Office Depot moves to loss but tops estimates

Boca Raton, Fla. Office Depot said Tuesday that it moved to a first-quarter loss due to charges for a restructuring that included facility closings, but adjusted results beat Wall Street's estimates.

For the quarter ended March 28, the office-supply retailer recorded a loss of $54.7 million, compared with a year-ago profit of $68.8 million. Excluding $120 million in charges, earnings in the latest quarter were $27 million. Revenue slid 18% to $3.23 billion, from $3.96 billion.

The charges included costs for lease accruals, severance and inventory write-downs related to some facility closings. The actions were part of a strategic business review enacted during the quarter, but Office Depot warned that it will likely record additional charges of approximately $110 million over the course of the year for more items related to the review and legacy 2005 initiatives.

The company previously announced that it would close approximately 9% of its North American stores and cut 2,200 jobs. It also plans to open fewer locations next year.

During the first quarter, Office Depot closed 107 stores and relocated one store, bringing the total store count to 1,160 as of March 28.