(Reuters) - Office Depot Inc said it would close at least 400 stores in the United States over two years as it looks to consolidate operations after acquiring OfficeMax, and the company raised its forecast for full-year adjusted operating income.þþShares of Office Depot, which also reported better-than-expected quarterly results, rose as much as 20 percent in early trading. The stock was among the highest percentage gainers on the New York Stock Exchange on Tuesday.þþÿThis stock looks to be a beat and raise story throughout 2014,ÿ Janney Capital Markets analyst David Strasser wrote in a note, implying Office Depot was being cautious in its forecast.þþThe closure of the 400 stores will start adding to profit in 2015 and is expected to lead to annual run-rate savings of at least $75 million by the end of 2016, Office Depot Chief Executive Roland Smith said.þþOffice Depot and rival Staples Inc have been struggling with declining sales in the United States as shoppers shift their office supply purchases to e-retailers, mass merchants and drugstores.þþStaples said in March that it would close 225 stores in the United States and Canada, about 12 percent of its North America outlets, and the company forecast another quarter of sales declines.þþOffice Depot said on Tuesday that it would shut 150 stores this year. The company said last month that it would close 19 OfficeMax stores in Canada.þþAt the end of 2009, Office Depot and OfficeMax combined had about 2,085 stores in North America, which will drop to about 1,500 stores in the United States by 2016 after the closures.þþOffice Depot's North America retail same-store sales fell 3 percent in the first quarter ended March 29.þþHowever, the business seems to have improved from the fourth quarter, despite extremely cold weather in the first quarter, B. Riley & Co analyst Scott Tilghman said.þþÿSame-store sales were down 4 percent last quarter so (this is) definitely a move in the right direction ... despite all of the headwinds,ÿ he said.þþOffice Depot Chief Financial Officer Stephen Hare said the North America business benefited from higher sales of copy and print services, but was hurt by a decline in sales of supplies, furniture and technology-related products.þþTilghman also said that Office Depot might become more aggressive in adding products and services to arrest the fall in sales.þþStaples said in March that it would refresh about 20 percent of the products in its stores, adding new items such as storage solutions and maintenance repair and operations items.þþOffice Depot raised its full-year adjusted operating income forecast to at least $160 million from $140 million.þþThe company posted a first-quarter net loss of $109 million, or 21 cents per share, attributable to common stockholders. A year earlier, Office Depot had a net loss of $17 million, or 6 cents per share.þþThe company earned 7 cents per share, excluding items.þþIncluding OfficeMax operations, sales were $4.35 billion. Office Depot alone had sales of $2.72 billion a year earlier.þþAnalysts on average had expected a profit of 3 cents per share on sales of $4.28 billion, according to Thomson ReutersþþI/B/E/S.þþOffice Depot's shares were up 15.8 percent at $4.83 in late morning trading.
Source: NY Times
