Office Depot to close 400 stores, shares rise

The company, which also reported better-than-expected quarterly results due to cost-cutting, said it would shut 150 stores this year.

The store closures are a part of the company's plan to consolidate operations after the acquisition of OfficeMax in November, Chief Executive Roland Smith said in a statement.

Office Depot had 1,900 U.S. stores as of March 29.

The closure of the 400 stores will start adding to profit in 2015 and is expected to lead to annual run-rate savings of at least $75 million by the end of 2016, Smith said.

Office Depot raised its full-year adjusted operating income forecast to at least $160 million from $140 million.

The company and rival Staples Inc have been struggling with declining sales in the United States as shoppers shift their office-supply purchases to e-retailers, mass merchants and drugstores.

Same-store sales in Office Depot's North America retail division fell 3 percent in the first quarter ended March 29.

The company posted a net loss of $109 million, or 21 cents per share, attributable to common stockholders.

Office Depot posted a net loss of $17 million, or 6 cents per share, a year earlier.

The company earned 7 cents per share, excluding items.

Including OfficeMax operations, sales were $4.35 billion. Office Depot alone had sales of $2.72 billion a year earlier.

Analysts on average had expected a profit of 3 cents per share on sales of $4.28 billion, according to Thomson Reuters I/B/E/S.

Office Depot's shares closed at $4.17 on Monday on the New Stock Exchange.

(Reporting by Maria Ajit Thomas in Bangalore; Editing by Savio D'Souza and Kirti Pandey)

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