Boca Raton, FL: Office Depot (ODP NYSE)
Office Depot reported disappointing Q3 sales results. Office Depot’s North American retail and contract/delivery (BSD) sales declined for the 15th consecutive quarter.
Office Depot which has been plagued by an unending stream of investigations into its contract pricing also saw North American retail sales fall 4% and contract sales fall 3%, with overall BSD sales falling 2%. International Sales again was Office Depot’s lone bright spot with a year to year increase of 1%. During Office Depot’s Q3 2011 Results - Earnings Call - Kevin Peter (President North America) admitted that the majority of contract sales revenue that has been lost has emanated from the national U.S. Communities contract loss. Previously Office Depot had down played the significance of losing the national contract that had been valued at $500 million annually. Office Depot has been struggling to retain public sector business under a cloud of investigations and settlements into their pricing practices with state and local government agencies. Total Company sales for the third quarter of 2011 were $2.8 billion, a 2% decrease compared to the third quarter of 2010. Third quarter 2011 sales in the North American Retail Division were $1.2 billion, down 4% from the prior year. Third quarter 2011 sales in the North American Business Solutions Division were $821 million, a 2% decrease compared to the third quarter of 2010. while sales in the contract channel declined 3%, consistent with the declines experienced earlier in the year from customers not retained during the January 2011 transition to new public sector purchasing consortiums.
Though Office Depot has been able to increase profits through cost cutting and austerity measures, analysts and investors remain troubled by the 15 consecutive quarters of sales declines in North America Retail and Delivery. Reference:http://finance.yahoo.com/news/Office-Depot-Announces-Third-bw-1267479011.html?x=0&.v=1 |
