97 billion from $3.07 billion a year earlier. Excluding charges, the company said results broke even for the latest quarter.
Analysts polled by FactSet Research had expected a profit of 2 cents a share on revenue of $2.98 billion, on average.
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The office-supplies market, in which demand is tied closely to business spending and employment, has been under pressure with U.S. employment still struggling to recover, analysts said. Still, they said Office Depot has fared worse than either larger rival Staples Inc. /quotes/comstock/15*!spls/quotes/nls/spls SPLS +2.45% or smaller competitor OfficeMax Inc. /quotes/comstock/13*!omx/quotes/nls/omx OMX +1.46%
The Boca Raton, Fla.-based company has said it’s restating results because the Internal Revenue Service has “denied its claim to carry back certain tax losses to prior tax years.” Shares of Office Depot had moved lower in premarket trading but made gains shortly after the opening bell on Wall Street.
‘Muted recovery’
Office Depot’s “sales trends are reflective of a muted recovery and continued share losses,” said Citigroup analyst Kate McShane. “We view [its] results as a modest incremental positive” for Staples.North American retail unit sales fell 2% to $1.3 billion for Office Depot. Same-store
Canada dropped 1%.
Average transaction order rose slightly, while customer transaction counts declined in part due to recent winter weather, Office Depot said.
Operating profit in the unit dropped to $58 million from $73 million, hurt in part by incremental advertising expenses.
North American sales to businesses fell 3% to $806 million, hurt by lower customer transaction counts. Profit also dropped, sinking to $16 million from $20 million, in part because of increased marketing costs.
International sales fell 5% in the latest quarter, to $846 million, according to Office Depot.
Source Link:http://www.marketwatch.com/story/office-depot-swings-to-unexpected-loss-2011-04-26?link=MW_latest_news
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