Office Depot reports wider quarterly loss

By Palm Beach Business.com

BOCA RATON — Office Depot continued to bleed red ink during the second quarter but said it continued to have a positive cash flow through the period.

The office supply retailer said it lost $83 million, or 31 cents, on revenue of $2.8 billion, compared with a loss of $2 billion, or a penny a share, on revenue of $3.6 million.

For the six months, the company has lost $137 million or 51 cents a share, on revenue of $6.1 billion.

“Second quarter business results met our expectations given the challenging economic conditions and the period’s normal seasonality,” Chief Financial Officerd Mike Newman said. “However, the successful execution of our liquidity initiatives generated positive cash flow before financing activities in the second quarter, significantly exceeding our expectations.”

Investors dropped the stock 97 cents to $4.38.

Second quarter sales in the North American Retail Division dropped 21 percent to $1.1 billion, in part because the company has closed 114 stores during the intervening year. However comparable store sales dropped 18 percent over the same period a year ago.  Operating losses hit $13 million, up from $4million a year ago.

Office Depot said consumers and small businesses continue to cut spending, especially on larger items such as computers and furniture.

During the second quarter, Office Depot closed five stores, opened three and moved one store, bringing the total store count for North America to 1,158 as of June 27, the close of the quarter.

Second quarter sales in the North American Business Solutions Division were $868 million, down 18 percent compared to the same period last year, driven again by cutbacks in spending by customers. The division did produce an operating profit of $23 million down from $49 million a year ago.

International sales fell by 25 percent to $830 million during the quarter, and operating profit fell to $3 million from $51 million a year ago.