What happened

Office Depot (NASDAQ:ODP) trounced the market last month, with the stock gaining 33.5% compared to a 3% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally erased only a portion of the stock's recent losses, though, and shares are still in negative territory so far in 2018.

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So what

August's spike came in response to surprisingly strong second-quarter results. Sales rose 11% to $2.6 billion thanks to improving demand trends in each of the retailer's three operating divisions. Its service segment was a standout performer, more than doubling to $295 million and reaching 16% of the broader business.

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Image source: Getty Images.

The second-quarter report contained some bad news for investors, too. Sales at existing retailing locations fell 2% thanks to declining customer traffic and reduced spending per visit, even though that result represented a 2-percentage-point improvement from Q1. Adjusted operating margin fell to 2.4% of sales from 2.7% a year ago, too.

Now what

CEO Gary Smith and his executive team affirmed a full-year outlook that calls for sales of around $10.8 billion and adjusted operating income of $360 million. Both figures were lifted in early May, and executives now have even more confidence that they'll reach those goals after retailing trends improved over the last few months.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.