Shares closed up 13.5 percent at $2.86 per share after the Boca Raton, Florida-based retailer reported adjusted earnings of 5 cents a share, beating analysts' average estimate of 4 cents a share. Office Depot also reported $2.63 billion of revenue for the quarter, beating the estimate of $2.58 billion and 5 percent higher than the same quarter last year.
"I am extremely pleased with our performance in the second quarter as the execution of our strategy is driving improved sales trends across all three of our operating divisions," said Gerry Smith, Office Depot's CEO. "Sales in the Business Solutions Division were up an impressive 4 percent in the quarter driven by our acquisition strategy and growth in the adjacency categories beyond office products."
"I'm also encouraged by the early success of our initiatives to increase services, which now represent 16 percent of total sales," Smith said. "In addition to the sales performance, our efficiency and cost control initiatives allowed us to deliver an increase in year-over-year operating income and cash flow for the Company in the quarter."
Office Depot said in its second-quarter press release that it has had free cash flow of $177 million since the start of 2018 and repurchased approximately 3 million shares, totaling $8 million, in its second quarter.
On Monday, the company announced the naming of Timothy J. Perrott to vice president of investor relations.