Hurricanes Hurt Office Depot
Delray Beach, FL-based cataloger/retailer Office Depot (NYSE: ODP), which mails the Viking Office Products family of catalogs, reported slightly higher third-quarter sales but lower earnings due to softening in its European business, lower-than-expected back-to-school sales, and the hurricanes that hit the Southeast. The company also blamed increased catalog and e-commerce promotional activity and higher paper costs for reducing its margins.
Net earnings fell 2%, to $89.9 million for the three months ended Sept. 25, compared with $91.7 million for the third quarter of last year. Total sales increased 3%, to $3.3 billion. Third-quarter sales in its business services group, which includes Viking, increased 2%. Growth from the Office Depot catalog and 4Sure.com, a Website selling computers and accessories, offset declines in Viking catalog sales. Domestic e-commerce sales grew 12% during the quarter.
CDW Grows 3Q Net Income 46%
Vernon Hills, IL-based CDW Corp. (Nasdaq: CDWC) posted a 46% leap in third-quarter net income. For the three months ended Sept. 30 the computer reseller netted a record $65.2 million. Sales increased 24%, to $1.5 billion. Direct Web sales—processed without the assistance of a customer service rep—increased 44%, to $406 million. Total public sector sales, include sales to the federal government, increased 20%, to $414.8 million. Corporate sector sales rose 25%, to nearly %1.1 billion.
“The third quarter is typically our strongest quarter, due to the impact of fiscal year-end IT spending by federal government agencies,” chairman/CEO John Edwardson said in a statement. “Within our public sector segment, we focused on funded opportunities among our federal customers and experienced accelerated sales in this channel towards the end of the quarter. In addition, overall demand from our small and medium-sized business customers remained stable throughout the quarter.”