Office Depot to Close 21 Percent of Stores

Office Depot

IMG: Zen Sutherland via Flickr.

Office Depot is planning to close about 21 percent of their U.S. stores, which will end up being around 400. Their merger with Office Max last November resulted in an overlap of retail locations that can be consolidated.

“This stock looks to be a beat and raise story throughout 2014,” Janney Capital Markets analyst David Strasser wrote in a note, implying Office Depot was being cautious in its forecast.

The combined company’s financial results beat Wall Street estimates for the January-March quarter and it raised its full year forecast for operating income on Tuesday. Their shares increased by 17 percent the morning of the trade.

“The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio, while maintaining the retail presence necessary to serve our customer,” Chairman and CEO Roland Smith said.

150 stores are expected to close this year, and all store closures are anticipated to happen by the end of 2016.

“Same-store sales were down 4 percent last quarter so (this is) definitely a move in the right direction … despite all of the headwinds,” Smith said.

Analysts on average had expected a profit of 3 cents per share on sales of $4.28 billion, according to Thomson Reuters.

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About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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