Office Depot To Close 300 Stores Over Next Three Years; Initiates Dividend

(RTTNews) - Office Depot Inc. (ODP), a global provider of office products, services, and solutions, announced the company is launching a number of initiatives across key business areas to capture savings, which in total are expected to deliver over $250 million in annual benefits by the end of 2018. The company said these savings are in addition to the expected merger synergy benefits of more than $750 million from the OfficeMax integration and will bring the total of annual savings benefits realized since 2014 to more than $1 billion by the end of 2018. Based on the success of its U.S. Retail Store Optimization that was launched in 2014, Office Depot is expanding this plan to include approximately 300 additional store closures over the next three years.

The Office Depot Board has approved the initiation of a quarterly cash dividend. The company has declared an initial dividend of $0.025 per share ($0.10 per share on an annualized basis) on the common stock of the company payable on September 15, 2016, to shareholders of record at the close of business August 25, 2016. Office Depot said its Board has approved an increase in the stock repurchase authorization from the previously authorized $100 million to a total of $250 million.

Looking forward, Office Depot said, it continues to expect total company sales in 2016 to be lower than 2015, primarily due to the impact of store closures, the business disruption from the protracted regulatory process related to the Staples' acquisition attempt and continued challenging market conditions. The company expects this disruption to continue throughout the year but at a decelerated rate as the company focuses on winning new business. As a result of the adverse impact on the company's sales resulting from the prolonged Staples' acquisition attempt, Office Depot now expects to generate between $450 million and $470 million in adjusted operating income in fiscal 2016.