Office Depot (ODP), which has been persistently losing market share to industry stalwarts, recently posted lower-than-expected first-quarter 2011 results. The underperformance can be traced back to sluggish sales across each business segment that suffered due to lower customer transaction counts and the divestiture of businesses in Japan and Israel.
The company reported a 3.2% drop in the top-line and a break-even bottom-line, with both falling short of the Zacks Consensus Estimates. A sales decline of 3% at the contract channel of the company's North American Business Solutions division following failure to retain customers during the shift to the new purchasing consortium was also a first-quarter event.
Further, we remain cautious about the macroeconomic environment and sluggish job market with small businesses and consumers still remaining watchful on their spending.
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