Profit at Office Depot was down due to weaker sales for the second quarter, and missed estimates by analysts helping drag down the stock price Wednesday by over 25%.
Shares of the company tumbled to $4.53 a loss of $1.58 when they closed on Wednesday on Nasdaq, after the office supply retailer based in Boca Raton Florida, posted results there were the weakest thus far in 2017.
CEO of Office Depot Gerry Smith said that over all we are up for 2017, and our softest three-month period is the second quarter.
Sales during the second quarter were down 9% to end the period at $2.4 billion in comparison with sales of $2.6 billion for the same period in 2016.
Sales at same stores, those stores open a minimum of one year, fell 6%, said Office Depot. Retail sales for the three month period were $1.1 billion in comparison to one year ago of $1.2 billion
Office Depot experienced less traffic, overall transactions, and average value of orders, showed its filing with regulators.
Lower sales were experienced in most of its categories including computer and tech products, ink and toner, but were offset in part by break-room and cleaning products.
Previously Office Depot said that its sales for 2017 would be less because of closures of stores. The company announced that it closed 31 of its stores during the just ended quarter and now has 1,408 still open.
For all of 2017, 75 stores have been scheduled to be shuttered.
The retailer is trying to lower its footprint in brick and mortar locations as it attempts to integrate its acquisition from 2013 of Office Max. Last year, Office Depot released plans it was closing another 300 stores during a three year period.
However, analysts seemed to have more concern over the company’s government contract and big business sales that have not improved.
The company placed blame on the ongoing competitive pressures and the previous losses of accounts during the Office Depot/Staples transaction that caused a disruption.
That deal was challenged by the Federal Trade Commission in court, which said it would restrict the competition in the big business sales area. The two companies called the merger off in May of 2016.
One industry research analyst said during a conference call that the merger ended prematurely was so far in the past and thought better trends would have been experienced by now at Office Depot.