"We have tempered our overall rollout strategy in response to the economic environment," said Chuck Rubin, president of the chain's North American retail. He also said that the company will continue to renovate its stores into its "M2" prototype format, which makes up for 55% of the 1,267-unit chain.
In North America same-store sales dropped 9% in the first quarter year over year. Sales were especially tough in the California and Florida markets, which represent 26% of the chain's total sales.
Total sales in North America fell 7%, to $1.7 billion, while operating profit came in at $82 million, a decline from $152 million during last year's first quarter. Sales per sf were $233 at Office Depot stores, or flat compared to the first quarter of 2007.
Other than a tough overall economy due to the housing slump and credit crunch, executives said margins were hit because of promotional sales of tech products. "We do see sales challenges continuing," Rubin said.
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