Rough day for office supply retailer Office Depot (NYSE: ODP) yesterday. The firm saw its shares fall slightly more than 13% after reporting a fourth-quarter loss of $5.64 per share. A year ago, ODP raked in a profit of seven cents per share, a stark turnaround thanks to the current economy. These results included charges of $4.54 per share and 37 cents per share, all of which stemmed from costs to close certain facilities, cut jobs and write-down assets. Adjusting the results for these changes, ODP lost 73 cents per share - still much larger than the six-cent loss expected by the Street.Quarterly sales slumped 15% to $3.27 billion from last year's sales of $3.87 billion. Breaking the sales down a bit, the sultan of staples saw its sales in North America fall 17% - with international sales slipping 15%.
ODP expects to close 118 stores this year, including 112 closings announced in December. The firm will open 15 new stores, down from an earlier-announced 20 new stores and roughly half of ODP's initial plans. The firm's North American president, Chuck Rubin, noted that the company "would prefer not to open new stores this year, but we have lease commitments which were pushed out from 2008 that require us to open within a set period of time."
ODP shares are currently slugging their way through the $2 region, and the picture isn't very bright. The stock's 10- and 20-month moving averages lurk overhead, with the former sliding through the upper $5 region. With these trendlines approaching, it doesn't look like ODP is going to enjoy a rally anytime soon.
If there is any good news for ODP, it is that a majority of the analysts tracking the firm rate it a "hold" or worse. Rankings of this sort could lead to momentum-lending upgrades. Unfortunately, ODP's performance isn't likely to inspire such moves.
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