DOW JONES NEWSWIRES
OfficeMax Inc. (OMX) swung to a fourth-quarter profit as the
office supply retailer continued to cut costs, though sales
declined in both its contract and retail segments.
"To date in 2011, we have experienced a variety of challenges
for our business including adverse weather conditions, heightened
promotional activity, and a lack of favorable economic conditions,
and we anticipate that some of these challenges may persist," Chief
Financial Officer Bruce Besanko said.
For the first quarter, the company expects total sales to be
lower than the prior year's period, including a favorable impact
from foreign currency translation. Meanwhile, total sales for the
year are expected to be flat to slightly higher than in 2010,
despite the currency adjustments and the benefit of an extra week.
Analysts polled by Thomson Reuters expected first-quarter revenue
of $1.93 billion, up 1%, and full-year revenue of $7.29 billion, up
2%.
OfficeMax has reported lower full-year sales the last three
years, as it continues to operate in a challenging economic
environment. Still, OfficeMax's bottom line has benefited from cost
cutting, and it continues to focus on expanding its existing
contract and retail businesses, as well as gaining momentum from
offering managed print and print-on-demand services.
OfficeMax reported earnings of $12.7 million, or 14 cents a
share, compared with a year-earlier loss of $2.58 million, or 4
cents a share. Analysts polled by Thomson Reuters most recently
expected earnings of 10 cents a share.
Revenue decreased 2.4% to $1.77 billion. In October, the company
predicted sales would be "slightly lower" than the prior year's
fourth quarter.
Gross margin grew to 25.3% from 24.4% as total operating
expenses dropped 11%.
OfficeMax's contract segment--its business-to-business office
products distributor--saw sales decline 3.6%. The retail business
sales slip 1.1%.
Shares of OfficeMax were unchanged at $17.06 premarket and are
up 16% in the past year.
-By Lauren Pollock and Jenny Roth, Dow Jones Newswires;
212-416-2356; lauren.pollock@dowjones.com