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OfficeMax profit drops in Q4, plans store closures

BY Katherine Boccaccio

Naperville, Ill. — OfficeMax Inc. reported Thursday that net income for the quarter ended Dec. 31 dropped to $2.9 million, from $32.8 million a year earlier.

Sales edged up 3.9% to $1.8 billion in the quarter, but dipped 0.4% to $7.1 billion for the full year. Profit for the year was $32.8 million.

"We closed out a challenging 2011 by continuing to streamline our operations and strengthen the core business," said Ravi Saligram, president and CEO of OfficeMax. "We are making progress in executing the strategic plan we announced in November."

Retail segment sales increased 5.7% to $901 million in the fourth quarter, reflecting a same-store sales increase of 0.2%.

For the upcoming year, OfficeMax said it plans a net reduction in retail store count with up to 35 store closures and one to two store openings in the United States, as well as eight to nine store openings and one to two store closures in Mexico.

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Target reports Q4 profit drop of 5.2%, raises full year outlook

BY Katherine Boccaccio

Minneapolis — Target Corp. reported Thursday that profit for the quarter ended Jan. 28 slid 5.2% to $981 million amid heavy holiday promotional activity. But the chain is still forecasting a full-year profit outlook that beats analysts’ expectations.

Revenue for the fourth quarter increased 3.3% to $20.94 billion, missing Wall Street’s expected $21.23 billion in revenue. Same-store sales rose 2.2%, below Target expectations.

On a conference call with analysts, Target CEO Gregg W. Steinhafel said that the pace of sales after the holiday period has returned to stronger, pre-holiday levels, and sales momentum has built, particularly in discretionary categories.

The chief executive told analysts Target expects to complete some 230 remodel projects in 2012 as it continues to add perishable food along with a deeper assortment of dry, dairy and frozen items and enhanced store layout and presentation in areas including apparel, home, beauty, shoes and baby.

In addition, the chain will open 20 to 25 stores in 2012, adding 15 to 20 locations, net of relocations and closures. The total includes five stores under the chain’s new urban banner, CityTarget, which will debut in July.

“While these slightly smaller urban stores will incorporate the Target brand and store experience, we’ll tailor our assortment to meet the needs of the trade area and adapt our operating routines to work in smaller spaces with higher traffic,” Steinhafel said on the call.

Looking further ahead, Steinhafel said the chain will take time to learn from the initial CityTarget locations before it determines the appropriate pace of investment and number of additional CityTarget stores it will open.

“In addition, we’ll apply what we learn in these pilot stores across the chain in our larger U.S. stores and in Canada,” he said.

Target remains on track with strategies to ramp up traffic and sales, including teaming with specialty shops to offer limited-edition merchandise and partnering with Apple to test displays of its products in 25 Target stores.

For the full year, we grew our comparable store sales by 3%, our best annual performance since 2007. This growth reflects investments made in our remodel program and the 5% Rewards loyalty program, both of which continue to drive incremental traffic and sales.

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Kohl’s Q4 profit falls 7.9% on sales decline

BY Katherine Boccaccio

Menomonee Falls, Wis. — Kohl’s Corp. reported Thursday that profit for the fourth quarter dropped 7.9% to $455 million, from $494 million a year earlier, as the retailer experienced unexpected revenue declines during the holiday selling period.

Kohl’s reported that total sales dipped 0.3% to $6.02 billion in the period, and same-store sales dropped 2.1%. It was the chain’s first revenue decline in three years

Yet, said chairman and CEO Kevin Mansell on Thursday, the company was “able to navigate a difficult holiday sales season through strong expense and inventory management."

For the year, Kohl’s reported net sales were $18.8 billion, an increase of 2.2%. Same-store sales increased 0.5%.

“With the commitment of each of our 140,000 associates, we were able to navigate a difficult holiday sales season through strong expense and inventory management,” Mansell said in a statement. “We achieved a major milestone in 2011 with our e-commerce business reporting $1 billion in revenues.”

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