Office Depot Inc Misses, Michael Kors Holdings Ltd Beats Estimates

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Office Depot Inc Misses, Michael Kors Holdings Ltd Beats Estimates
Lizsummers at English Wikipedia [CC BY 3.0], via Wikimedia Commons

Office Depot Inc (NASDAQ:ODP) released its third quarter earnings report and Michael Kors Holdings Ltd (NYSE:KORS) released its second fiscal quarter earnings before opening bell this morning. Office Depot posted adjusted earnings of 10 cents per share on $4.07 billion in revenue. Analysts had been looking for earnings of 9 cents per share on $4.05 billion in revenue. In the same quarter last year, the office supply retailer earned 5 cents per share (pro forma) on $2.62 billion in revenue.

Michael Kors Holdings Ltd (NYSE:KORS) posted net earnings of $1 per share on $1.06 billion in revenue, a 42.7% year over year increase. Analysts had been looking for earnings of 89 cents per share on $977.49 million in revenue. In the same quarter last year, Michael Kors earned 71 cents per share on $740.3 million in revenue. Basic earnings per share for the quarter were $1.01.

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Key metrics from Office Depot’s earnings report

This year’s third quarter earnings report from Office Depot includes sales from OfficeMax, which Office Depot has acquired since then. They reflect a 3% year over year decline from the $4.2 billion in pro forma sales in last year’s third quarter. Net income was 5 cents per share or $29 million, compared to last year’s net income of 41 cents per share or $133 million. Net income includes special items of $79 million and $1 million in operating income from the retail chain’s interest in the Grupo OfficeMax joint venture, which it sold on Aug. 5.

Retail sales in North America rose from $1.1 billion to $1.7 billion. North American Business Solutions sales rose from $.8 billion to $1.5 billion. Internationally, sales rose from $.7 billion to $.8 billion.

Office Depot also increase its full year adjusted profit guidance to between $255 million and $265 million. That new range is over 150% greater than the company’s pro forma 2013 result. For 2015, the company projects adjusted operating income of around $475 million, an 80% increase over this year’s full year guidance.

Key metrics from Michael Kors’ earnings report

Michael Kors Holdings reported a 16.4% increase in comparable store sales. Retail net sales rose 39.4% to $495.6 million due to the opening of 121 net new stores. North American revenue rose 29.8% to $802.2 million, including a 10.8% increase in comparable store sales. Revenue in Europe rose 29.8% to $802.2 million, including a 41.1% increase in comparable store sales. Revenue from Japan rose 106.3% to $16.5 million.

Michael Kors expects the third fiscal quarter’s revenue to be between $1.27 billion and $1. Billion, which would be a double digit increase in comparable store sales. The luxury retail projects diluted earnings of between $1.31 and $1.34 per share. For the full 2015 fiscal year, Michael Kors projects revenue of between $4.3 billion and $4.4 billion, which would be a mid-teens comparable store sales increase. Diluted earnings are expected to be between $4.13 and $4.18 per share.

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