Office Depot is Off

Office Depot (Delray Beach, Fla.) announced that its operating profits in its fiscal fourth quarter fell more than 15 percent from a year ago.

Though sales rose 14 percent for the three-month period ending Dec. 27, 2003, same-store sales declined 2 percent. The company also blamed the profit slip on charges incurred from closing some stores during the period. But it remained upbeat about its future.

Chairman and ceo Bruce Nelson declared that “2003 was a year of both significant accomplishment and continued challenges. With the financial impact of negative retail comps throughout the year, our North American retail business reported a $106 million decrease in segment operating profit compared to 2002. However, our North American delivery businesses and our international operations grew their combined segment operating income by $182 million, or 32 percent, over 2002, more than enough to make up the shortfall in retail and indicative of the earning power of the company when our retail business improves, as we anticipate it will in 2004.

“We now expect our North American retail business to comp positive in the first quarter, and to accelerate throughout the year. We remain relentlessly focused on accelerating growth in our North American retail business, with new merchandise assortments and initiatives, new store formats, potentially aggressive store remodeling program and the accelerated openings of new and smaller stores in our core markets.”

For fiscal 2003, the office supplies retailer saw a 9 percent growth in sales, but a 2 percent decline in same-store sales worldwide.

It expressed confidence in 6-8 percent sales growth in 2004, the opening of 70-80 new stores and the completion of 50-60 remodels to its new Millennium concept.