UPDATE: OfficeMax Posts Strong 1Q Results On Growth Efforts
April 29 2010 - 11:04AM
Dow Jones News
OfficeMax Inc. (OMX) reported first-quarter earnings nearly
doubled from a year earlier as the office supplies retailer
benefited from growth initiatives and favorable foreign exchange
rates.
The No. 3 office products retailer by sales reported earnings of
$24.8 million, or 29 cents a share, higher than the 21 cents per
share projected by analysts polled by Thomson Reuters. Sales edged
up by 0.3% to $1.92 billion, with favorable overseas currency rates
offsetting continued sales softness in the U.S.
The company said second-quarter and full-year sales would be
slightly higher than the year-ago periods.
"This is a transitions year for us as we move more from a
turnaround story to a growth story," said Chief Financial Officer
Bruce Besanko in an interview with Dow Jones Newswires.
But while the results show improvement, OfficeMax "is still
suffering from economic pressure because most of our business is to
businesses" severely hurt by the economic downturn, Besanko
said.
OfficeMax's contract sales to businesses rose 3.8% to $963
million in the first quarter, but were down 3.5% on a U.S. currency
basis. Sales through OfficeMax retail stores fell 3% to $954.3
million, reflecting a same-store sales decrease of 2.5% and fewer
stores.
OfficeMax gross margin rose to 26.4%, up 200 basis points and
ahead of most analysts' expectations, as the small sales lift
combined with efforts to improve profitability.
The efforts include expanding offerings and services though
retail stores and to businesses, improving operations like call
centers, and selling more through outside locations, like thousands
of Safeway Inc. (SWI) and Food Lion supermarkets.
OfficeMax may be the stock to bet on as the economic recovery
unfolds, an analyst said. "If one believes that we are at the
beginning of a U.S. economic recovery and employment and spending
will improve, this stock remains our best leveragable play, and
today's components point to more upside if and when that recovery
happens than we had projected," said Gary Balter of Credit
Suisse.
OfficeMax shares are up $1.27, or 7.8%, to $17.47, a contrast
with the trouncing taken earlier this week by rival Office Depot
Inc. (ODP) after posting softer-than-expected results.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
Officemax (NYSE:OMX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Officemax (NYSE:OMX)
Historical Stock Chart
From Jul 2023 to Jul 2024