J.P. Morgan Comments On Office Depot 1Q Results

According to J.P. Morgan, Office Depot ODP 1Q sales are consistent with their outlook of down 3% YOY. J.P. Morgan reported that NAR comps were down 1% YOY and NAD sales declined 3%. “Overall, restatements are never a positive for credibility (and ODP has been working to regain what was lost in the Odland years), and the company invested in 1Q for the benefit later in 2011 and beyond, which caused roughly an $8MM miss vs. our EBIT forecast of $44MM. On the positive side, NAR comps came in a (1%), ahead of our (3%) forecast and considering the assumed impact of storms in January and early February, we believe the quarter ended on the better side of down 1%. We think the stock is biased negatively today, though the company will provide some forward commentary on sales, earnings, and cash flow on the call, which in addition to the jobs report, should ultimately determine the overall direction and extent.” Office Depot closed yesterday at $4.63.