said late Thursday that John Macatee, president and chief operating officer, had resigned from the company as part of a wide-ranging corporate reshuffling.
The company later acknowledged that there has been management infighting and a lack of focus, which could have contributed to the softness in its stock.
The announcement of Macatee's departure came in tandem with the release of the company's third-quarter earnings, which beat analysts' estimates by a penny per share. But including one-time charges, the company posted a loss for the quarter.
The management shake-up and the financial results were announced after the stock market closed. Office Depot's shares ended down 3/8 at 9 1/8 on the
New York Stock Exchange
Thursday, well off their 52-week high of 26 earlier this year. The stock plunged to its current range after the company warned Aug. 30 that third-quarter earnings would be well below Wall Street's expectations.
Office Depot did not name a new president and chief operating officer. It said only that Macatee left to pursue other opportunities. It also said those top executives who had reported to Macatee will report to David Fuente, chairman and CEO.
Saying Office Depot is "not enough customer-centric a company," Fuente criticized the corporate divisions' inability to work together to build brand recognition.
"Change is never easy," Fuente said in a conference call with around 600 employees this evening. "Office Depot needs to present ourselves to our customers as one company. We didn't have bad strategies; we didn't execute the strategies as well as we could have."
The company plans to open 125 new stores in 1999. During the quarter, 33 opened and three closed."We were disappointed in our profits in the stores," Fuente said.
Over the past year, store sales rose 17%, sales in its business-services group rose 9% and international sales rose 25%.
"Whenever you have a change in management, there's a concern that there's going to be a change in direction," Fuente said, adding that there will be a change. "We're a company right now that's not being very well received in the investment community."
Since the start of the quarter, the company has repurchased 45.6 million shares in the open market for $488.4 million plus commission.
In its earnings report, Office Depot said it lost $1.07 million in the third quarter, compared with net income of $15.7 million or 4 cents a diluted share a year earlier.
But excluding $111.49 million that the company paid to open and close stores, write down backlogged inventory and complete a merger with Viking Office Products, Office Depot said it had profits of 19 cents a diluted share.
Analysts surveyed by First Call/Thomson Financial expected the Delray Beach, Fla.-based company to earn 18 cents a share.
Revenue rose 15%, to $2.58 billion, from $2.23 billion in 1998's third quarter.