Citi: Office Depot Likely to Report In-Line Results

According to a research report published today by Citi, Office Depot

will likely report results in-line with expectations, however, concerns over NAR + GPMs keep Citi on the sidelines. “We are looking for Q4'11 EPS of $0.00, in line with street and vs. $0.09 LY. Street ranges from a loss of ($0.04) to +$0.02. We are forecasting a modest revenue decline of (0.6%) y/y, driven by a (2.5%) North American comp vs. Street of (2%). On a segment basis, we expect a (~3%) sales decline in N.A. Retail, flat y/y growth in N.A. Delivery, and a +2% increase in international sales driven by a continued difficult macro environment and possible share losses. We are forecasting +45bps of y/y OM% expansion on modest +19bps y/y GM% expansion and, and modest SGA% compression,” Citi commented in the report. Citi maintains its Neutral rating on Office Depot, which is currently trading at $3.01.