May 7 OfficeMax Inc reported a
lower-than-expected quarterly profit on Tuesday, hurt by
continued weak sales of technology products and fewer shoppers
visiting its stores, although it announced a special dividend of
$1.50 per share.
Its shares rose 10 cents to $11.85 in premarket trading.
OfficeMax also said that sales continued to decline in
April, yet were slightly better than in the first quarter. It
expects sales to decline both this quarter and this year.
The news comes as the retailer awaits regulatory approval
for its pending merger with rival Office Depot Inc.
OfficeMax said on Tuesday that it is working on its responses to
the Federal Trade Commission's request for additional
information, and still expects to receive approval in order to
close the deal late in 2013.
The duo trail Staples Inc in their share of the
office supply market and are under much pressure from investors
to boost profitability as well as shareholder value.
OfficeMax's first-quarter profit available to shareholders
rose to $56.3 million, or 64 cents per share, from $4.9 million,
or 6 cents per share, a year earlier.
Excluding items, the company earned 11 cents per share.
Analysts on average were looking for a profit of 23 cents per
share, according to Thomson Reuters I/B/E/S.
Sales fell about 6 percent to $1.77 billion, while analysts
expected $1.83 billion.
WEAKNESS EXPECTED TO PERSIST
Office supply retailers, often seen as a barometer of
economic health, have suffered as demand for their products fell
after the recent U.S. recession. They also face strong
competition from Amazon.com Inc and Wal-Mart Stores Inc
in selling everything from pens and notebooks to
OfficeMax expects sales to be down in both the current
second quarter and the full year versus the same periods of
2012, including the projected favorable impact of foreign
currency translation. Year-over-year declines in sales are
expected to continue throughout the year, though at a less
severe rate of decline than the first quarter of 2013, it said.
The company plans to close 15 to 20 of its U.S. stores this
year, relocate and shrink the size of some others, and also open
some smaller stores. In Mexico, it plans to open four stores and
close one store.