Office Depot (Nasdaq: ODP), the world’s largest retailer of office products, reported explosive growth in its e-commerce business in the first quarter of 1999, dazzling Wall Street after the end of trading on Thursday, with a 759 percent year-to-year increase in online sales.
Internet sales for the first quarter were $50.35 million (US$), compared to just $5.86 million in the first quarter last year. Office Depot is poised to soon shatter the $66.48 million it recorded in online sales for all of 1998.
Overall sales for the quarter rose to $2.62 billion, nine percent higher than the $2.40 billion in the first quarter of 1998. Office Depot reported that earnings per share before merger and restructuring were 26 cents per share in the first quarter, 24 percent higher than the 21 cents per share the company reported a year ago. The company also reported $1.69 million in merger and restructuring charges related to its merger with Viking Office Products.
“Our first quarter results reflect our continuing ability to generate sustainable, profitable growth,” said David I. Fuente, chairman and CEO of Office Depot. “While our sales were somewhat softer than expected, margins remained strong throughout the quarter.”
Office Depot’s Web site sells a variety of products and supplies for home, business and educational use, as well as offering computer hardware and software. Viking Office Product’s Web site also offers online shopping.
In addition to catering to online customers in the United States, Office Depot is targeting buyers in Europe. In early March, Office Depot launched an e-commerce site for office supplies under the Viking brand in the United Kingdom. The site can be found at www.viking-direct.co.uk.
Salomon Smith Barney began coverage of both Office Depot and competitor OfficeMax (Nasdaq: OMX) on Thursday with outperform ratings.
Shares of Office Depot were down 9/16 to 22-5/8 in early trading today. Shares of OfficeMax were up 1/6 to 8-9/16.
On Thursday, OfficeMax announced that it had signed a deal with Netopia (Nasdaq: NTPA), to provide OfficeMax’s online customers with professional Web sites using Netopia’s Virtual Office. OfficeMax also announced enhancements to its affiliate program and a strategic partnership with leading affiliate site Linkshare.