On July 26, Office Depot
- In a quarter Office Depot would rather forget, it saw its earnings, margins, and free cash flow decrease, with the company pointing to the slowing economy as the culprit.
- Sales at the office supply retailer increased 3.9% to $3.6 billion, thanks to 14% international growth. However, sales grew just 1% in the North American market, with comps declining 5%.
- Expecting the challenging environment to stick around for some time, Office Depot lowered its planned North American store openings from 150 to 125 to avoid adding to declining sales at existing stores.
- Of the 100 investors currently rating Office Depot, 87 expect it to outperform the market. Of course, they made their predictions prior to yesterday's news. Office Depot is currently a three-star stock (out of a possible five) in Motley Fool CAPS.
(Figures in millions, except per-share data.)
Income Statement Highlights
Q2 2007 |
Q2 2006 |
Change |
|
---|---|---|---|
Sales |
$3,631.6 |
$3,494.9 |
3.9% |
Net Profit |
$109.1 |
$118.3 |
(7.8%) |
EPS |
$0.40 |
$0.41 |
(2.4%) |
Diluted Shares |
276.0 |
287.3 |
(4.0%) |
Get back to basics with the income statement.
Margin Checkup
Q2 2007 |
Q2 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
30.3% |
30.9% |
(0.5) |
Operating Margin |
4.2% |
4.9% |
(0.7) |
Net Margin |
3.0% |
3.4% |
(0.4) |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$122.7 |
$341.4 |
(64.1%) |
Accounts Rec. |
$1,466.7 |
$1,314.3 |
11.6% |
Inventory |
$1,615.6 |
$1,450.4 |
11.4% |
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Accounts Payable |
$1,582.5 |
$1,477.5 |
7.1% |
Long-Term Debt |
$564.1 |
$581.8 |
(3.0%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
YTD 2007 |
YTD 2006 |
Change |
|
---|---|---|---|
Cash from Ops |
$293.2 |
$483.8 |
(39.4%) |
Capital Expenditures |
$225.3 |
$121.5 |
85.5% |
Free Cash Flow |
$67.8 |
$362.3 |
(81.3%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Fool contributor Mike Cianciolo held no position in Office Depot. The Fool's disclosure policy believes you have its stapler.