OfficeMax swings to a profit in Q2
NAPERVILLE, Ill. OfficeMax announced that total sales were $1.65 billion in the second quarter of 2010, a decrease of 0.3% from the second quarter of 2009. For the second quarter of 2010, OfficeMax reported a net income available to shareholders of $11.8 million, or 14 cents per diluted share. For the second quarter of 2009, the company reported a loss of $17.7 million, or 23 cents.
Sam Duncan, chairman and CEO of OfficeMax, said, "We are pleased with our strong performance for the second quarter and first half of 2010. Importantly, we continue to operate with a significant amount of discipline across all areas of our business, which has helped us drive margin expansion. Overall, we believe that our results are indicative of the progress we are making on our profitability initiatives.
OfficeMax Retail segment sales decreased 0.5% to $772.7 million in the second quarter of 2010 compared with the second quarter of 2009, reflecting a same-store sales decrease of 0.3% and fewer stores. Retail same-store sales for the second quarter of 2010 declined primarily due to a continued weak market environment, partially offset by stronger sales in Mexico compared to weak sales in the second quarter of 2009 during the influenza epidemic, according to the company.
OfficeMax Contract segment sales decreased 0.1% compared with the prior year period to $880.5 million in the second quarter of 2010 (a decrease of 4.1% in local currency). This decline reflected a U.S. Contract operations sales decline of 3.6%, which was mostly offset by an International Contract operations sales increase of 8.7% in U.S. dollars (a sales decrease of 5.2% in local currencies), the company reported.
Duncan added, "Based on our performance in the first half of 2010, we are confident in our ability to continue executing on our five-year plan as we transform into an office effectiveness and efficiency solutions company. Our disciplined cash flow management provides us with the strong financial foundation to invest in and grow the business. While the economy appears to be recovering more slowly than we had previously expected, we are well positioned to achieve our 2010 and long-term financial objectives."
Based on these assumptions, OfficeMax said it anticipates that for the third quarter, total company sales will be slightly lower than the prior year's third quarter, including the favorable impact of foreign currency translation, and adjusted operating income margin rate will be lower than the prior year's third quarter. For the full year 2010, OfficeMax anticipates that total company sales will be flat to slightly lower than 2009, including the favorable impact of foreign currency translation, and adjusted operating income margin rate will be higher than 2009, but the margin improvement will be significantly less than the 140 basis point year-over-year margin improvement in the first half of 2010.