Office Depot to Close 300 More Stores
August 03 2016 - 8:30AM
Dow Jones News
Office Depot Inc., three months after its proposed tie-up with
larger rival Staples Inc. failed regulatory muster, said it would
launch a quarterly dividend and close an additional 300 stores as
it charts a course for remaining a stand-alone company.
Office Depot completed its strategic review of the business and
announced moves such as growing its contract channel, optimizing
retail operations in North America, implementing multiyear cost
reductions and returning capital to shareholders.
Meanwhile, the company said Wednesday it swung to a profit in
the latest period, though revenue slipped. The earnings results, on
an adjusted basis, missed Wall Street expectations.
The company plans to trim $250 million in costs by 2018 and
initiated a quarterly dividend program at 2.5 cents a share,
payable on Sept. 15 to shareholders of record by Aug. 25. The
company didn't specify job cuts were part of its plan to trim
expenses but said it would lower overall general and administrative
costs.
Office Depot closed 42 stores in the second quarter, ending the
period with 1,513 stores in North America as part of its earlier
plan to close 400 stores. But Wednesday it said it would close an
additional 300 stores on top of that.
Office Depot's results have been weighed down recently amid a
declining market as an increasingly digital workplace continues to
hurt sales.
Staples agreed in February 2015 to buy Office Depot for about
$6.3 billion. In 2013, the U.S. Federal Trade Commission approved
Office Depot's takeover of the smaller OfficeMax. But the FTC
argued its tie-up with Staples would mean higher prices and fewer
options for big companies that buy office supplies in bulk.
In all for the June quarter, Office Depot earned $210 million,
or 38 cents a share, compared with a year-earlier's loss of $58
million, or 11 cents a share. Excluding items, earnings were three
cents a share, compared with six cents a year earlier. Revenue
slipped to 6% to $3.22 billion.
Analysts surveyed by Thomson Reuters had projected per-share
earnings of six cents on revenue of $3.21 billion.
Shares were inactive in premarket trading.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 03, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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