Office Depot Inc. (NASDAQ: ODP) reported its third-quarter financial results before the markets opened on Wednesday. The company said that it had $0.16 in earnings per share (EPS) and revenue of $2.84 billion. The consensus estimates from Thomson Reuters had called for EPS of $0.15 and $3.49 billion in revenue. In the same period of last year, the retailer posted $0.16 in EPS and $3.69 billion in revenue.
Retail Division sales were $1.5 billion in the third quarter of 2016, compared to $1.6 billion in the prior-year period. Operating income for this segment was $105 million, or an increase of 7.1%.
At the same time, Business Solutions Division sales totaled $1.3 billion in the third quarter of 2016, a decline of 6% compared to the prior year period both as reported and in constant currency.
The company repurchased approximately 16 million shares of its outstanding common stock during the third quarter at a total cost of $55 million. The company has repurchased roughly 23 million shares so far in 2016 at a total cost of $81 million, with $169 million remaining available for repurchase under the current $250 million authorization.
In terms of guidance, total company sales in the fourth quarter of 2016 are expected to be lower than 2015, primarily due to the impact of store closures, previous contract customer losses during the prolonged Staples acquisition attempt and continued challenging market conditions. Office Depot continues to expect to generate between $450 million and $470 million in adjusted operating income in fiscal 2016.
The consensus estimates are $0.10 in EPS and $3.44 billion in revenue for the fourth quarter.
Roland Smith, board chair and chief executive for Office Depot, commented:
During the third quarter we made substantial progress on the opportunities identified in our new three year strategic plan. We announced a deal to sell our business in Europe and have a process underway to sell substantially all of the remaining international businesses. We also realigned our organization to create a more efficient and effective operating structure that is focused on aggressively implementing a number of growth and profitability initiatives in our North American business. We are recovering quickly from the disruption caused by the protracted Staples acquisition attempt, and I’m very pleased with both our progress and financial results. Importantly, I believe we have the right strategy in place to deliver shareholder value.
Shares of Office Depot traded up nearly 14% to $3.47 on Wednesday, with a consensus analyst price target of $4.97 and a 52-week trading range of $3.01 to $7.91.
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