Office Depot narrows second-quarter loss, but revenue still down

Office Depot narrows 2Q loss, but revenue down

BOCA RATON, Fla. — Office Depot Inc. narrowed its loss in the second quarter on tax benefits and cost cutting but the office supply retailer’s sales continued to fall.

Results sent shares down 7 percent in midday trading.

Office Depot has been undergoing a restructuring as it deals with weak sales in the U.S., brought on by the slumping economy. The office-products sector as a whole has been pressured as both shoppers and small businesses cut back on non-necessities.

The company said Tuesday it posted a loss after paying preferred stock dividends of $18.7 million, or 7 cents per share, in the three-month period ended June 26, which included significant tax benefits. In the same period last year, the company lost $82.6 million, or 31 cents per share.

Revenue fell 4 percent to $2.7 billion from $2.82 billion. North American retail revenue fell 2 percent to $1.1 billion. The average value per order rose, but the number of transactions was still down from last year. Sales at stores open at least a year fell 1 percent in the quarter. That’s considered a key measure of retailer health because it measures growth at existing stores rather than newly opened ones.

Sales in the company’s unit that caters to businesses in North America tumbled 6 percent to $820 million in the quarter. International sales fell 6 percent to $778 million partially due to the stronger dollar.

Analysts had predicted a steeper loss of 17 cents per share on revenue of $2.74 billion, according to Thomson Reuters.

Shares fell 32 cents, or 6.6 percent, to $4.42 during midday trading. The stock has traded between $3.86 and $9.19 during the past year.