OfficeMax results highlight office supply sector woes
(Reuters) - OfficeMax Inc OMX.N reported lower-than-expected quarterly results on lackluster sales to corporate customers and regular shoppers, and warned of weak sales in the period that includes the all-important back-to-school season.
The second-quarter results, reported on Tuesday, come as OfficeMax awaits regulatory approval for its acquisition by larger rival Office Depot (ODP.N), which also reported weaker sales last week.
The companies, which combined would still trail industry leader Staples Inc (SPLS.O), are under pressure to boost profits and shareholder value. A merger would help them cut costs, consolidate stores and boost their clout with suppliers.
Analysts have long called for consolidation in what they see as a cluttered sector whose sales crumbled during the global financial crisis. Office supply stores are also fighting a battle for relevance, with shoppers increasingly buying their paper, toner and technology online or at mass merchandisers.
OfficeMax's second-quarter net loss was $10.0 million, or 12 cents a share, compared with year-earlier net income of $10.7 million, or 12 cents a share. Excluding special items, it earned 2 cents a share, missing analysts' average estimate of 3 cents, according to Thomson Reuters I/B/E/S.
Sales fell 4.3 percent to $1.53 billion, while analysts expected $1.55 billion.
The third-largest U.S. office supply retailer said sales and operating income margin in the current quarter will be down from a year earlier.
(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn and John Wallace)
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