Office Depot Shares Drop On Lowered Sales Forecast

Delray Beach, FL (AHN) - Shares of Office Depot (ODP) are trading lower by more than 30 percent after the company announced second quarter same store sales will likely be 10 percent lower.

The office supplies retailer said same store sales are lower due to "pressure from weakening business conditions."

The company said its profit margin shrunk more than expected. Original forecasts called for a decline in margin of 2 to 2.5 percent.

"In other words, the company expects to earn not much more than a penny per share," said Credit Suisse analyst Gary Balter, according to MarketWatch. Balter reduced his 2008 earnings estimate on the retailer to 43 cents a share from 95 cents a share.

The company said the economic environment will likely be "difficult" the remainder of the year, though they do expect profit margins to improve sequentially in the third and fourth quarters.

On average, analysts expect earnings of 22 cents a share for the second quarter, according to FactSet.

Office Depot announces second quarter earnings on July 30.