Office Depot beats Q3 forecasts; to accelerate store closings

Office Depot saw its profit rise in the third quarter as cost-cuts and a $240 million tax benefit helped to offset the impact of lower revenue.



Profit in the quarter totaled $44 million, topping analysts’ forecasts. Sales fell 7% to $2.84 billion.



Office Depot is also continuing with its plan (announced in August) to close approximately 300 stores over the next three years. It closed seven stores in the third quarter, giving it a total of 1,506 U.S. stores. The retailer is accelerating the pace of the closures, with plans to shutter 65 locations in the fourth quarter.



Office Depot is on the comeback trail after its planned acquisition by rival Staples failed to pass muster with the Federal Trade Commission.



“During the third quarter we made substantial progress on the opportunities identified in our new three year strategic plan,” said Office Depot chairman and CEO Roland Smith, who is set to retire next year. “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.”



Office Depot is proceeding with its previously announced deal to sell its European business to the Aurelius group. The company is optimistic the transaction can close by the end of 2016.



In addition to approving the sale of the European business, the Office Depot board also approved a plan to sell substantially all of its remaining international businesses located in Australia, New Zealand, South Korea and mainland China. These businesses generate approximately $600 million in total annual sales and an operating loss.