New York, NY, United States (4E) – Office Depot Inc. reported a wider loss in the fourth quarter due to weaker margins, as well as expenses tied to its recent merger with OfficeMax Inc. and other items.
The office supply retailer announced in Tuesday that its loss expanded to $144mn, or 34 cents per share, compared to a loss of $17mn, or six cents per share, in the previous year. Excluding some items like merger costs, the company’s adjusted loss was three cents following a breakeven result a year ago.
Last year, Office Depot completed a merger with OfficeMax in a $1.2bn deal. Since the transaction was completed on Nov. 5, OfficeMax added $939mn in sales to Office Depot. However, profit was hurt by higher spending due to merger costs and other operating expenses, which rose to $111mn from $12mn.
Office Depot, which appointed Roland Smith as Chief Executive in November, said total revenue surged 33 percent to $3.49bn. Sales would have declined 2.9 percent without contribution from OfficeMax. Gross margin dropped to 22.6 percent from 23.1 percent.
The Boca Raton, Fla.-based company also increased its estimate for merger-related cost savings to over $600mn by the end of 2016.