Austrian opens Depot account with tough Q3

Office Depot has announced a small increase in sales after a challenging Q3.

Total sales for the company, which were lower than expected, lifted 3 per cent to $3.3 billion. North American retail comp sales rose 1 per cent, while worldwide comp sales were flat.

Net profit for the quarter fell from $91.7 million, or EPS of $0.29, to $89.9 million, or EPS of $0.28, beating analyst estimates by a penny.

Neil Austrian, Office Depot’s acting chairman/CEO, said: "Our third quarter was challenging on many fronts. Softening in our European business, disruptions associated with several hurricanes in the US and lower than expected back-to-school sales combined to negatively impact our financial performance.

"But despite these challenges, we improved the profitability of our North American retail and business services group segments through several on-going merchandising initiatives as well as a broad-based focus on expense management," he added. Looking ahead, Austrian reaffirmed FY earning estimates of $1.08-$1.14.

In a different development, Office Depot has announced plans to outsource most of its call-centre operations, a move that will affect 900 jobs, according to a Reuters report.

The company plans to close three facilities, and said it expects to pay $12.9 million in severance pay to employees and other costs over the next year.

Delray Beach (FL)