Who'd have thought that Office Depot (NYSE:ODP) would be one of the first retailers to blame weak sales on the housing market? But that's exactly what Chuck Rubin, President of Office Depot's North American Retail Division, did on the company's conference call:
Third quarter sales in the North American Retail Division were flat at $1.8 billion. Comparable store sales in the 1111 stores in the U.S. and Canada that have been opened for more than one year decreased 5% for the third quarter, challenging economic conditions particularly in some of our most profitable geographies drove declining sales and actions are taken during the quarter to moderate those sales declines have had minimal impact to date. Virtually all of our comparable sales decline was related to macro economic variables, mostly housing econometrics. A multi-variant regression model developed by third party research firm has found a direct correlation between our sales decline and the high inventory of homes in the market and the extended time required to sell them. Concentrations of weaker consumer spending have occurred in Florida and California; two states which combined represent about 26% of our sales and about 25% of our total store contribution to operating profit and accounted for about 40% of our total comparable sales decrease in the third quarter.