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DELRAY BEACH, FL-Office Depot Inc. accelerated the pace of its new store openings in the fourth quarter and the full year in 2006, the office supply store chain said Wednesday in reporting financial results for the quarter and the year. For the quarter, the company speeded the pace of both store expansions and remodelings by opening 39 new stores and remodeling 63.

Although the capital expenditures associated with the quickened pace of expansions and remodelings boosted revenue, it also raised operating expenses by 30 basis points in comparison with the fourth quarter of the previous year. Despite this pressure on costs, the company noted in its conference call with financial analysts on Wednesday, operating profit margin improved 120 basis points to 7.1% in the quarter from 5.9% in the same quarter the year before.

For the year, Office Depot opened 115 new stores and remodeled 176, ending the year with 1,158 stores throughout the US and Canada. The company also executed a one-time real estate deal in the fourth quarter in the sale and short-term leaseback of its existing corporate headquarters in anticipation of the late 2008 completion of its new headquarters. The sale resulted in a net pre-tax gain of $15.7 million.

Office Depot officials discussed store expansions during the conference call in which the company reviewed its quarterly and yearly results. For the year, net earnings were $516 million compared to $274 million in 2005. Diluted earnings per share were $1.79 in 2006 versus $0.87 last year.

Sales for the year totaled $15 billion, an increase of 5% from the previous year. Excluding the 53rd week of 2005, sales for the year increased 6% as compared to 2005. Comparable sales for the year in the North American Retail Division increased by 2%.

Steve Odland, Office Depot’s chairman and CEO, attributed the higher sales to “strategic initiatives” that have boosted sales growth in each of the company’s divisions. He said that sales grew “despite a highly promotional holiday retail environment.” In addition, technology sales were lower than they otherwise might have been “due to the impending release of Microsoft Windows Vista,” the new operating system that Microsoft is launching.

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