=Office Depot (ODP) reported earnings on Wed 9 Aug 2017 (b/o)

Office Depot misses by $0.02, misses on revs; affirms outlook

• Reports Q2 (Jun) earnings of $0.06 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $0.08; revenues fell 8.5% year/year to $2.36 bln vs the $2.44 bln Capital IQ Consensus.
  • Retail Division
    • Retail Division sales were $1.1 billion in the second quarter of 2017 compared to $1.2 billion in the prior year period. The decline in sales was due to the impact of planned store closures over the past twelve months and a 6% decline in comparable store sales in the quarter versus the prior year due primarily to lower store traffic and average order value of purchases.
  • Business Solutions Division
    • Business Solutions Division sales were $1.2 billion in the second quarter of 2017, a decline of 6% in constant currency compared to the second quarter of 2016. The sales decline was primarily driven by continued competitive pressures, prior period customer losses in the contract channel, the ongoing reduction in catalog sales through our call centers and the impact of sales from omnichannel programs that are recorded in the Retail Division.
• Outlook:
  • Office Depot continues to expect total company sales in 2017 to be lower than 2016, primarily due to the impact of planned store closures, prior year contract customer losses, continued challenging market conditions and returning to a 52-week fiscal year. However, the company expects the rate of sales decline to improve in the second half of 2017 based on improvements in customer retention, implementation of new customer wins and growth from strategic business initiatives.
  • The company continues to expect adjusted operating income of approximately $500 million in fiscal 2017. This includes funding a number of strategic initiatives and opportunities to grow the business throughout the year. The 2017 target is a comparable year-over-year increase of about 10%, excluding the $15 million estimated 53rd week operating income benefit realized in 2016.