On Wednesday, Office Depot, Inc. (NASDAQ: ODP) reported a sharp decline in second quarter profit compared to the year prior, falling short of Wall Street analysts’ expectations for the quarter.
The company reported a net income of $24 million, or on a per-share basis, a profit of 5 cents. Earnings, adjusted for one-time gains and cost, were 6 cents per share. Analysts, on average, had expected gains of 9 cents per share. In 2016, the office supply retailer posted profits of $210 million, or 38 cents per share.
On a continuing operations basis, net income was $21 million or $0.04 per share, down from $232 million or $0.41 per share a year ago. The company said the prior year results were benefited from $250 million of income related to the Staples termination fee received in the period.
Total reported sales for the second quarter dropped 9 percent to $2.36 billion from $2.58 billion last year. Analysts expected sales of $2.44 billion for the quarter.
Looking ahead, for fiscal 2017, Office Depot said it continues to expect total company sales to be lower than 2016, primarily due to the impact of planned store closures, prior year contract customer losses, continued challenging market conditions and returning to a 52-week fiscal year. However, the company expects the rate of sales decline to improve in the second half of 2017.
Gerry Smith, chief executive officer of Office Depot, said, "… we remain on track to achieve our full year target. Longer term, we are maintaining our focus on executing initiatives to strengthen our existing business, expanding our last-mile advantage, while evaluating opportunities to transform the company for future growth."
The company continues to expect adjusted operating income of approximately $500 million in fiscal 2017, representing a comparable year-over-year increase of about 10%.
Office Depot shares closed Tuesday's trading at $6.11, down 0.97 percent. Shares gained around 7.4 percent in the after-hours trading.