Office Depot swings to net loss, but adjusted earnings beat Street
Shares in the company were lately up almost 16 per cent to $2.91 Tuesday afternoon.
For the three months that ended September 29, the provider of office supplies and services posted a net loss of $70 million, or 25 cents per share, available to common stockholders, compared to net earnings of $92 million, or 28 cents per share, a year earlier.
The latest results included around $8 million of charges related to restructuring activities, and roughly $88 million in non-cash asset impairment charges, while the prior-year period had a large benefit from a tax effect.
Excluding these items, third quarter earnings were $18 million, or 6 cents per share, up from a net loss of $0.7 million, or breakeven per share, a year ago.
Quarterly sales fell 5 per cent to $2.69 billion, and missed analyst expectations. On a constant currency basis, third quarter sales were down around 3 per cent versus the prior year period.
Analysts surveyed by Thomson Reuters expected a profit of one cent a share and revenue of $2.73 billion.
Total company gross profit margin increased around 90 basis points to 31 per cent, with increases recognized in North American retail and North American business solutions, the company said.
The North American retail unit reported sales of approximately $1.2 billion, a decrease of 5 per cent compared to the prior year. Comparable store sales in the 1,090 stores that were open for more than one year fell 4 per cent.
The North American business solutions division saw sales of $827 million, a 1 per cent increase. The international unit posted sales of $692 million, down 12 per cent in U.S. dollars and a decrease of 4 per cent in constant currency compared to the prior year quarter.
Operating expenses increased by $54 million in the third quarter.
Office Depot provides office supplies and services through 1,675 worldwide retail stores. It employs about 39,000 associates and serves customers in 60 countries around the world.