OfficeMax profit edges up in Q3 amid declining sales
Naperville, Ill. — OfficeMax reported Thursday that net income for the quarter ended Sept. 24 rose to $21.5 million, compared with $20 million in the year-ago period.
Sales dipped 2.1% to $1.77 billion from $1.81 billion, barely meeting Wall Street’s expected $1.807 billion. Same-store sales dropped 4.3%.
“We remain focused on driving operational efficiencies as we position the company for long-term growth," said Ravi Saligram, president and CEO, OfficeMax.
In the retail segment, sales decreased 4.8% to $891.5 million, reflecting a same-store sales decrease of 4.3%. A decline in same-store sales in the United States was partially offset by stronger same-store sales in Mexico.
During the quarter, OfficeMax opened four stores in Mexico and closed four in the United States. For the rest of the fiscal year, the company said it plans to further reduce its store count with about 20 store closures in the United States and two in Mexico. OfficeMax said it will open seven stores in Mexico yet this year.
Sales, profits accelerate at O’Reilly Automotive
SPRINGFIELD, Mo.— A down economy means people are less likely to buy new cars, which means they will need to take care of the ones they do have, and that’s good news for companies like O’Reilly Automotive, which reported sales and earnings growth for the third quarter.
O’Reilly Automotive announced that sales for the third quarter ended Sept. 30, increased 8% to $1.54 billion from $1.43billion for the same period one year ago.Net income for the third quarter increased $32 million, or 27%, to $148 millionfrom $117 million (or 8.2% of sales) for the same period one year ago. Diluted earnings per common share forthe third quarter increased 34% to $1.10 versus 82 cents for the same period one year ago.
Commenting on the company’s quarterly results, Greg Henslee, co-president and CEO stated, “We are pleased toreport another successful quarter. Our results are highlighted by a solid 4.8% comparable-store sales increase on top ofan extremely strong comparable-store sales increase of 11.1% last year, a 50 basis point improvement in gross marginand a record-breaking 15.7% operating margin. The continued trend of solid comparable-store sales increases is thedirect result of the hard work and commitment to unsurpassed customer service from each of our dedicated team members. Our relentless focus on expense control, at all levels, led to the 130 basis point improvement in adjustedoperating margin. I am very pleased with the performance of team O’Reilly and would like to thank all of our teammembers for their commitment to exceeding customer expectations.”
During the quarter, the company opened 50 new stores, bringing its store count to 3,707 in 39 states.
For the fourth quarter, O’Reilly Automotive is expecting comparable-store sales to increase 3% to 5% and diluted earnings per share to be between 80 cents to 84 cents.
OfficeMax delivers a profit despite weak economy
NAPERVILLE, Ill. — OfficeMax’s sales were down for the third quarter, but the company managed to deliver higher net income growth during a period of executive transitions and a tough economy.
OfficeMax announced that total sales were $1.8 billion in the third quarter of 2011, a decrease of 2.1% from the third quarter of 2010. For the third quarter of 2011, OfficeMax reported net income of $21.5 million, or 25 cents per diluted share, compared with $20 million, or 23 cents per diluted share, in the third quarter of 2010.
OfficeMax’s retail segment reported a sales decrease of 4.8% to $891.5 million in the third quarter of 2011 compared with the third quarter of 2010, reflecting a same-store sales decrease of 4.3%. A decline in same-store sales in the U.S. was partially offset by stronger same-store sales in Mexico, the company said. Retail segment income was $28.5 million, or 3.2% of sales, in the third quarter of 2011 compared to $32.4 million, or 3.5% of sales, in the third quarter of 2010.
OfficeMax ended the third quarter of 2011 with a total of 983 retail stores, consisting of 900 stores in the United States and 83 stores stores in Mexico. During the third quarter of 2011, OfficeMax opened four retail stores in Mexico and closed four retail stores in the United States.
At OfficeMax’s contract segment, sales increased 0.7% to $883.3 million from the prior year period. This increase reflected a U.S. contract operations sales decrease of 2.4% and an international contract operations sales increase of 7.7% in U.S. dollars (a decrease of 3% on a local currency basis).
"In the quarter, we maintained our profit margins in a tough economic climate and a soft back-to-school season," said Ravi Saligram, president and CEO of OfficeMax. "With our new senior management team largely in place, we remain focused on driving operational efficiencies as we position the company for long-term growth."
For the fourth quarter, OfficeMax said it is expecting an increase in total sales over 2010. For the full year 2011, OfficeMax said it expects that total company sales will be slightly lower than the prior year. Additionally, OfficeMax anticipates that for both the fourth quarter and full year 2011, the adjusted operating income margin rate will be in line with the 1.7% rate for the first nine months of 2011.
Bruce Besanko, EVP, CFO and chief administrative officer of OfficeMax, said, "Sales trends remain soft, however, the domestic total company sales percentage decline in October, on a year-over-year basis, was slightly less than the percentage decline we experienced in the third quarter. We remain diligent on cost reductions and expense control as we manage through challenging sales results."