OfficeMax's Q3 earnings rose 7.8% to US$21.5M as revenue fell 2.2% to US$1.77B, same-store revenue fell 4.3%; poor back-to-school season blamed for revenue decline
October 27, 2011
– OfficeMax Inc. said Thursday that its third-quarter net income rose 7.8 percent as it cut costs. Shares of the office supplies retailer rallied even as it said that revenue fell due to a weak back-to-school season.
The Naperville, Ill., company said net income rose to $21.5 million, or 25 cents per share, in the quarter that ended Sept. 24. That compares with $20 million, or 23 cents per share, in the same quarter a year ago.
Those results beat Wall Street expectations. Analysts surveyed by FactSet expected earnings of 24 cents per share.
The company said that revenue fell 2.2 percent to $1.77 billion, below the $1.81 billion Wall Street had expected.
Same-store revenue fell 4.3 percent during the quarter. That's a key indicator of a retailer's financial performance because it excludes locations that recently opened or closed.
OfficeMax, which has 983 stores, said quarterly operating expenses fell to $418.4 million from $429.5 million a year ago.
Shares of the company jumped 8.5 percent, or 45 cents, to $5.72 in morning trading. The stock is down by two-thirds in the year to date.
OfficeMax said sales will remain soft in the fourth quarter, but it anticipates revenue to be higher than the prior year's $1.77 billion thanks to an extra week in the 2011 fourth quarter and favorable currency exchange rates. For the year, OfficeMax expects lower revenue from 2010.
It expects to close 20 stores in the U.S. and two stores in Mexico in 2011, to be offset by seven store openings in Mexico.
© 2017 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.