Bulletin: Office Depot Inc. Reports First-Quarter 2016 Earnings In Line With Expectations; Ratings Unchanged

NEW YORK (Standard&Poor's) April 26, 2016--Standard&Poor's Ratings Services said today that Boca Raton, Fla.-based office supply retailer Office Depot Inc.'s (B-/Watch Pos/--) reported first-quarter 2016 earnings are consistent with our expectations. When compared with the same quarter last year, total revenues dropped 9% because of store closures that are part of its brick-and-mortar rationalization initiatives, foreign currency headwinds, and some disruption related to the planned acquisition by Staples. Company-reported gross margin was flat at 24.2% on better expense management and lower occupancy costs. For the full year 2016, we expect soft performance emanating from the impact of store closures and continued competitive pressures. We forecast annual revenues to decline in the mid-single digits and EBITDA margins

...NEW YORK (Standard & Poor's) April 26, 2016--Standard & Poor's Ratings Services said today that Boca Raton, Fla.-based office supply retailer Office Depot Inc.'s (B-/Watch Pos/--) reported first-quarter 2016 earnings are consistent with our expectations. When compared with the same quarter last year, total revenues dropped 9% because of store closures that are part of its brick-and-mortar rationalization initiatives, foreign currency headwinds, and some disruption related to the planned acquisition by Staples. Company-reported gross margin was flat at 24.2% on better expense management and lower occupancy costs. For the full year 2016, we expect soft performance emanating from the impact of store closures and continued competitive pressures. We forecast annual revenues to decline in the mid-single digits and EBITDA margins to decline to 6.7%. Our CreditWatch listing on Office Depot reflects the potential acquisition by office supply retail peer Staples Inc. (###-/Watch Neg/A-3). The regulatory...

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