OfficeMax Reports Soaring Q1 Profits

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OfficeMax Reports Soaring Q1 Profits
By Steve Morgan (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

OfficeMax Inc (NYSE:OMX) released its earnings before opening bell this morning, reporting double digit sales growth for its website and total sales of $1.77 billion for the three months ending March 30. That’s compared to $1.87 billion in the same quarter a year ago. Net income was $56.3 million or 64 cents per diluted share, compared to $4.9 million or 6 cents per diluted share in the same quarter a year ago.

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OfficeMax Reports Soaring Q1 Profits

Excluding certain items, like the impact of stores opened or closed and foreign exchange rates, adjusted sales for the quarter declined 4.3 percent from the same quarter a year ago. Adjusted net income was $10.1 million or 11 cents per diluted share, compared to $19 million or 22 cents per diluted share in the same quarter a year ago. Analysts were expecting the office supply retailer to report earnings of 23 cents per share on revenue of $1.84 billion.

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OfficeMax’s Contract And Retail Segments

The company’s contract segment sales fell 4.1 percent compared to the same quarter a year ago, reflecting a decline of 3.5 percent in the U.S. and a 5.4 percent decline in international contract sales. The company attributed the declines to fewer work days during the quarter and weaker sales to new and existing corporate accounts, especially in the government sector. OfficeMax reported contract segment income of $15.4 million compared to $27.1 million in the same quarter a year ago.

The office supply chain also reported a 7.3 percent decline in retail sales, putting them at $845.4 million compared to the same quarter a year ago. During the first quarter, OfficeMax also announced that it would reformat its stores into OfficeMax Business Solutions Centers, which would offer specially tailored business services for local entrepreneurs.

Gross margins for both segments increased in the first quarter.

OfficeMax’s 2013 Guidance

OfficeMax Inc (NYSE:OMX) said April sales trends continued to be negative, although they were slightly improved from the first three months of the year. The retailer guided for total second quarter sales to be lower than the second quarter of last year. It expects that its operating income margin will continue to be positive, although it will decline slightly from the same quarter a year ago. Full-year guidance was for total sales to be lower than last year.

As of this writing, shares of OfficeMax Inc (NYSE:OMX) were up 1.79 percent in pre-market trading after gaining 1.29 percent on Monday.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@wordpress-785388-2679526.cloudwaysapps.com.
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