This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Tough Second Half Awaits OfficeMax

Updated from 9:18 a.m. EDT

OfficeMax (OMX) narrowed its quarterly loss Tuesday, helped by strong comparable-store sales that held up despite an extensive store remodeling program.

More difficult same-store comparisons loom in the second half and the company, which is in the midst of being acquired by forest products giant Boise Cascade (BCC), will need the economy to cooperate if it wants the performance to continue.

In the quarter ended July 26, the Cleveland-based retail chain lost $26.7 million, or 21 cents a share, compared to last year's loss of $33.4 million, or 27 cents a share. The results don't reflect a normalized tax benefit due to the required accounting treatment of deferred tax assets and related valuation allowance.

Assuming a 40% tax rate and including an after-tax impact of a penny a share, the company said it would have lost $16.2 million, or 13 cents a share. On that basis, analysts were expecting a loss of 12 cents a share. The results compare to a loss of $20.2 million, or 16 cents a share, in the year-ago quarter.

Total sales rose to $1.05 billion from $1.01 billion. Strong categories included electronics, ink and toner, shredders, office labels and digital imaging. The strength should continue for the rest of the year, OfficeMax predicted.

Consolidated same-store sales increased 4% and domestic same-store sales rose 5%, helped by both higher traffic and a higher average purchase. Also, the amount of out-of-stock merchandise fell from the year earlier, the company said. Last year, comparable-store sales rose 3% in the second quarter.

Analysts praised the domestic results. "Not many retailers have posted 5% comps in the second quarter," said analyst Todd Kuhrt of Midwest Research-Maxus.

But comparable-store sales in the company's Mexico segment fell 20% because of devaluation in the Mexican peso against the U.S. dollar. Sales of certain larger items, such as computers, also fell, OfficeMax said.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs