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Office Depot Inc.'s (ODP) third-quarter loss widened amid continued weak sales due to tepid business and consumer spending.

Like other office supply retailers, Office Depot has been hurt amid the recession as consumers and businesses curb spending and delay big purchases. Office Depot has posted just one profitable quarter over the past seven, though excluding charges, its latest earnings beat Wall Street's expectations.

The Boca Raton, Fla., company and its main rivals, Staples Inc. (SPLS) and OfficeMax Inc. (OMX), are also facing increased competition from discounters looking to steal business with lower prices.

For the third quarter, Office Depot reported a loss of$398 million, or $1.51 a share, compared with a year-earlier loss of $6.7 million, or a 2 cents a share.

Adjusted for various tax-related items recognized in the first half of the year and other charges related to previously announced restructuring actions, the company reported a loss of $21 million, or 8 cents a share, compared to a loss of $2 million, or a penny a share, in the prior-year period.

Sales dropped 17% to $3 billion, with North American same-store sales down 14%.

Analysts polled by Thomson Reuters expected a per-share loss of 10 cents on revenue of $3.1 billion.

Gross margin rose to 28.4% from 28%.

Earlier this year, Office Depot received a $350 million investment from a private-equity firm, helping the struggling retailer weather the economic downturn. But the deal came at a steep price, as BC Partners could own a 20% stake in the company and won three seats on Office Depot's board.

The company's North American retail division reported a 192% boost in operating profit, helped in part by the closure of underperforming stores and reduced operating expenses.

However, sales for the division fell 18% to $1.3 billion, due in part to having 117 fewer stores open in the quarter versus the year-ago period.

In Office Depot's international division, profit fell 5.6% , as sales dipped 16% to $861 million. Excluding foreign-exchange effects, sales fell 9%.

Office Depot closed one store, opened one store and relocated three stores during the quarter. The company operated 1,158 stores as of September 26.

Office Depot shares closed at $5.91 Wednesday and were inactive in premarket trading Thursday. The retailer's shares have rebounded significantly this year, nearly doubling since January.

-By Kelly Nolan; Dow Jones Newswires; 212-416-2167; kelly.nolan@dowjones.com