Jefferies Lowers ODP FY11E EPS

In its preview of Office Depot's ODP Q4, Jefferies announced that it has lowered its FY11E EPS to -$0.07 from -$0.02 “as we grow more concerned about market share loss in the delivery business in the coming year.” “We think Office Depot's share loss in delivery to other national competitors and independent dealers is likely to continue in the near-to-medium term; however, continued improvements in the labor markets should benefit the entire industry, albeit at differing rates,” Jefferies writes. “As a result, we view Office Depot as a lower-quality play on the labor recovery given the unique risks to its delivery business. “We forecast a 2.3% total sales decline, including a 1.0% North America Retail comp store sales decline, a 1.0% decline in Delivery sales, and a 5.0% decline in International sales (-1% local currency). We believe that unfavorable January weather probably means a soft start to the first quarter.” Office Depot closed Friday at $6.07.