Office Depot 2018 sales increase 8 percent

Office Depot sales increased 3 percent for the fourth quarter and 8 percent for 2018, the Boca Raton-based office-supply retailer said Wednesday.

Adjusted quarterly earnings of 9 cents beat Wall Street forecasts by 1 cent. Office Depot stock closed Wednesday at $3.59, up 32 cents or 9.63 percent a share on Nasdaq.

Sales for the quarter were $2.67 billion compared with $2.58 billion in the fourth quarter 2017. For the year, sales were $11 billion compared with $10.24 billion in 2017.

Gerry Smith, chief executive officer of Office Depot, said 2018 was a transformation year for Office Depot, which is striving to become a business services company. Office Depot saw a 24 percent increase in its “buy online, pick up in store” sales, which included about 10 million businesses.

Smith said on a conference call with Wall Street analysts that Office Depot would open co-working spaces in two new stores, in Chicago and Dallas in March. The retailer currently has a co-working space in a Los

Gatos, Calif., store, near San Francisco.

The CEO declined to comment on competitors’ recent moves that include Staples’ 2018 acquisition of Illinois-based office supplier Essendant. A planned merger between Office Depot and Massachusettsbased Staples failed and was terminated in 2016.

“We’re going to stick to our strategy and we think we have a winning strategy,” Smith told analysts.

Still, retail store sales in the quarter were down 6 percent compared with the same quarter in 2017, and comparable same-store sales — those open at least a year -- were down 5 percent. Office Depot said an accounting change in how it recognizes revenue affected overall sales.

Office Depot employs about 2,000 people at its headquarters in Boca Raton, as well as workers at stores in South Florida.

The retailer said it opened one new store, replaced one store, and closed 13 stores in the quarter, ending with a total of 1,361 stores across the country. A store in Marathon was the only one in South Florida that was closed, according to company spokesman

Danny Jovic.

The company posted a loss for the quarter but not for the year.

Office Depot said it had a quarterly loss of $14 million, or 2 cents a share, compared with a loss of $48 million and 9 cents a share in the fourth quarter of 2017. Fourth quarter 2018 results included a $15 million loss related to refinancing of a company loan, the company said.

For the year, net income was $99 million, or 18 cents a share, compared to net income from continuing operations of $146 million, or 27 cents a share, in 2017.

Office Depot saw a 1 percent increase in 2018 sales from its CompuCom division. The company acquired South Carolinabased CompuCom, an IT provider for businesses, for $1 billion in 2017, which was a controversial move for then-new CEO Gerry Smith.

Smith acknowledged he wasn’t pleased with CompuCom’s performance, but said some cost-cutting and cross-selling opportunities would improve the division.