OfficeMax Reports Smaller Decline In Q4 Sales

 

The string of double-digit sales declines seen by OfficeMax through the first three quarters of 2009 slowed in the fourth quarter as the office superstore reported a small drop in sales for the fourth quarter.

According to the company, sales for the quarter ended December 26, 2009, were 1.8 billion, a decline of 3.9% when compared to the same quarter the previous year. Total year sales were $7.2 billion, down -12.8% from the previous fiscal year.

“We are pleased with our strong balance sheet and liquidity position as well as our improving performance throughout 2009 in what has remained a tough environment for our business,” said Sam Duncan, chairman/CEO of OfficeMax. “Notably for the fourth quarter, the year-over-year sales decrease moderated, which was consistent with the trend we saw each quarter during the year, and we expanded gross margin.  We believe our company is well positioned to grow sales and operating margin as the economy improves.”

OfficeMax Retail segment sales decreased 7.2% to $862.7 million in the fourth quarter of 2009 compared to the fourth quarter of 2008, reflecting a same-store sales decrease of 6.7% and fewer stores.  Retail same-store sales for the fourth quarter of 2009 declined across all major product categories primarily due to weaker small business and consumer spending. 

Retail segment operating loss was $26.5 million in the fourth quarter of 2009.  Retail segment adjusted operating loss was $6.8 million, or -0.8% of sales, in the fourth quarter of 2009 compared to breakeven results in the fourth quarter of 2008. 

OfficeMax ended 2009 with a total of 1,010 retail stores, consisting of 933 retail stores in the U.S. and 77 retail stores in Mexico.  During the fourth quarter of 2009, OfficeMax opened one retail store in the U.S., and closed one store in Mexico.  During 2009, OfficeMax opened 12 retail stores in the U.S., and closed 18 stores in the U.S. and 6 in Mexico.

Duncan noted that the company expects to continue facing challenging economic conditions, such as U.S. unemployment trends, over the near-term with these trends beginning to work in the company’s favor toward the latter part of the year. Additionally, the company plans to invest in initiatives to drive growth, and the successful execution of these initiatives is expected to benefit operations and financial results as the year progresses.  Based on these assumptions, OfficeMax anticipates that for the full year 2010, total sales, including the impact of foreign currency translation, and adjusted operating income margin will be slightly higher than they were in 2009.

“As we enter 2010 with a strong balance sheet and a highly disciplined corporate culture, we are encouraged by the momentum that we have built in 2009 and we are confident that our team is prepared to execute well this year and beyond,” said Duncan. “OfficeMax has been establishing itself as a key partner for both business and retail customers and we are well positioned as the economy begins to recover. We expect to continue progressing on our productivity initiatives in 2010 and, importantly, we will be increasing our focus toward driving long-term growth and differentiating our company in the marketplace.”