OfficeMax 2Q Loss Narrows On Year-Earlier Write-Down

   DOW JONES NEWSWIRES 
 

OfficeMax Inc.'s (OMX) second-quarter loss narrowed on a year-earlier write-down while sales and margins continued to fall.

But the results still topped analysts' views.

The No. 3 office-supply retailer behind Staples Inc. (SPLS) and Office Depot Inc. (ODP) has seen revenue evaporate along with consumer spending. As such, the company has suspended its quarterly dividend, eliminated jobs and delayed its store-remodeling program until economic conditions improve.

Chairman and Chief Executive Sam Duncan said the company's efforts to streamline and boost its financial position "significantly helped" performance during the period. He added the company expects sales to decline in the rest of the year.

OfficeMax reported a quarterly loss of $16.9 million, or 23 cents a share, compared with a prior-year loss of $894.2 million, or $11.79 a share, a year earlier. Excluding restructuring impacts and the prior-year write-down, the company had a 4-cent loss while year-earlier earnings would have been 24 cents.

Revenue declined 16% to $1.66 billion as same-store sales dropped 12%.

Analysts polled by Thomson Reuters expected a loss of 7 cents a share on revenue of $1.64 billion.

Gross margin fell to 23.8% from 24.4%.

Sales at the company's contract segment - its business-to-business office products distributor - dropped 21%, reflecting weaker sales from existing corporate accounts.

Last month, OfficeMax and FedEx Corp. (FDX) reached a multiyear agreement to offer domestic FedEx express and ground shipping services in more than 900 OfficeMax stores beginning this fall as the retailer looks to boost traffic at its stores.

Shares of OfficeMax closed Wednesday at $7.18 and haven't traded premarket Thursday.

-By Kerry Grace Benn and Jenny Park, Dow Jones Newswires; 212-416-2353; [e-mail]