The Business Solutions division attributes the sales dip in part to sales cannibalized by the retail division through its omnichannel programs.

Overall sales fell in Q2 for Office Depot Inc. and its business-to-business sales declined on the heels of a similar decrease reported in Q1.

For the second quarter ended July 1, Office Depot reported sales in its Business Solutions division fell 6.2%, to $1.248 billion from $1.330 billion in the same quarter last year. Q1 sales in the division were down 3.9% to $1.315 billion from $1.368 billion.

For the first six months, B2B sales were $2.563 billion, down 5.0% from $2.698 billion. Office Depot says the latest B2B sales decline comes from competitive pressures, previously lost contract business, the ongoing reduction in catalog sales through call centers and the impact of sales from omnichannel programs recorded in the Retail division.

Office Depot doesn’t break out e-commerce sales in its business or retail divisions in its earnings reports and declined to provide online sales, but the 2017 B2B E-Commerce 300 estimates online B2B sales accounted for 21% of total sales. Applying that rate to the first six months of fiscal 2017 yields online B2B sales of $1.06 billion, down 7.8% from $1.15 billion in the prior-year period.

Q2 2017 Retail division sales were $1.111 billion, down 11.0% from $1.249 billion in the same quarter last year. Year-to-date retail sales were down 10.4% to $2.469 billion from $2.755 billion, Office Depot reported.

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The retail sales decrease resulted from planned store closures over the past 12 months and a 6% decline in comparable-store sales in the quarter, due mainly to lower store traffic and average order value, the company says.

For the second quarter of fiscal 2017 Office Depot also reported:

  • Total sales of $2.36 billion, down 8.5% from $2.58 billion in the same quarter last year.
  • Gross profit of $545 million, down 11.1% from $613 million.
  • Gross profit margin of 23.1% compared with 23.7% last year.
  • Net income of $24 million, compared with net income of $210 million in Q2 2016.

For the first six months Office Depot reported:

  • Total sales of 5.04 billion, down 7.7% from $5.46 billion year over year.
  • Gross profit of $1.22 billion, down 8.3% from $1.33 billion.
  • Gross profit margin of 24.2%, compared with 24.3% last year.
  • Net income of $140 million compared with net income of $256 million in the same period last year.

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