Office Depot is at ‘high risk’ of becoming a victim of Amazon encroachment: analyst

Office Depot Inc.
is at “high risk” of becoming a victim of Inc.
according to a CFRA analysis. Shares of Office Depot tanked nearly 20% in Thursday trading after the office supply chain issued a warning for first-quarter sales. The retailer said the CompuCom division, which specializes in items for the “digital workplace,” is expected to report a first-quarter operating loss of $15 million, “driven by lower-than-expected revenue from existing customer projects compounded by less than commensurate reductions in associated expenses.” CFRA analysts think Amazon has “significantly threatened” Office Depot’s position as the e-commerce giant has forged office-supply partnerships with the public sector, including agreements with Atlanta and Denver public schools. “Our strong sell recommendation is reflective of obstacles we see for Office Depot to reinvent its business model, which we think is seen in part by a continued decline in comparable sales (down 2.0% in 2016; down 5.0% in 2017; down 4.0% in 2018),” CFRA wrote. CFRA says Dick’s Sporting Goods Inc.
and Williams-Sonoma Inc.
are also among those at high risk. Office Depot shares have gained 17.6% in 2019, outpacing the S&P 500 index
which is up 14.6% for the period.

View more information:

Articles in category: moneyist
See also  Unusual Options Activity Insight: Hertz Global Holdings

Leave a Reply

Back to top button