Office Depot sheds stores, boosts profits

Boca Raton-based Office Depot continued in the first quarter on its quest to increase profits, while sales fell due to store closures.

CEO Gerry Smith said he was pleased with the “positive momentum” of the “strong earnings performance” in the new year.

In a conference call, Smith stressed that he views the remaining 1,400 stores in North America as “distribution points” for “buy online, pick up in store sales,” which grew in the quarter.

“I view our retail store base as an asset, not a liability,” he said. Smith said Office Depot will add more products and services to leverage what he sees as the company’s competitive edge to online sellers — using stores as additional distribution centers.

Smith also said Office Depot has completed converting 30 stores to its “store of the future” design, which focuses on services including tech and printing, and has plans in the second quarter to convert an additional 16 stores.

Office Depot reported quarterly profits of $116 million, or 14 cents a share, compared with $46 million, or 11 cents a share in the year-ago quarter.

Quarterly sales were $2.7 billion, down 7 percent from $2.9 billion in the same period in 2016.

Office Depot’s North American retail division had sales of $1.4 billion compared with $1.5 billion in the first quarter of 2016. Comparable store sales, or those open more than a year, declined by 5 percent .

The retailer closed two stores during the quarter, with previously announced plans to close an additional 300 stores over three years.

Office Depot recorded $3 million in severance expense during the quarter associated with its restructuring. While the company confirmed layoffs at its headquarters in January, it didn’t release a number to the state.

Jessica Del Vecchio, economic development