Office Depot raises operating profit forecast

Reuters

(Adds forecast, details, background, shares)

Aug 5 (Reuters) - Office supply retailer Office Depot Inc raised its full-year adjusted operating income forecast, saying cost savings from the closure of some U.S. stores were expected to be higher than previously anticipated.

The company's shares rose 4 percent before the bell.

Office Depot's sales jumped nearly 59 percent in the second quarter ended June 28, helped by the acquisition of smaller rival OfficeMax.

Office Depot said in May that it would close 400 stores in the United States by the end of 2016, with 165 stores closing this year.

" ... We have increased the expected annual run-rate synergies from (the store closures) to at least $100 million by the end of 2016, from our prior outlook of at least $75 million," Chief Executive Roland Smith said in a statement.

The company raised its adjusted operating income forecast for the year ending December to at least $200 million from at least $160 million.

Office Depot bought OfficeMax in November to better compete with online retailers such as Amazon.com Inc, drugstores and wholesale retail chains such as Wal-Mart Stores Inc, which are attracting shoppers with their lower priced offerings.

Net loss attributable to Office Depot shareholders widened to $190 million, or 36 cents per share, in the second quarter from $64 million, or 23 cents per share, a year earlier.

Office Depot's sales were $3.84 billion compared with $2.42 billion in the year-earlier quarter, which did not include OfficeMax sales.

Excluding items, Office Depot posted a loss of 2 cents per share and revenue of $3.78 billion for the second quarter.

Analysts had expected a loss of 2 cents per share on revenue of $3.81 billion, according to Thomson Reuters I/B/E/S.

Office Depot's shares closed at $5.11 on the New York Stock Exchange on Monday.

(Reporting by Devika Krishna Kumar in Bangalore; Editing by Kirti Pandey)

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